Highlights

• Adore Beauty lifted FY2026 revenue 4.3% to a record $207.3 million, including $18.6 million from its retail stores.

• Underlying EBITDA fell 39.3% to $3.8 million, and the company reported an after-tax loss of $4.38 million.

• New customers rose 14.4% to 418,600 while customer acquisition cost dropped 37.4% to $37.30 during the year.

• The company targets FY2027 revenue growth of at least 10% and underlying EBITDA between $9 million and $13 million.

Twenty stores, a semi-automated warehouse and a fresh set of targets: Adore Beauty Group Limited (ASX:ABY) enters FY2027 with a very different physical footprint from a year ago. The online beauty retailer expanded its store network by 13 openings in FY2026 and has run its new national distribution centre in Broadmeadows, Victoria, since July 2026, but the year's investment weighed on profit. Shares were trading at A$0.270 on 23 October 2026, up 3.85%.

Record Sales, Thinner Profit

Revenue for the year to 30 June 2026 grew 4.3% to $207.3 million, a record, with the store network contributing $18.6 million. Gross profit was $71.5 million, and gross margin was 34.8%, down 52 basis points, mainly because of first-half promotions. The company said second-half margin improved.

Earnings moved the other way. Underlying EBITDA fell 39.3% to $3.8 million, about a 1.8% margin, and underlying EBIT was a loss of $152,000. The statutory pre-tax loss was $6.06 million, against a $1.23 million profit a year earlier, and the loss after tax was $4.38 million. One-off costs of about $4.4 million included store pre-opening expenses, restructuring, an ERP project and the distribution centre. No dividend was paid, declared or recommended.

Customers, Rewards and Cheaper Acquisition

The customer numbers were firmer. New customers rose 14.4% to 418,600, and active customers reached 858,800. Customer acquisition cost fell 37.4% to $37.30 as marketing spend dropped 22.8% to 8.8% of sales. Members of the Adore Rewards program, numbering 538,000, accounted for 81% of sales, and owned brands made up 5.8% of product revenue.

The store rollout is the other leg. Eleven Adore Beauty stores and two iKOU stores opened during the year, taking the network to 20. Leases are secured for four more Adore Beauty stores, including a Melbourne CBD flagship, and one more iKOU store. iKOU grew revenue at double-digit rates and had six stores, with a seventh under construction in Hobart.

Warehouse and Balance Sheet

The 6,300 square metre Broadmeadows facility uses automated picking and replenishment. The company expects it to save about $2 million a year in labour costs and to speed dispatch. It was delivered on budget and on schedule, with FY2026 project costs of $448,000.

Borrowings stood at $9.3 million at year end, compared with none a year earlier, and the working capital facility was refinanced and increased to $17 million.

Management changes followed the year end. Chief financial officer and joint company secretary Marcus Crowe resigned on 28 July 2026, and Kylie Archer was appointed interim CFO the next day.

FY2027 Targets and Milestones

For FY2027, Adore Beauty is targeting revenue growth of at least 10% and underlying EBITDA of $9 million to $13 million on a pre-AASB 16 basis. It also expects about $4 million in annualised organisational and cost savings and owned brands to exceed 8% of group product revenue.

The store network is planned to reach 25 stores by the end of calendar 2026. iKOU's first loyalty program is scheduled to launch in the first quarter of FY2027, followed by a digital wholesale platform in the second quarter.