Nykaa Reports Q1 FY24 Results: Operating Revenue Grows 24%, Profits Impacted by Expenses

• ByStartupStory     |    August 12, 2023

Beauty and fashion retailer Nykaa announced its financial results for the first quarter of FY24, revealing a 24% increase in operating revenue compared to the same period last year. The company reported operating revenue of Rs 1,421 crore, up from Rs 1,148 crore. However, this growth was counterbalanced by a 23% rise in total expenses, reaching Rs 1,419 crore, which impacted the company’s bottom line.

Nykaa’s profit attributable to equity shareholders saw a decline of 27%, totaling Rs 3.3 crore in Q1 FY24, compared to Rs 4.5 crore in the previous year. The slowdown in growth within the fashion segment was a contributing factor to the decrease. Despite this, the company’s profit after tax, including non-controlling interests, demonstrated an 8% increase to Rs 5.4 crore.

The company’s gross merchandise value (GMV) within the beauty and personal care (BPC) business, its largest revenue segment, exhibited a robust growth of 24% year-on-year. This growth was observed across Nykaa’s e-commerce, physical retail, and consumer brands portfolios. Notably, 10.3 million annual transaction customers contributed to this traction, with nearly 80% of GMV coming from existing consumers.

Nykaa highlighted the significance of its expanding share of existing customers, emphasizing its commitment to sustainable customer acquisitions and positive shopping experiences. The company’s offline retail presence also expanded, with a 43% growth compared to the previous year, resulting in a total of 152 stores as of June 30, 2023.

However, Nykaa’s fashion segment, its second-largest revenue contributor, faced challenges in recent quarters due to heightened competition from rivals like Myntra, Purplle, and TataCliq. Despite this, the company reported a 12% rise in GMV for the April-June period of FY24, partly attributed to the success of the Hot Pink Sale held in July.

Nykaa’s house of brands, including acquisitions like Dot&Key and joint ventures such as Kay Beauty, contributed significantly to the BPC segment’s growth. The GMV for this portfolio registered a remarkable 40% rise. Dot&Key, in particular, witnessed impressive growth, achieving over 5X GMV growth since its acquisition. In the fashion vertical, owned brands like Twenty Dresses and Nykd by Nykaa saw a 30% rise in GMV in the last quarter.

Nykaa’s strategic focus on its eB2B vertical, SuperStore by Nykaa, yielded positive results, expanding to include 1,19,564 transacting retailers across 699 cities, with 188 brands listed by June 30, 2023.

Nykaa’s shares closed 0.6% higher on Friday, ending at Rs 146.55 apiece. The company’s leadership experienced changes, with the exit of four key senior executives, including Chief Marketing Officer Shalini Raghavan, since April.

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