Adore Beauty Group Limited

Adore Beauty reported H1 FY26 revenue of $111.9 million, up 8.7% year on year. Underlying EBITDA was $4.1 million on a pre-AASB 16 basis, up 14.5%, and statutory EBITDA was $4.9 million. Gross margin was 35%, and marketing costs fell by almost 30%, with marketing as a percentage of sales down 520 basis points to 8.6%. New customers grew 21.8%, active customers rose 4.7% to 850,000, and the contactable database increased more than 14% to 1.35 million. Cash on hand was $8.2 million at 28 December, and operating cash flow was $2.4 million. For FY26, management reaffirmed underlying group EBITDA margin guidance of 3% to 4% on a pre-AASB 16 basis, equivalent to 5% to 6% under the previous methodology. Management also said it is targeting a national retail network of 20 stores by the end of this half and reiterated its FY27 active customer target of more than 1.25 million.

Sacha Laing framed the half as a strong start to FY26, saying the maturing omnichannel strategy is delivering customer revenue and profit growth despite a difficult retail backdrop. He emphasized that stores, loyalty, app adoption, and owned brands are improving both growth and quality of earnings, while the business continues to cycle out unprofitable promotions. His tone was constructive and confident, with repeated references to momentum, operational progress, and the company being on track to meet its strategic goals.

Marcus Crowe highlighted record underlying and statutory EBITDA of $4.1 million and $4.9 million, respectively, and tied the profit improvement to higher revenue, owned brands, retail media, and disciplined cost control. He noted marketing costs fell by almost 30% and marketing as a percentage of sales dropped to 8.6%, while cash at period end was $8.2 million and operating cash flow was $2.4 million. He also flagged balance-sheet and funding work ahead, saying the company is exploring funding options to support growth, and explained that higher rental costs under AASB 16 and store-related investment were affecting cash flow.

Analysts focused on gross margin, store economics, recent trading, and whether the company is still gaining share. Management said half 2 should see a more measured margin profile because the Black Friday/Cyber Monday spike only occurs once a year, and that loyalty, app adoption, and the store network should support full-price revenue. On stores, management said western markets are outperforming because they represent under-penetrated customer areas online, while confirming rollout will continue across all states. On trading and share, management said it does not provide a trading update, but argued the 8.7% revenue growth versus an estimated beauty-market growth rate of about 4% means it likely took meaningful share.