The Bengaluru-based company reported a net profit of Rs 31 crore for fiscal year 2024, a significant improvement from the net loss of Rs 782 crore in the previous year. Operating revenue grew by 15% to Rs 5,122 crore from Rs 4,465 crore, per regulatory filings.
Myntra, which entered quick commerce last week, has been working on reducing the cost of returns which has played a key role in reducing losses. Returns represent a significant expense for fashion businesses, where return rates typically range from 30-40%. The company has been discouraging returns by offering discounts and other benefits.
The company, which sells apparel, accessories and footwear among other products, generated Rs 52 crore in non-operating revenue, mainly from royalty income, raising its total revenue to Rs 5,174 crore.
“Profitability is not coming because we are cutting costs somewhere, or because we are leaving opportunities for growth on the table. They’re coming just because we have the size and we have the leverage and the technology to really be able to look at profitability without compromising on any growth left on the table,” chief executive Nandita Sinha told ET in an interview on May 28. In addition to leading Myntra, Sinha is also in charge of Flipkart Fashion.
In March this year, Myntra said that it achieved earnings before interest, taxes, depreciation and amortisation (Ebitda) profitability in the last two quarters of calendar year 2023.
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The online fashion retailer’s total expenses saw a slight decrease, falling to Rs 5,123 crore from Rs 5,290. The company spent Rs 1,996 crore on the cost of materials, down from Rs 2,166 crore, marking a decrease of 8%, while incurring other expenses of Rs 2,235 crore from Rs 2,321 crore.
ETtechAdvertising expenses dropped by nearly 5% to Rs 1,677 crore, while employee benefit expenses increased by 8% to Rs 800 crore. In July last year, the company carried out a restructuring, resulting in the layoff of around 50 employees, with the in-house brands vertical being the most affected.
On May 28, Sinha said that Myntra has gained market share over the past 12-18 months, despite growing competition from rivals like Reliance Ajio and Nykaa. According to her, international brands and direct-to-consumer (D2C) brands have become key focus areas for the firm, as they account for a significant part of high-value retail for the firm.
In addition to its core fashion business, the company is scaling up new segments such as beauty and home décor.
Its quick commerce business, M-Now, has gone live in some areas of Bengaluru with about 10,000 stock-keeping units (SKUs). It plans to expand the service to Mumbai, New Delhi and Pune in the coming months. It will deliver products within 30 minutes using dark stores, or micro warehouses, run by third parties as well as retail stores of fashion brands, as reported by ET on December 5.
