Relating to the company's future performance. And our intended to qualify for the Safe Harbor from liability as established by the U. S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance. And are subject to certain risks and uncertainties. Assumptions and other factors. Some of these risks are beyond the company's control. And could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risks factors that could affect Yatsen's business and financial results. Is included in certain filings of the company's with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward looking information except as required by law. During today's call, management will also discuss certain non GAAP financial measures for comparison purposes only. Please see the earnings release issued earlier today for a definition of non GAAP financial measures and a reconciliation of GAAP to non GAAP financial results. Joining us today on the call from Yatsen's senior management are Mr. Zifeng Huang, our Founder, Chairman and CEO and Mr. Zhuho Yang, our CFO and Director. Management will begin with prepared remarks. And the call will conclude with a Q and A session.

As a reminder, [indiscernible] conference is being recorded. In addition, a webcast replay of this conference call will be available on Yatsen's Investor Relations website at ir.yatsenglobal.com. I will now turn the call over to Mr. Zhu Zhou Huang, Please go ahead, sir.

Thank you, Irene and thank you everyone. For participating in Yatsen's first quarter twenty twenty five earnings conference call today. I will begin with a macro overview and our key financial results. Followed by insights into our key strategy initiatives. And operational highlights. [indiscernible] saw a modest growth in the first quarter of twenty twenty five According to the China National Bureau of Statistics, beauty retail sales rose 3.2% year over year slightly trailing the 4.6% year over year growth in total retail sales of consumer goods. Online Beauty sales reflected a similar trend Combined beauty sales on Tmall and Douyin recorded low double digit year over year growth. The Women's Day shopping festival delivering moderate performance. In terms of channels, OYIN outperformed Tmall in both skincare and the color cosmetics [indiscernible] Despite a soft market environment, we delivered results in line with our guidance. Total net revenues increased by 7.8% year over year. Remarkably, our net revenues from skincare brands rose by 47.7% year over year driven by a 58% year over year increase for our clinical and the premium skincare brands [indiscernible] Doctor. Wu, and Yiplong. On the profitability front, for the first quarter of twenty twenty five, our overall gross margin increased to 79.1 from 77.7% for the prior year period.

Driven by the greater contribution from higher margin products. We also reduced our net loss margin by 15.5 percentage points to 0.7% from 15.1% in the prior year.

Through more strategic marketing spending, and the streamlined general and administrative expenses. Notably, we achieved a non GAAP net income of RMB 7,100,000.0 representing a significant turnaround from the non GAAP net loss. Of RMB 83,800,000.0 for the prior year period. Our solid performance for the first quarter marked another milestone in our strategic transformation which particular progress on two key fronts. Accelerating the growth for our skincare brands and optimizing our cost structure to prepare us for profitable growth. Now let me walk you through the key performance highlights. This quarter that reflect the accomplishments we have achieved Starting with skincare, our portfolio continued to show strong momentum primarily driven by Glynic and Doctor. Wu. Our skincare brands delivered year over year revenue growth of 47.7 over percent, Glynyk saw another quarter of steady growth. It's number one becoming C Serum was the best selling product in the premium vitamin serum category in often these live streaming room. While the secret Deactivolive Active Cream ranked among the top six anti aging creams on Tmall in terms of retail sales value in the first quarter. MicroMap series also contributed to the brand's strong performance. In May, we hosted an offline event in Vinland, China to officially launch the upgraded MicroMask.

Which recently obtained the special cosmetic registration certificate for whitening products At the event we also announced renewed access Zhu Ling Chen as the brand ambassador for the Masked series. We aim to further elaborate [indiscernible] and recognition through continued product innovation and targeted marketing efforts Doctor. Wu also delivered robust revenue growth in the third quarter supported by a broader product portfolio and a more balanced channel mix We collaborated with a wide range of celebrities and KOLs to promote diverse products including the purifying renewal essence corner, the Sun Care UV protect whitening lotion, and the newly launched targeted acne cleaning service. This approach help us drive revenue growth on both Tmall and the Boise. In addition to strong sales performance, we remain committed to scientific research and collaboration. In March, we launched the third profitable acne research fund project. Led by 14 renowned dermatologists from top institutions Since its inception in 2023, the project has reached over 20,000 doctors and received more than three fifty clinical research proposals. We look forward to the insights this fund will bring to the field of anti acne treatment. While continuing to invest in product development and the brand building to boost revenue growth we also made meaningful progress in improving profitability.

