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MUMBAI : Online beauty retailer Nykaa said quarterly profit fell 58% amid increased spending on marketing and acquisitions and slowing demand for discretionary items such as make-up and apparel.
Net profit fell to ₹7.6 crore in the three months ended 31 March from ₹17.9 crore in the year-earlier, FSN E-Commerce Ventures Ltd, the company that runs Nykaa, said in a statement on Friday.
However, revenue from operations rose by 31.4% to ₹973.3 crore from ₹740.5 crore in the year-ago period. But March quarter revenue declined from ₹1,098.4 crore in the preceding three months.
Earnings were impacted by a steep surge in expenses on marketing and acquisitions amid subdued demand for its personal care and fashion products. Total expenses increased 35% to ₹978.6 crore from ₹724.5 crore in the year earlier.
Annual profit fell by a third to ₹41 crore from ₹61.5 crore in the previous year.
“The year has witnessed a challenging macroeconomic environment, pronounced for discretionary categories like beauty, personal care and fashion. Despite market slowdown, our unique growth story continues, showing the resilience of our business model and long-term sustainability by balancing strong revenue growth, responsible unit economics and profitability," said Falguni Nayar, executive chairperson and managing director of the company.
Founded by Nayar in 2012, Nykaa offers more than 4,000 brands and over 3.1 million product stock-keeping units through its website and mobile applications. 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 portfolios. Last year, it also acquired over six million new customers across beauty and fashion segments.