The online beauty retailer posts a glamorous debut full-year result for FY21…
The post Adore Beauty (ASX:ABY) share price climbs on record result appeared first on The Motley Fool Australia. –
At the time of writing, shares in the beauty company are levitating at $5.01, up 4.2%.
Adore Beauty share price rises as revenue increases 48%
The Adore beauty share price is moving well into the green today after the company delivered record numbers for the 12 months ending 30 June 2021. Here are some of the key highlights:
Record revenue of $179.3 million, up 48% year-over-year
Record earnings before interest, tax, depreciation, and amortisation (EBITDA) of $7.6 million, up 53% from FY20
Active customers increased 39% year-over-year to 818,000
Gross profit margin of 33.1%, up 1.2% from the prior year
$29 million in cash at the end of FY21
What happened in FY21 for Adore Beauty?
In a massive financial year for the company, Adore Beauty managed to exceed its guidance and deliver strong growth in its first full-year result being publically listed.
Record revenue, profit, and customers were achieved in FY21. According to the release, COVID-19 lockdowns provided a spike in new and returning customers. In fact, active customers rose 39% from FY20.
Although the focus shifted away from cosmetics with consumers staying at home more, skincare products experienced a boost.
Furthermore, the accelerated online market shift resulted in a record revenue result of $179.3 million — representing a 48% increase on the prior corresponding period. Not only did revenue from customers increase through acquiring more buyers but annual revenue per active customer also rose 7% — indicating customers spent more.
Moreover, Adore ticked various items off its to-do list. This included launching a native iOS and Android mobile app, launching a loyalty program, and increasing brand awareness via an expanded national TV campaign. These achievements could be considered as positive for the Adore Beauty share price today.
While Adore’s EBITDA surged to a record $7.6 million for the period, net profit after tax came out at $46,000. For comparison, NPAT for FY20 was $898,000.
What did management say?
Adore Beauty CEO Tennealle O’Shannessy commented on the record result, stating:
Adore Beauty has had an exceptional start to listed life, delivering record revenue and profitability in its first full-year result. Our record financial performance in FY21 highlights the strength of our underlying business and our market-leading position as the online destination of choice within a large $11 billion addressable market.
Adore Beauty continues to capitalise on the structural shift to online channels, rapidly adding new customers that are profitable within the first year. We are committed to delivering a personalised and customer-led beauty discovery and shopping experience, underpinned by ease, convenience, and authentic, trusted content.
What’s the outlook for Adore Beauty?
Looking ahead, the Adore Beauty management has highlighted it continues to benefit from the ongoing structural shift due to COVID-19. In addition, year-to-date revenue in FY22 is up 26% on the prior corresponding period.
While the continued impact of lockdowns has provided a tailwind, it also adds uncertainty to operations. As a result, the company has not provided guidance on this basis. At the same time, EBITDA margins are expected to be between 2% and 4% as the company continues to reinvest for growth.
Adore Beauty share price snapshot
Investors might read today’s results and expect the Adore Beauty share price to have performed well over the past year.
Instead, shares in the online beauty retailer have dropped nearly 28% in the last 12 months. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has climbed 23.6%.
Should you invest $1,000 in Adore Beauty right now?
Before you consider Adore Beauty, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Adore Beauty wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.