Selling and marketing expenses as a percentage of total net revenues narrowed to 56.4% from 59.7% for the prior year period The improvement was primarily due to more strategic marketing spending particularly offset by higher traffic expenses as a result of growing revenue contribution from the Douyin channel. More notably, general and administrative expenses as a percentage of total net revenues were 7.8% down by 10.3 percentage points from 18.1% a year ago. This improvement reflected our distinct cost management and provide a solid foundation for our long term growth. Lastly, I would like to highlight a few milestones at the corporate level. Our global R and D center in Shanghai which we inaugurated last year was officially a credit by the China National Accreditation Service for conformity assessment placing it among the top tier of global testing in institutions. This accreditation alongside the CNAs recognition with [indiscernible] by our R and D center in Guangzhou back in 2022 demonstrates our continued commitment to excellence in beauty research, Although in April, we were invited by the China show of Bloomberg and engaged in an in-depth interview on the topic of the future of beauty driven by technology. This opportunity reinforce our strategic focus on R and D as a core competitive advantage.

Before passing the call to Dong Hao, I would like to provide an update that our Board of Directors has approved a new share repurchase program under which we may repurchase up to $30,000,000 worth of our ordinary shares over the next twenty four months. Commencing on May 15, 2025. This further demonstrates our confidence in Yatsen's future potential. To conclude, while market conditions remain complex, we are encouraged by the progress we have made in executing our strategic transformation we remain focused on delivering innovative and the [indiscernible] [indiscernible] Products building strong brand equity and driving operational excellence. All of which we believe will position us well for long term sustainable growth. With that, I will now turn the call over to our CFO, Zhong Hao Yang, to discuss our financial performance. Thank you, everyone. Thank you, David, and hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are in RMB amounts. And all percentage changes referred to year over year changes unless otherwise noted.

Total net revenues for the first quarter of twenty twenty five increased by 7.8% to $833,500,000 from 773,400,000.0 for the prior year period. The increase was primarily due to a 47.7% year over year increase in net revenues from skincare brands partially offset by a 9.9% year over year decrease in net revenues from color cosmetics brands. Gross profit for the first quarter of twenty twenty five increased by 9.7% to RMB659.6 million from $900,000 for the prior year period. Gross margin for the first quarter of twenty twenty five increased to 79.1% from 77.7% for the prior year period. The increase was primarily driven by an increase in sales of higher gross margin products. Total operating expenses the first quarter of twenty twenty five decreased by 8.6% to 693,200,000.0 from RMB758.7 million for the prior year period. As a percentage of total net revenues, total operating expenses the first quarter of twenty twenty five were 83.2% as compared with 98.1% for the prior year period. Fulfillment expenses for the first quarter of twenty twenty five were 51,800,000.0 as compared with $51,400,000 for the prior year period. As a percentage of total net revenues, fulfillment expenses the first quarter of twenty twenty five decreased to 6.2% from 6.7% for the prior year period.

The decrease was primarily due to further improvements in logistics [indiscernible] Selling and marketing expenses for the first quarter of twenty twenty five were 5 and 53,800,000.0 as compared with 539,200,000.0 for the prior year period. As a percentage of total net revenues, selling and marketing expenses for the first quarter of twenty twenty five decreased to 66.4%. From 69.7% for the prior year period. The decrease was primarily due to the company's more strategic marketing spending combined with the selective closure of offline stores. General and administrative expenses for the first quarter of twenty twenty five were 64,900,000.0 as compared with $140,100,000 for the prior year period. As a percentage of total net revenues, general and administrative expenses for the first quarter of twenty twenty five decreased to 7.8% from 18.1%. For the prior year period. The decrease was primarily attributable to lower share based compensation expenses as a result of using the graded vesting period method over the vesting term of the company's awards and lower payroll expenses resulting from a reduction in general and administrative headcount. The surge and development expenses for the first quarter of twenty twenty five were 22 points $6,000,000 as compared with $27,900,000 for the prior year period.

