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Highlights

  • In FY24, Adore Beauty’s annual revenue reached AUD 195.7 million, a 7.4% YoY
  • In first seven weeks of FY25, revenue increased by 7.0% YoY.
  • The company aims to achieve 30% revenue growth and double EBIT margin within three years.

Established in 2000, Adore Beauty Group Limited (ASX: ABY) is an ASX-listed online retailer that deals in beauty and skincare products. The company delivered significant increase in earnings in the financial year 2024 (FY24). During the fiscal year, annual revenue reached AUD195.7 million, marking a 7.4% increase compared to the prior corresponding period (pcp). In FY24, the company's reported EBITDA surged to AUD4.8 million, marking a remarkable 661% increase over the previous year, reflecting a strong EBITDA margin of 2.5%, in line with the company’s guidance.

FY25 trading update

As Adore Beauty moves into FY25, the company has maintained its sales momentum, with revenue in the first seven weeks of the year up by 7.0% YoY. In line with its growth strategy, the company has signed leases for two new retail concept stores under the Adore Beauty brand, expected to open in the second half of FY25. These stores aim to boost brand awareness and expand the company's footprint in the Australian beauty market.

Additionally, the company has made strategic moves to expand its product offerings, acquiring the Australian beauty and wellness brand, iKOU. This acquisition is expected to strengthen ABY’s private label portfolio and contribute to sales and margin growth. The company has also launched a new chatbot, ABi, which enhances the responsiveness to customer queries, further improving the overall customer experience.

Recent business update

On 22 November 2024, ABY unveiled its three-year plan focused on implementing an omni-channel strategy to achieve 30% revenue growth and double its EBIT margin within three years. The plan includes expanding its retail presence with over 25 new stores, increasing margins through owned brand offerings, and boosting investment in retail media. The company also aims to enhance operational efficiencies and optimise working capital by leveraging data and AI for improved inventory management. Following targets will assist in assessing the success of the stratetgy:

  • AUD 260 million in revenue (30% growth from FY24)
  • A 200-basis-point improvement in gross margin
  • 8-10% of revenue coming from owned brands
  • An EBITDA margin of over 8%
  • 1.25 million active customers

Outlook

The integration of iKOU is expected to enhance sales growth and margin expansion, further strengthening ABY's product range and market position. The focus is on operational efficiency and cost management, in FY25. Despite a challenging environment, including cost-of-living pressures and subdued consumer sentiment, ABY aims to achieve an EBITDA margin of 4-5% in FY25.

Share performance of ABY

ABY shares closed 0.55% lower at AUD 0.905 apiece on 30 December 2024. Over the past year, ABY’s share price has decreased by almost 35.36%, and in the last six months, it has increased by nearly 10.37%.

52-week high of ABY is AUD 1.46, recorded on 26 February 2024 and 52-week low is AUD 0.78, recorded on 1 July 2024.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 30 December 2024. The reference data in this report has been partly sourced from EODHD/Others.