nykaa: Nykaa Q1 BPC sales value up 23%; sees robust growth in premium category by 2027

FSN Ecommerce Ventures, which operates omnichannel beauty and fashion retail brand Nykaa, said the net sales value of its beauty and personal care (BPC) segment grew 23% on year during the April-June quarter to Rs 1,129.8 crore.

The BPC segment is the biggest contributor to Nykaa’s revenue. However, almost 80% of the gross merchandise value (GMV) in the segment during the June-quarter came from existing customers.

“Our beauty vertical continues to shape into an ecosystem of its own – with steady and balanced growth across our online platforms, physical footprint as well as our consumer brands. Fashion’s consumer brands also experienced steady growth with our own labels now spanning across categories…,” Nykaa’s executive chairperson MD & CEO Falguni Nayar said.

The company on Friday reported a 13.5% year-on-year increase in consolidated net profit to Rs 6.45 crore for the first quarter. Its revenue from operations during the period increased 24% to Rs 1,421.8 crore.

Nykaa pointed out that its profit after tax (PAT) after considering share of loss of associate for the three-month period was Rs 5.4 crore, 8% higher from the same quarter last year.

The online fashion retailer also reiterated that the premium category in the BPC segment is expected to grow faster than the mass category. It sees the premium segment commanding 55% of consumer spends in the beauty vertical by 2027.

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Meanwhile, its fashion business’ sales rose 14% to Rs 197.7 crore. Nayar said the growth in the fashion segment during April-June was “much ahead than the industry growth, but below its long-term trajectory.”The overall fashion GMV grew at 12% during the quarter. “The growth exceeded the short-term industry trajectory, given the weak fashion industry outlook for this quarter in particular,” the company said.

The company also pointed out that its bets on recent acquisitions were also paying off. Beauty brand Dot & Key, which was acquired by Nykaa in 2021, has witnessed a GMV growth of over five times since the acquisition. The brand is profitable and has crossed an annualised GMV run rate – based on June-quarter GMV – of Rs 300 crore, the company said in a statement.

“The Nykaa ethos to grow businesses and brands with passion, but also with discipline, is again visible in the way Superstore By Nykaa and our beauty brand Dot & Key have seen significant scale quickly – all while improving the underlying unit economics. Dot & Key has crossed an annualised GMV run rate milestone of Rs 300 crore, growing five-fold in two years while achieving profitability, demonstrating the successful model of building value with the Nykaa playbook,” Nayar said.

The company’s house of brands under its fashion segment vertical, in which it operates owned brands that it has either built organically or acquired, saw a 30% year-on-year increase in GMV to Rs 91.6 crore in April-June. Nykaa owns 13 such brands. The company also owns 13 brands in the BPC segment, which posted a 39% growth in GMV.

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