Shares of FSN E-commerce Ventures, which controls the Nykaa brand, slipped over 7% in Thursday’s trade to Rs 1710.00 per share on the BSE after the company announced its Q3 FY22 results on February 9. The stock is down more than 14% in 2022.

The cosmetics-to-fashion retailer reported its December quarter consolidated net profit at Rs 29.01 crore, a 57.87% decline as compared to Rs 68.88 crore reported in the corresponding quarter last year.

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Revenue from operations stood at Rs 1,098.36 crore, up 35.94% from Rs 807.96 crore in the year-ago period.

Sequentially, both numbers have improved. Profit jumped 24% as compared to the September 2021 quarter and revenue from operations climbed 24%.

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The year-on-year decline in the company’s profits was led by higher staff costs and finance costs. Its employee costs jumped 56% year on year and finance costs increased by 71.5%.

The e-retailer’s EBITDA came in at Rs 69 crore at a margin of Rs 6.3% as against 3.3% in the previous quarter (Q2 FY22).

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The sequential improvement was driven by a higher gross profit margin. However, GPM was down by 697 basis points (bps) year on year. Nykaa’s consolidated gross merchandise value (GMV) rose 26% sequentially and 49% year on year to Rs 2,043.5 crore in the quarter.

Beauty and personal care (BPC) GMV grew 29% QoQ and 32% YoY, while fashion GMV grew 17% QoQ and 137% YoY, the company reported.

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In Q3 FY22, marketing and advertising expense was 14% of revenue from operations as compared to 7.5% in Q3 FY21 due to constant focus on building brand awareness and higher acquisition of new customers.

“We continue to be on a steady growth trajectory across both the beauty and fashion businesses. Growth in the beauty business accelerated in a relatively normalised Covid environment, with a strong revival in the cosmetics category,” said Falguni Nayar, MD and CEO of Nykaa’s parent company.

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She added that the brand’s physical outlet network also experienced one of its strongest quarters and the brand continued opening new outlets in line with its larger omnichannel vision. Marketing continues to be an area of investment for Nykaa, to reacquire as well as recruit new consumers as a means to ensure stronger organic growth. In the last one year, the company’s spending on marketing and advertising has more than doubled.

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At 3.30 pm, FSN E-commerce Ventures was trading 7.56%, or 139.85 points, down at Rs 1,710.00 on the National Stock Exchange.