Adore Beauty’s Omni-Channel Expansion Risks Execution as EBIT Doubles
Adore Beauty Group reports a solid H1 FY25 performance with a 2.3% revenue increase and a remarkable 126% rise in EBIT, underpinned by a strategic omni-channel expansion and successful iKOU integration.
- Revenue up 2.3% to $103 million in H1 FY25
- Reported EBIT more than doubles to $2.8 million, a 126% increase
- Gross margin expands by 270 basis points to 36.2%
- iKOU acquisition integrated successfully, supporting growth
- Plans underway for 25+ retail stores by 2027, with 4-6 openings in 2025
Strong Financial Performance Signals Strategic Momentum
Adore Beauty Group has delivered a robust first half for FY25, posting a 2.3% increase in revenue to $103 million and a striking 126% jump in reported EBIT to $2.8 million. This performance reflects the early success of the company’s refreshed omni-channel strategy, which aims to drive a material step change in both revenue and profitability over the next three years.
The company’s gross margin expanded by 270 basis points to 36.2%, driven by growth in owned brands, enhanced retail media initiatives, refined promotional cadence, and disciplined inventory management. These margin improvements underpin Adore Beauty’s confidence in targeting a 30% revenue uplift and doubling of EBIT margin within the three-year horizon.
iKOU Acquisition Integration and Retail Expansion
Adore Beauty successfully completed the acquisition of iKOU, with the initial integration phase now complete and performance tracking in line with expectations. The acquisition complements the group’s omni-channel ambitions, expanding its footprint in the beauty retail sector.
The company is actively progressing its retail store rollout, with four new stores scheduled to open by June 2025 and an additional 4-6 locations confirmed for the calendar year. The first Adore Beauty store opened in Southland, Victoria, in February 2025, marking a significant milestone in the company’s transition from a pureplay online retailer to a digitally enabled omni-channel beauty authority.
Customer Base Growth and Digital Innovation
Adore Beauty’s total contactable customer database grew by 20% year-on-year to 1.26 million, with active customers increasing by 4%. This expanding customer base is central to the company’s strategy to increase share-of-wallet and deepen engagement through personalised experiences.
The group’s stores integrate advanced digital features such as AI-driven real-time insights and an "Endless Aisle" concept, offering customers access to over 14,000 products both online and offline. This seamless digital-physical integration is designed to enhance customer loyalty and drive incremental sales.
Outlook and Strategic Priorities
Looking ahead, Adore Beauty reaffirms its FY25 guidance with an EBITDA margin target of 4-5% and EBIT margin guidance of 2-3%. The company’s three-year strategic plan includes expanding the retail footprint to over 25 stores, growing owned brands to 8-10% of product revenue, and leveraging retail media to further improve margins.
CEO Sacha Laing emphasises the company’s commitment to delivering a deeply connected and immersive beauty shopping experience that blends online convenience with physical store engagement. The strategy aims to position Adore Beauty as a leading omni-channel beauty authority in Australia, capitalising on both digital innovation and physical retail expansion.
Bottom Line?
Adore Beauty’s strategic pivot to omni-channel retail and margin expansion sets the stage for sustained growth, but execution risks remain as store rollout accelerates.
Questions in the middle?
- How will Adore Beauty balance investment in physical stores with maintaining online growth momentum?
- What impact will the iKOU acquisition have on long-term profitability and brand integration?
- Can the company sustain gross margin expansion amid competitive pressures and evolving consumer trends?
