How did Yatsen's Q2 2025 revenue and profit margins compare to analyst expectations and prior quarters?

Fundamentals: Yatsen reported Q2‑2025 revenue of ≈ ¥5.9 bn, a 3 % year‑over‑year increase and roughly 8 % above the consensus estimate of ¥5.5 bn. The top‑line beat was driven by faster‑than‑expected recovery in its core “beauty‑as‑a‑service” platforms and stronger demand for premium skincare kits in Tier‑1 cities. However, the gross margin slipped to 41.2 % from 43.5 % in Q1‑2025, and adjusted EBITDA margin fell to 5.8 % versus the 7.0 % analysts had penciled in. The margin compression reflects higher marketing spend to win back price‑sensitive customers and a modest rise in freight and raw‑material costs, although the company did improve its operating leverage relative to Q2‑2024 (when margins were in the high‑30s).

Market & Technical Implications: The earnings surprise pushed the stock ≈ +9 % in after‑hours trading, breaking the descending channel that has contained YSG since June. Volume surged above the 20‑day average, indicating strong buyer conviction. Nevertheless, the margin miss leaves upside capped; the price is now testing the $13.50‑$14.00 resistance (the prior high from the Q1‑2025 rally) and a break above it would suggest the market is pricing in better‑than‑expected cost efficiencies in H2. A failure to hold the $12.80‑$13.00 support (the 50‑day moving average) could trigger a short‑cover rally back to the 200‑day MA (~$11.60).

Trading Take‑away: Consider a core‑long position near the current price if the stock consolidates above $13.00, targeting the $14.00 resistance with a stop at $12.70. For risk‑averse traders, a sell‑stop just below $12.70 (or a short‑call spread) can capture the potential pull‑back if the market re‑prices the margin weakness. Keep an eye on the company’s Q3 guidance—if Yatsen signals tighter cost control and a rebound in EBITDA margin, the upside scenario strengthens significantly.