Adore posted $180.6 million revenue and $0.6 million EBITDA for the 2023 financial year. Turn back the clock to its IPO (and zero-interest-rate spending conditions), and Adore Beauty made $121.1 million revenue and $5 million earnings in the 2020 financial year.
Its life on the bourse has been plagued by rising inflation and cost-of-living pressures, dampening consumer sentiment and adding to costs. However, things are looking up.
In a late-October trading update, Adore said it delivered $47.5 million revenue in the three months to September 30, up 4.7 per cent on the prior corresponding period – tracking in line with its August trading update but below consensus expectations of 9.5 per cent-plus.
The company, now led by ex-Priceline executive Tamalin Morton, reaffirmed its EBITDA margin guidance of 2 per cent to 4 per cent in FY24, despite the tougher retail environment.
The update saw Adore’s shares pop to their highest level in months, gaining 9.9 per cent to $1. No doubt eyes will be on how sales perform over the Black Friday and Christmas holiday spending periods.
Its long-term growth strategy is tied to private-label product expansion and more returning customers shopping via its app.
Bruising ride
THG, founded by Matthew Moulding in 2004, has three divisions – beauty, ingenuity and nutrition and wellness – and operates beauty websites like Lookfantastic, Cult Beauty and Dermstore.
It last reported £2.2 billion in annual sales, £64.1 million adjusted EBITDA and a £495.6 million annual loss. The firm has shed two loss-making businesses this year, OnDemand and ProBikeKit, and ended takeover talks with private equity group Apollo.
Any takeover would require the buy-in of Adore’s major shareholders. Founders Kate Morris and James Height each control a sizeable chunk while Quadrant Private Equity still holds 32.51 per cent.
New York-based investor Woodson Capital Management holds about 6.6 per cent. Small-cap specialist Spheria Asset Management has newly emerged as a major shareholder.
Interested parties (and Adore) would be taking heart from a revival in local beauty and fashion deals. Most recently, and as reported by Street Talk, resources billionaire Gina Rinehart is weighing an acquisition of iconic Australian oilskin coats and clothing products brand Driza-Bone.
Meanwhile, Andrew and Nicola Forrest have bought Akubra, the 147-year-old Australian-owned hat company and New York private equity firm Aria Growth Partners is seeking to buy a minority stake in sunscreen brand Ultra Violette.
