Parent Company of Nykaa, FSN E-Commerce, Reports 27 per cent Dip in Q1 Net Profit FSN E-Commerce, the parent company of renowned fashion retailer Nykaa, faced a 27 per cent decline in net profit in the first quarter of the ongoing fiscal year. The net profit dropped to Rs 3.3 crore from Rs 4.5 crore in the same period last year. This reduction in profit can be attributed to a 23.5 per cent rise in expenditure, reaching Rs 1,418 crore compared to Rs 1,148 crore in the corresponding quarter of the previous year.
On the other hand, Nykaa exhibited positive financial growth. Its revenue from operations marked a 24 per cent increase, reaching Rs 1,422 crore, compared to Rs 1,142 crore in the previous year’s corresponding period. Additionally, Nykaa’s Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA), which signifies its operating profit, surged by an impressive 60 per cent, reaching Rs 73 crore as opposed to Rs 46 crore in the same period of the preceding year. This led to an improvement in the EBITDA margin, rising from 3.99 per cent to 5.16 per cent.
Nykaa’s growth extended across various sectors. The gross merchandise value (GMV) of the beauty and personal care (BPC) sector increased by 24 per cent, with strong performances across verticals. The e-commerce platform, physical retail, and consumer brands all witnessed healthy growth. Nykaa’s physical retail space expanded by 43 per cent annually, boasting 152 stores as of 30 June 2023.
Moreover, Nykaa’s owned brands’ GMV experienced almost 40 per cent year-on-year growth. Notably, the BPC annual transacting customers for Q1 grew to 10.3 million customers, a remarkable 58 per cent increase from 6.5 million just two years ago. Impressively, 80 per cent of this quarter’s GMV contribution originated from existing customers.
The others business vertical, including the noteworthy Superstore By Nykaa, showcased substantial growth, achieving a 92 per cent increase in GMV this quarter. Strategic efforts for operational excellence within the Other Business Vertical yielded strong results. Three critical cost levers demonstrated significant improvements throughout the quarter:
– Fulfilment Expenses were reduced to 11 per cent of Net Sales Value, down from 16 per cent in the previous year.
– Marketing Expenses decreased to under 10 per cent, compared to 19 per cent in the previous year.
– Selling and Distribution Expenses lowered to 13 per cent, down from almost 21 per cent in the previous year.
