Adore Beauty Hits Record Sales of $207 Million as Store Costs Cut Profit

Adore Beauty lifted full-year revenue 4.3 per cent to a record $207.3 million for the 12 months ended June 30, but heavy physical expansion cut underlying earnings by more than half.

Underlying EBITDA fell to $3.8 million from $8.1 million a year earlier. Physical stores contributed $18.6 million to total revenue, while gross margin declined 52 basis points to 34.8 per cent.

The Cost of Opening 13 Stores

The Australian retailer added 13 locations during the financial year, comprising 11 Adore Beauty outlets and two Ikou shops. That took its national footprint to 20 doors after years of operating as a pure-play digital platform. New customer numbers climbed 14 per cent over the period.

Alongside lease and fitout costs for an immature store network, the company funded a new national distribution centre, an enterprise resource planning software overhaul, and broader technology upgrades. Weak consumer sentiment in the fourth quarter added further pressure on margins.

Adore Beauty expects store drag to ease as locations mature over an 18 to 24 month cycle. Pure-play e-commerce operators across the Asia-Pacific region have faced similar margin friction when transitioning into physical storefronts, trading immediate cash flow against long-term customer acquisition.

Targets for the New Fiscal Year

Chief executive Sacha Laing said the group has completed its core infrastructure overhaul on budget and on schedule, positioning the business for operational use.

“The foundations to support our scaling omnichannel operations are now in place,” Laing said.

Management has set an underlying EBITDA target of $9 million to $13 million for FY27, predicated on top-line revenue expanding by at least 10 per cent.