FSN-Ecommerce Ventures, the parent firm of Nykaa, posted a 58% drop in its net profit for the third quarter as the fashion and beauty retailer registered heavy expenses amid aggressive plans to expand its operations in India.
Photo credit: Nykaa
While the company’s net profit after tax stood at 290 million rupees (US$3.9 million), its revenue for Q3 rose 36% to US$146.7 million from the same period in 2020.
Nykaa is one of the few profitable startups in India. It swung to a net profit of US$8.3 million for the first time in FYE 2021 from a loss of US$2.2 million a year earlier.
In its pre-IPO presentation, Nykaa said it aims to spend about US$5.3 million to buy new warehouses across India. It had also pushed for store expansion by this quarter, opening 12 physical retail stores across the country.
As of December 31, 2021, Nykaa was operating 96 physical stores in 45 Indian cities.
See also: Nykaa’s financial health in 5 charts
The beauty retailer’s total expenses surged 91% Q3 to US$58.8 million compared to the same period in 2020. The company also doubled its marketing expenses and increased its employee benefits by 56%.
“Marketing continues to be an area of investment for Nykaa to reacquire as well as recruit new consumers as a means to ensure stronger organic growth,” CEO Falguni Nayar said in a statement.
Editing by Collin Furtado and Eileen C. Ang
(And yes, we’re serious about ethics and transparency. More information here.)
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
