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Adore’s first half faced tough comparisons with the year earlier period when most of Australia was in lockdown. Revenue in the first seven weeks of the new year is down 28 per cent, but Adore said it expected to return to double-digit revenue growth in the second half.
Outgoing chief executive Tennealle O’Shannessy said inflation is hitting right across the business and Adore is cutting costs in its supply chain, hiring of new staff and prioritising investments that will drive margin expansion.
She said returning customers remained the largest contributor of revenue over the 2022 fiscal year, which reached nearly $200 million. These shoppers accounted for 70 per cent of sales and helped to drove higher average orders and annual spend.
“Lockdowns a year ago will make revenue growth more volatile, and so it becomes more stable in the second half once we’ve cycled through that period. But the absolute trends underneath underlying that business is still strong,” she told The Australian Financial Review.
Ms O’Shannessy said consumers use Adore’s products daily, and she does not expect big impacts on overall sales for the year.
For the full year, Adore posted revenue of nearly $200 million, up 11 per cent, and up 65 per cent on 2020. Active customers – those that bought items in the past 12 months – were 872,000, up 7 per cent on 2021. Returning customers were up 31 per cent on the prior year. Earnings before interest, taxes, depreciation and amortisation were $5.3 million with EBITDA margin of 2.7 per cent in line with guidance.
Net profit after tax was up 181 per cent to $2.37 million. No dividends were paid during the year ended 30 June.
Its first private label range which is gender-neutral – Viviology – was launched during the year, as Adore looked to diversify revenue and margin profile.
Ms O’Shannessy said owned brands are an important pillar in the long-term growth strategy, providing future expansion opportunities in new geographic regions and distribution channels, and higher margins.
“At scale, we are targeting owned brands to contribute 15 per cent or more of all revenue with gross margins above 80 per cent,” Ms O’Shannessy said.
She said Adore is creating independent standalone brands that address specific gaps in the market. The group leverages customers data and insights to identify gaps in the offering to create new standard standalone brands.
The online beauty retailer said earlier in August that Ms O’Shannessy would step down in February to head up ASX-listed IDP Education.
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