Adore Beauty swings to profit, shares advance
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The news: Adore Beauty shares advanced in morning trade on the ASX after the online beauty retailer recorded a swing to full-year profit in the 2024 financial year.
The numbers: Shares were up 5.5% to $1.16 by 11am AEST.
Adore reported net profit after tax of $2.2 million, compared to a loss of $559,000 a year ago. The result beat average analysts' forecasts of a $1.8 million profit, according to Visible Alpha data.
Annual revenue of $195.7 million was up 7.4% year on year, while reported EBITDA grew 661% to $4.8 million, coming in at the top end of its guidance range. The result was supported by a 5.8% rise in returning customers, accounting for 79% of product sales.
The group said it is targeting an EBITDA margin of 4% to 5% in FY25, compared with 2.5% in FY24.
The context: Adore said it has seen revenue grow 7% in the first seven weeks of FY25 compared to the prior corresponding period. It has also signed leases for two Adore Beauty retail concept stores, expected to open in the second half of FY25 to help build brand awareness.
Citi analysts said the result suggests "moderating momentum" going into FY25, with the August trading update of 7% below their expectations. However, they noted that FY24 EBITDA came in at the top end of the guidance range while margin guidance for FY25 was ahead of Citi's expectations.
What they said: "The result showed customer retention was good and costs are well maintained," the Citi analysts said.
"We also expect the launch into physical retailing is as much a way of boosting brand awareness as a way of capturing more revenue," they noted.
The sources: ASX announcement, Citi research
