Beauty and fashion retailer Nykaa said it expected net revenue growth in the third quarter to be higher than mid-twenties with a strong performance in the beauty vertical, though demand in the fashion segment continued to remain subdued.

The company said in an exchange filing that the estimated revenue growth was higher than the growth in the gross merchandise value, indicating positive trend in GMV to Net Revenue translation.

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The retailer said the beauty vertical growth has accelerated compared to previous quarters with the GMV growth for the vertical expected to be in low thirties indicating strong momentum in all of its beauty businesses – ecommerce platform, retail stores, owned brands and eB2B distribution.

The fashion vertical is expected to deliver net revenue growth of around 20 per cent while net sales value growth is likely to be around low to mid-teens, again indicating continuing strong growth in content, marketing and service – related income.

“We believe online fashion demand continues to be subdued, but we remain optimistic about the long-term growth opportunity,” the company said.

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The company said customer acquisition at Nykaa had continued to accelerate. The eB2B distribution business – Superstore by Nykaa, which accounts for 8 per cent of beauty vertical’s GMV (7 per cent a year ago) continued to see rapid expansion, servicing around 260,000 transacting retailers across over 1100 cities.