Did Yatsen's margins expand or contract in Q2 2025, and what factors (e.g., cost of goods, SG&A, rent expenses) influenced this?

Margin direction: The August 14 press release only confirms that Yatsen Holding Ltd. will publish its unaudited Q2‑2025 results on August 21; it does not disclose the actual margin figures for the quarter. Consequently, we cannot state with certainty whether gross or operating margins expanded or contracted in Q2 2025 based solely on the information provided.

Likely drivers: Historically, Yatsen’s margin performance has been sensitive to three cost levers:

1. Cost of goods sold (COGS): A higher proportion of retail‑service spend on consumables (e.g., cosmetics, skin‑care kits) can compress gross margin, while any supply‑chain efficiencies or lower input‑price inflation would support expansion.
   
2. SG&A expenses: The company has been pursuing a “lean‑store” model that trims marketing and head‑count costs. If Q2 2025 continued that trajectory, SG&A compression would boost operating margin.
   
3. Rent and lease costs: Yatsen’s rapid store roll‑out in high‑traffic malls often drives rent‑expense volatility. A slowdown in new‑store openings or renegotiated lease terms would lower rent expense, favoring margin expansion; conversely, a surge in lease‑rate hikes would weigh on profitability.

Trading implications: Until the August 21 filing, the market will price Yatsen on the range of possible margin outcomes. Analysts should:

• Watch the upcoming earnings call for explicit gross‑margin and operating‑margin guidance, especially any commentary on COGS trends, SG&A rationalisation, or rent‑expense adjustments.
  
• Consider a short‑term position (e.g., a 1‑2 month straddle or directional bet) if the consensus view is that margins are likely to contract—perhaps due to rising consumable costs or aggressive store expansion—because a miss could trigger a sell‑off.
  
• If the company signals margin expansion through cost‑control measures, a long‑biased play (e.g., buying on dips or taking a modest call) may capture upside as the market re‑prices the improved profitability outlook.

In short, the press release does not confirm margin direction; the key will be the August 21 results, where the disclosed COGS, SG&A, and rent‑expense trends will determine whether Yatsen’s margins are expanding or contracting and shape the next short‑term trade.