Home Fashion Nykaa’s Q2 profits slump as Ad expenses surge

Nykaa’s Q2 profits slump as Ad expenses surge


Cosmetics and fashion platform Nykaa saw a 96% slump in quarterly net profit owing to higher marketing and advertisement expenses. The drop, however, also resulted in a 7.4% fall in shares to Rs2,185. Nykaa reported a consolidated net profit of Rs11.7 million for the September quarter, far below the Rs274.7 million quarterly net profit that the company reported in the same period last year and 69 per cent down compared to the June quarter. On the other hand, the company’s marketing and advertisement expenses rose nearly four times to approximately Rs1.2 billion for the said quarter. Its revenue, however, increased 47 per cent to Rs8.9 billion in the quarter ending September 30 from the year before.

“We have maintained growth momentum in our beauty business, accelerated our fashion business and focused on building the brand Nykaa with strong marketing campaigns,” said Falguni Nayar, Founder & CEO, FSN E-Commerce Ventures (Nykaa).

Headquartered in Mumbai, Nykaa was founded in year 2012.  It was launched as an e-commerce portal curating a range of beauty and wellness products. In 2015, the company expanded from online-only to an omnichannel model and began selling fashion products. In 2018, it launched Nykaa Man, a multi-brand ecommerce store for men’s grooming. Earlier this month, Nykaa made a stellar debut on the Indian stock exchange. The stock started trading at a premium of over 82% at Rs2,054 per share on the NSE as compared to its IPO issue price of Rs1,125 and closed over 10% higher at Rs2,208 per share on its first day on the BSE.