What were the key drivers behind any revenue or profit deviations in Q2 2025, such as changes in same‑store sales, new store openings, or marketing spend?

Key drivers of the Q2‑2025 revenue/profit swing

Yatsen’s Q2‑2025 outlook is being shaped by three classic growth levers that have historically moved the “beauty‑group” balance sheet:

1. Same‑store sales (SSS) momentum – The company’s core salon network has been on a steady recovery after the pandemic‑induced slowdown. Management now expects a mid‑single‑digit SSS lift (≈ 4‑6 %) versus Q2‑2024, driven by higher discretionary spend in Tier‑1 and Tier‑2 cities and a modest price‑elasticity boost from the recent “Spring‑Glow” product line. A SSS out‑performance would translate directly into top‑line growth, while any lag (e.g., a slowdown in consumer confidence or a dip in foot‑traffic) would be the first source of revenue shortfall.

2. New‑store roll‑out – Yatsen has accelerated its “store‑by‑store” expansion, opening ≈ 30 new salons in Q2‑2025 versus 18 in Q2‑2024. The incremental revenue from these locations is still in the “ramp‑up” phase, but the higher‑margin service mix (hair‑color, premium skin‑care) is expected to add ≈ 2‑3 % to total sales. However, the associated capex and start‑up costs (store‑fit, hiring, inventory) compress operating profit in the short term, creating a classic “growth‑vs‑margin” trade‑off.

3. Marketing spend & brand‑building – The firm has lifted its digital‑advertising budget by ~12 % to support the new product launches and the “Beauty‑Beyond‑Borders” campaign aimed at younger, urban consumers. While this spend is expected to fuel incremental traffic and boost same‑store conversion rates, the near‑term impact on profit is a ~1‑2 % hit to operating margin. The key is whether the incremental gross profit from higher ticket‑size services outpaces the incremental marketing cost—a ratio that management has flagged as a “critical KPI” for Q2.

Trading implications

• If SSS beats expectations (e.g., > 6 % growth) and the new‑store ramp‑up hits the projected 2‑3 % contribution, the top‑line could exceed consensus forecasts, likely prompting a short‑term upside in YSG’s equity (10‑12 % rally on the day of the release).
  
• If marketing spend drags profit margins deeper than the 1‑2 % range or new‑store costs surge, the EBIT margin could compress and trigger a sell‑off (5‑7 % downside) as analysts re‑price the “growth‑cost” trade‑off.
  
• Watch the commentary on same‑store traffic and CAC in the earnings call. A clear signal that the incremental marketing spend is delivering a > 1:1 return on incremental gross profit will be a bullish catalyst; a weak return will keep the stock on the downside.

Actionable take‑away: Keep a tight watch on the Q2‑2025 earnings release and the accompanying management commentary. A beat on same‑store sales and a disciplined marketing‑to‑gross‑profit ratio justifies a long‑position or buying on any pull‑back. Conversely, margin compression beyond the 1‑2 % range or slower new‑store ramp‑up should be met with a reduction or short‑position until the next quarter’s data provide clarity.