On Tuesday, FSN E-Commerce Ventures Ltd. (Nykaa) reported that its net profit for the December quarter increased to Rs 17.50 crore, a 106% YoY increase. Operational revenue for the same time increased by 22% YoY to Rs 1,788.80 crore.
Nykaa reported a 26% YoY increase in EBITDA to Rs 98.80 crore for the quarter. The EBITDA margin was 5.5% as opposed to 5.3% year over year. In multi-brand retail operations in the GCC, "Nysaa," adjusted for ESOP and new business expenses, the Ebitda margin was 6.1%, according to Nykaa.
Nykaa has stated, "We keep pushing for increased profitability. EBITDA margin increased to 5.5% for the quarter, a 26% YoY increase fueled by savings in direct and indirect costs," Nykaa further added that the quarter's fulfillment cost as a proportion of revenue was 9.6%, down from 10.7% in Q3 FY2023. Employee expenses as a percentage of revenue, according to Nykaa, improved over the previous few quarters and was at 8.3% for the quarter compared to 8.7% for the same period last year.
Performance by Segment
Beauty & Personal Care (BPC): As the biggest specialized beauty store in the nation, we continue to gain market share. The combined BPC GMV saw an industry-leading growth of 25% YoY.
NSV growth was 20% YoY, mostly as a result of increased masstige and mass market brand discounts. The physical retail footprint is growing, with 39 new locations opening in the last four quarters, bringing the total to 174 locations by December 31, 2023.
Currently, the retail sector accounts for more than 9% of BPC's total GMV. The Ebitda improvement of 35% YoY reflects this. Nykaa's beauty owned brands saw robust year-over-year growth in both GMV and NSV, averaging 40% and 36%, respectively. Three of these brands saw notable scale.
Nyka stated, “Since its acquisition, Dot & Key, our cutting-edge D2C skin care brand, has grown eight times to a Rs 500 crore GMV run rate. Nykaa Cosmetics has attained a Rs 400 crore GMV run rate and is still well-liked by its clients. Within four years of its introduction, Kay Beauty - India's greatest celebrity beauty brand - saw unprecedented growth and acceptance, achieving a GMV run rate of over Rs. 200 crore.”
Fashion: Strong increase across all parameters drove the 40% YoY growth in the fashion GMV. The number of annual unique transacting customers (AUTC) increased by 23% year over year to 2.9 million, while order growth was only 19%. As of December 31, 2023, YoY and AOV were up 18% YoY.
"Our fashion company's profitability has been steadily increasing, which is a testament to the strength of our consumer base and platform. The percentage of Nykaa Fashion's contribution margin to NSV increased by 510 basis points, from 0.9% in Q3 FY2023 to 6.0% in Q3 FY2024. Our marketing expenses have significantly improved, coming in at 23.9% as opposed to 28.6% a year earlier,” Nykaa added.
A long-term strategic collaboration between Nykaa and Foot Locker, a specialist athletic retailer based in New York, was formed during the quarter. As the sole e-commerce partner, Nykaa Fashion will run Foot Locker's India website and sell licenced goods through a Foot Locker-branded store on Nykaa's already-existing e-commerce platforms.
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