Sugar Cosmetics Records an 89% Surge in FY23 Revenue, Reaching Rs 420 Crore

• ByStartupStory     |    January 5, 2024

Sugar Cosmetics, an omnichannel beauty retailer, witnessed a staggering 89% year-on-year surge in revenue, reaching Rs 420 crore in FY23, while maintaining a consistent net loss of around Rs 76 crore.

According to regulatory filings from Tofler, the Mumbai-based company experienced a 68% increase in total expenses, totaling Rs 505 crore, largely attributed to amplified expenditures on stock-in-trade procurement. As stated, “For digital-first retail brands, offline expansion entails storing higher quantities of inventories, leading to increased expenditure on stock purchases.”

Throughout the fiscal year, Sugar Cosmetics notably expanded its offline presence, nearly doubling its store count to approximately 200 by June 2023. The company, initially an online-first direct-to-consumer (D2C) beauty brand, broadened its horizons into offline channels.

Highlighting the company’s fiscal strategies, the advertising spend soared by 67% to Rs 162 crore in FY23, constituting nearly 38% of the operating revenue. “The company’s advertising spend also increased 67% on year in FY23 to Rs 162 crore – almost 38% of its operating revenue.”

In pursuit of profitability, the company had previously projected achieving this milestone by the conclusion of the ongoing fiscal year, a declaration made in November.

Back in April 2022, Sugar Cosmetics successfully secured a $50 million funding round led by L Catterton, accompanied by existing investors A91 Partners, Elevation Capital, and India Quotient.

Competing in the beauty and personal care sector with various prominent players, Sugar Cosmetics faces competition from Honasa Consumer, Purplle, Wow Skin Science, and several smaller D2C companies.

This exponential revenue growth aligns with a broader trend seen across the beauty and personal care industry during the last fiscal year. As noted, “The revenue growth clocked by Sugar Cosmetics mirrors a trend witnessed by other beauty and personal care companies in the last financial year.”

Additionally, fellow brands such as Plum and Purplle also reported substantial revenue surges. Plum witnessed a 71% rise to Rs 322 crore, while Purplle’s operating revenue doubled to Rs 475 crore in FY23.

A joint study by Redseer Strategy Consultants and Peak XV Partners forecasted India’s beauty and personal care market to grow at a compound annual growth rate of 10% between 2022 and 2023.

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