Mumbai Online beauty retailer Nykaa said quarterly profit declined 58% amid rising spending on marketing and acquisitions and slowing demand for discretionary items like makeup and apparel.
net profit fell From 7.6 crores in the three months ended 31st March 17.9 crore a year ago, FSN E-commerce Ventures Ltd, which runs Nykaa, said in a statement on Friday.
However, revenue from operations increased by 31.4% 973.3 crore from 740.5 crore in the year-ago period. But the March quarter revenue declined 1,098.4 crore in the last three months.
Earnings were impacted by a sharp increase in spending on marketing and acquisitions amid weak demand for its personal care and fashion products. Overall spending up 35% 978.6 crore from 724.5 crore a year ago.
Annual profit fell by a third from 41 crore 61.5 crore in the last year.
“The year has seen a challenging macroeconomic environment for discretionary categories such as beauty, personal care and fashion. Despite the market downturn, our unique growth story continues, thanks to the resilience of our business model and strong revenue growth, responsible unit economics and profitability. Showing long-term sustainability by balancing this,” said Falguni Nair, executive chairman and managing director of the company.
Founded by Nair in 2012, Nykaa offers over 4,000 brands and over 3.1 million product stock-keeping units through its website and mobile application. 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 portfolio. Last year, it acquired over six million new customers in the beauty and fashion sectors.