Nykaa's marketing spend jumps 40% YoY to Rs 2,365 mn in Q2 FY25

Strong content revenue from LBB (Little Black Book) also contributed to the overall increase in marketing spends.

By  Indrani BoseNov 13, 2024 9:10 AM
Nykaa's marketing spend jumps 40% YoY to Rs 2,365 mn in Q2 FY25
Comparing sequential quarters, the Fashion vertical's marketing expenses grew by 17% from Q1 FY25 (Rs 672 million), reflecting Nykaa's continuous push in customer acquisition and retention for fashion.

Nykaa's marketing expenses rose from Rs 1,690 million in Q2FY24 to Rs 2,365 million in Q2 FY25, marking a 40% YoY increase. Compared to Q1 FY25 (Rs 2,018 million), there was a 17% increase in marketing expenses in Q2 FY25. For H1 FY25, marketing expenses totaled Rs 4,383 million, compared to Rs 3,287 million in H1 FY24, an increase of 33% YoY.

In Q2 FY25, marketing expenses represented 29.1% of NSV for the Fashion vertical, up from 25.6% in Q2 FY24.

Strong content revenue from LBB (Little Black Book) also contributed to the overall increase in marketing spends.

Comparing sequential quarters, the Fashion vertical's marketing expenses grew by 17% from Q1 FY25 (Rs 672 million), reflecting Nykaa's continuous push in customer acquisition and retention for fashion.

Nykaa's 2023 marketing overhaul signaled a shift away from a traditional CMO structure. Instead, the company opted for a dual-leadership model. Sudhansh Kumar heads performance marketing, focusing on data-driven strategies, while Suchita Salwan leads organic marketing, emphasizing creative initiatives. CEO Falguni Nayar oversees major decisions.

The company reported a 71.6% year-on-year increase in its net profit attributable to ₹10.04 crore for the quarter ending September 2024, compared to ₹5.85 crore in the same quarter of the previous fiscal year. On a quarter-on-quarter basis, the net profit grew by 4.1%.

The company's consolidated revenue from operations for the quarter stood at Rs 1,874.74 crore, marking a 24.4% increase over the Rs 1,507.02 crore recorded in the corresponding quarter of the previous financial year. On a quarter-on-quarter basis, revenue grew by 7% from Rs 17,461 million in June 2024.

Gross Profit for the quarter stood at ₹8,210 million, growing 26% year-on-year (from ₹6,496 million last year) and 9% quarter-on-quarter (from ₹7,560 million).

Nykaa now operates India’s largest beauty retail network of 210 physical stores spanning 72 cities. There was ~25% YoY growth in retail space, including two new flagship stores launched in Mumbai and Delhi.

The company recently expanded its ownership stake in Dot & Key and Earth Rhythm and also expanded its innovative and industry-leading product portfolio in Kay Beauty, Nykaa Cosmetics, Wanderlust and more, driving significant growth in the quarter.

Nykaa Beauty Vertical launched 170+ new brands in Q2 FY2025. Some examples include YSL Beauty, one of the luxury colour cosmetics brands from L’Oreal, which was launched only on Nykaa. Dr Jart+, a Korean skincare brand from The Estee Lauder Company, is available only on Nykaa.

Nykaa’s distribution business Superstore by Nykaa continues to see strong GMV growth of 80% YoY as it continues to expand its operations across the country. The platform now serves over 235,000 transacting retailers across 1,060+ cities and towns. The business continues to see significant improvement in profitability with contribution margin improving by 862 bps YoY, to -11.5% in Q2FY25 from -20.1% in Q2FY24.

Highlights

Investment in new customer acquisition payed off for Nykaa with growth of 31% YoY. The physical stores footprint is currently 210 stores with GMV growth of 37% YoY. The Superstore recorded 80% YoY as it continues to expand retailer network.

Fragrance category grew ahead of overall Beauty with 65% YoY GMV (Nykaa.com) and 105% YoY GMV (in stores).

Nykaa Fashion launched Foot Locker live on Nykaa Foot Locker India Website.

Despite increased expenses, Nykaa managed to maintain its profitability, with EBITDA growing 29% YoY to ₹103.7 crore, from ₹80.6 crore in Sep-23 quarter. This translates into an EBITDA margin of 5.5%, slightly up from 5.4% last year.

First Published on Nov 12, 2024 5:36 PM

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