As a percentage of total net revenues, research and development expenses for the first quarter of twenty twenty five decreased to 2.7% from 3.6% for the prior year period. The decrease was primarily due to lower lease expenses resulting from more favorable terms under a lease agreement renegotiated during the first quarter of twenty twenty five. And lower share based compensation expenses. Loss from operations for the first quarter of twenty twenty five was $34,100,000 as compared with 157,700,000.0 for the prior year period. Operating loss margin was 4.1% as compared with 20.4% for the prior year period. Non GAAP loss from operations for the first quarter of twenty twenty five was 14,900,000.0 as compared with $107,000,000 for the prior year period. Non GAAP operating loss margin was 1.8%. As compared with 13.8% for the prior year period. Net loss for the first quarter of twenty twenty five was $5,600,000 as compared with 124,900,000.0 for the prior period. Net loss margin was 0.7% as compared with 16.1% for the prior year period. Net loss attributable to Yatsen's ordinary shareholders per diluted ADS for the first quarter of twenty twenty five was as compared with for the prior year period. Non GAAP net income for the first quarter of twenty twenty five was RMB7.1 million as compared with non GAAP net loss of 83,800,000.0 for the prior year period.

Non GAAP net income margin was 0.9%. As compared with non GAAP net loss margin of 10.8%. For the prior year period. Non GAAP net income attributable to Yatsen's ordinary shareholders per diluted ADS for the first quarter of twenty twenty five was zero point as compared with non GAAP net loss attributable to Yatsen's ordinary shareholders per diluted ADS of zero point for the prior year period. As of 03/31/2025, we had cash and short term investments up 1,000,000,000 as compared with RMB1.36 billion as of 12/31/2024. Net cash generated from operating activities for the first quarter of twenty twenty five was 23,800,000.0 as compared with net cash used operating activities of 121,800,000.0 for the prior year period. Looking at our business outlook for the second quarter of twenty twenty five, we expect our total net revenues to be between $810,400,000 and 800,000,000 representing a year over year increase of approximately 2% to 12%. These forecasts reflect our current and preliminary views on the market and operational conditions. Which are subject to change. With that, I would now like to open the call to Q and A. Operator, Thank you. We will now begin the question and answer session.

For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. The first question today comes from Maggie Huang with CICC. Please go ahead. Well, thanks for taking my question. This is Maggie Huang from CICC.

And firstly, congratulations on achieving non GAAP net income in this quarter. And I have two questions. My first question is that how do we plan to promote the new products of Perfect Diary Organic especially the foundation products of Perfect Diary and the anti aging products of organic And my second question is about our performance of this June 18 shopping festival up to now. Is that in line with our expectation? That's my two questions. Thank you.

Thank you, Maggie, for the question. So for your first question, regarding the Purple Diary and Glenix new products, So we think product innovation and efficacy are the most important. In driving consumers repeat purchase and then So basically right now all our product pipeline are really with strong product innovation and are backed by very strong R and D capability deep consumer insights, and very strong consumer communication. So right now for Perfect Diary and Atlantic, so far we have seen very good initial achievement results from the consumer feedback in terms of the facial makeup products. And the anti aging products. Which is foundation and also our VA serum. So once we receive more positive feedback from the consumers, and fine tune our consumer communication, that we can begin to enlarge our channel distribution and also further build into further build product into the silver product.

All right. Let me take your second question. Well, it's still a bit too early for us to predict our overall performance for the June eighteen festival But so far so good. I think the sales so far is pretty much in line with our with our expectations. Thank you.

It's very clear. Thank you very much. And I have no more questions.

Thank you again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly. Our company information for IR in both China and The U. S. Can be found in today's press release. Thank you and have a great day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.