The consolidated net profit of online beauty retailer Nykaa more than halved in the fourth quarter of March 2022 (Q4FY22) period on the back of increased spending and slowing demand from consumers.
The firm’s quarterly profit after tax dropped 58% at Rs 7.6 crore as compared to Rs 17.9 crore in the quarter ended March 2021. Sequentially, the profit was lower by 74% from Rs 29 crore in the October to December period. The net profit (including non-controlling interests) stood at Rs 8.6 crore in Q4FY22, down by 49.2% from Rs 16.9 crore in the same quarter last year.
However, the Falguni Nayar-led firm's consolidated revenue from its operations rose by 31.4% at Rs 973.3 crore in Q4FY22 from Rs 740.5 crore in the same period last year. Meanwhile, revenue declined compared to Rs 1,098.4 crore in the preceding quarter ending December 2021.
Nykaa, run by FSN E-Commerce Ventures Limited, reported its financial numbers six months after it made a stellar debut on the Indian stock exchanges in November last year.
The earnings of the beauty and fashion e-tailer were impacted due to a steep surge in expenses on marketing and acquisitions amidst dull demand for its personal care and fashion products.
Its expenses in Q4FY22 rose over 35% to Rs 978.6 crore as compared to Rs 724.5 crore in the same period a year ago.
For the full year ending March FY22, Nykaa’s profit was also lower by one-third at Rs 41 crore, down from Rs 61.5 crore in FY21.
“The year has witnessed a challenging macroeconomic environment, pronounced for discretionary categories like beauty, personal care and fashion. Despite market slowdown, our unique growth story continues, showing the resilience of our business model and long term sustainability by balancing strong revenue growth, responsible unit economics and profitability,” said Falguni Nayar, Executive Chairperson, MD and CEO of the company.
The online beauty ecommerce firm pointed out that the performance comes amid macro-economic challenges such as rising inflation, reduction in discretionary spends by consumers, and uncertainty around Covid-19.
Founded by Nayar in 2012, Nykaa offers over 4,000 brands and over 3.1 million product SKUs through its website and mobile applications. It has been expanding its fashion business with several acquisitions over the past two years.
In April alone, it announced three strategic investments to boost its beauty and clothing portfolios.
Last year, it also acquired over six million new customers across beauty and fashion segments.
Shares of Nykaa closed Friday’s trade at Rs 1351.80 apiece, weaker by 0.9% from its previous close on the BSE.
Since its public listing, its shareholders have lost around 47% slide in valuation from the peak of Rs 2,574 per share.
Nykaa counts TPG Growth, Lighthouse, Steadview Capital and Fidelity among its investors.
