Honasa Consumer slips into Rs 19 crore loss on restructuring; operating revenue takes a hit too
Honasa Consumer, the parent company of beauty and personal care brand Mamaearth, reported a decline in its operating revenue for the September quarter while also slipping into losses, on account of a significant hit from its offline distribution restructuring exercise.
For the July-September period, Honasa Consumer reported a 7% year-on-year (YoY) decline in operating revenue at Rs 462 crore. It posted a net loss of Rs 19 crore in the quarter, compared to Rs 30 crore net profit in the same period last year.
“The impact (of the restructuring) was actually higher than what we had planned and expected…we initially had certain assumptions in place, which were based on a certain level of inventory but when we got into the actual execution, it turned out to be relatively higher,” the company’s founder and CEO Varun Alagh told ET.
“We had expected it to be a Rs 50-crore inventory impact but it turned out to be around Rs 70 crore…that led to scale reduction, provisions in expiry and damages of the return stock, which led to the impact on Ebitda as well, which was higher than what we had expected,” he added.
The company undertook a massive transition exercise for its general trade strategy – through which it is moving away from the super stockist model it has currently deployed to direct distributors.
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