India’s Nykaa profits halve as marketing and fuel costs soar

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BENGALURU, May 27 (Reuters) – Indian beauty retailer Nykaa reported a 49% drop in quarterly net profit on Friday, hit by soaring fuel and logistics costs at a time when the business is growing marketing spend to attract more customers.

FSN E-Commerce Ventures Ltd (FSNE.NS), the parent company of Nykaa, which has seen a sharp decline in profits in the three quarters since its IPO, has been spending more to boost shipping and its capacity to storage to avoid supply problems.

Led by Falguni Nayar, the fashionable cosmetics platform has aggressively collected inventory from global brands to meet growing domestic demand for makeup, fragrances and skincare products as the pre-season approaches. -wedding.

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While this helped Nykaa’s operating revenue jump 31% to 9.73 billion Indian rupees ($125.45 million), rising inflation has dampened consumer spending power to low income in India.

“Inflationary pressures are mounting in the first quarter of this year,” chief executive Falguni Nayar told Reuters, but noted that rising food and fuel prices have not deterred high-end buyers from the market. ‘company.

Nykaa, which holds a 28.6% market share in the nation’s online beauty and personal care products space, had a quarterly gross merchandise value (GMV), or monetary value of orders on shopping platforms. the company, of 17.97 billion rupees, up 45% compared to last year.

Its total orders rose from 6.2 million to 8.6 million, helped by strong growth in its fashion segment.

For the fourth quarter ending March 31, Nykaa’s total costs jumped 35% to Rs 9.79 billion, including a 48% rise in fulfillment costs, while its marketing and advertising spend jumped 66%.

Consolidated net profit fell to 85.6 million rupees from 168.8 million a year earlier.

($1 = 77.5620 Indian rupees)

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Reporting by Deborah Sophia in Bengaluru; Additional reporting by Rama Venkat; Editing by Shailesh Kuber

Our standards: The Thomson Reuters Trust Principles.

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