Adore Beauty has shifted from being purely an online player to a broader beauty retailer that now spans e-commerce, private-label products and a growing network of physical shops. The business operates under its core Adore brand alongside the Ikou skincare label it acquired in 2024 for about $25 million and it is trying to carve out space in a market crowded by premium specialists and value-focused chains. This latest half-year result lands in a tough retail backdrop, where customers are cautious and promotions are increasingly necessary to win sales.
In the first half of the financial year, Adore Beauty’s net profit fell to roughly $189,000, down about 70% even as revenue rose 8.7% to $112 million. Heavy discounting around major events such as Black Friday helped drive top-line growth but compressed margins and spooked the market, contributing to a share price fall of about 24% to around 65.5 cents. The group has accelerated its bricks-and-mortar rollout, adding 10 new locations in the half and taking its total store count to 18 across Adore and Ikou. It has also lifted the contribution from own-brand ranges which now generate more than 6% of total revenue. Analysts suggest that more stores, higher-margin in-house labels and a strong loyalty program, with Adore Rewards now exceeding 500,000 members and accounting for nearly 80% of sales, could support a turnaround in profitability if promotional reliance eases.
Looking ahead, Adore Beauty appears to be banking on a slower, more sustainable model of growth that prioritises recurring customers and richer margins over short-term volume. The company is guiding to an underlying EBITDA margin of about 3 to 4% for the full year and is targeting around $260 million in revenue with roughly 8% EBITDA margins by 2027, supported by its store network, loyalty base and business overhaul. Still, with no dividend paid in the half and its market value now sitting near $81 million compared with a $650 million valuation at listing in 2020, the strategy seems to be at a crossroads. If store openings and brand investments pay off, Adore could regain momentum, but if retail conditions stay weak and discounting remains entrenched, the path to those longer-term targets may prove harder than planned.
