Nykaa Q4 Results: Profit Slumps 49% On Dull Demand, Higher Expenses
Margin narrowed to 4% from 7.3% during the quarter on account of inflationary pressures
Online beauty and fashion retailer Nykaa’s fourth-quarter profit fell by half as expenses rose and demand slowed for its personal care and fashion products.
Net profit attributable to the shareholders of FSN E-Commerce Ventures Ltd., the parent of Nykaa, dropped 49% year-on-year to Rs 8.56 crore in the quarter ended March, according to its filing with exchanges.
Key Highlights (YoY)
Revenue rose 31% to Rs 973.3 crore. Sequentially, it fell 11%.
Operating profit fell 28.7% to Rs 38.5 crore.
Expenses rose 35% to Rs 978.6 crore.
Gross merchandise value for beauty and personal care grew 49% to Rs 4,998.7 crore. The pace of growth, however, slowed from 54% in FY20, the pre-Covid year.
For fashion, the gross merchandise value grew 168% to Rs 1,752 crore. GMV grew 568% in FY20 and 250% in FY21.
Marketing and advertisement expense stood 12.7% of the revenue in FY22 versus 6.9% in FY21. Digital marketing during the year witnessed inflationary pressure due to highly competitive environment, it said.
Nykaa reported a 12% sequential decline and 2% year-on-year fal in the average order value for its beauty and personal care segment in the fourth quarter. The fashion segment, too, saw total orders fall 4% over the previous quarter, while the average order value rose 1%. This segment, however, saw a 19% year-on-year growth in the average order value.
"The year has witnessed a challenging macroeconomic environment, pronounced for discretionary categories like beauty, personal care and fashion," Falguni Nayar, executive chairperson, managing director and chief executive officer of the company, was quoted as saying in a statement. "Despite market slowdown, we acquired over 6 million new customers across beauty and fashion, and witnessed superior customer retention, with improved metrics across the funnel--from visits to conversions."
Total number of visits fell 8% for beauty and personal care, and 2% for the fashion segment over the previous quarter. Its total store count stood at 105 as of March.