Nykaa, an e-commerce beauty retailer, has reported impressive financial results for the second quarter. The company witnessed a 6% sequential growth and a 22% year-on-year growth in its revenue from operations. Additionally, Nykaa’s profit margin for the quarter increased by 10 basis points compared to the previous year.
During this period, Nykaa opened 13 new stores, bringing the total number of stores to 165. Despite a delayed festival season, the company managed to achieve a 22% YoY revenue growth. Its net profit also grew significantly by 50% YoY.
Nykaa attributes its success to the improvement in the quality of its business operations. The company reported that its EBITDA margin expanded to 5.4% in the quarter, representing a 32% YoY growth. This improvement was driven by both direct and indirect cost efficiencies. The fulfillment cost as a percentage of revenue decreased to 9.7% in Q2 FY24, compared to 11.8% in the same period of the previous year. Furthermore, Nykaa managed to reduce its employee expense as a percentage of revenue to 9% in Q2 FY24, reflecting ongoing improvements.
In addition to its impressive financial performance, Nykaa’s gross merchandise value (GMV) also saw a substantial 25% YoY growth, reaching ₹2,943 crore.
The company’s success in the beauty and personal care segment was primarily driven by a 23% YoY growth in net sales value. Nykaa acknowledged the increased competition in this category, noting that discounting has become more prevalent due to the rise of home-grown brands and the entry of international brands.
Nykaa’s retail business has also shown promise, with 13 new stores opening in the second quarter. The fashion business, which is a part of Nykaa’s operations, achieved a consolidated revenue of ₹130 crore, representing a 28% YoY growth.
Overall, Nykaa’s strong financial performance, expansion of its store network, and growth in both the beauty and fashion segments position the company as a dominant player in the e-commerce industry.
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