News – AU – Why the Adore Beauty (ASX: ABY) share price is soaring today


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ASX 200 | A B C D E F G H I J L M N O P Q R S T U V W X

James Mickleboro | 23 February 2021, 10:08 am | More on: ABY

The share price of Adore Beauty Group Ltd (ASX: ABY) is rising rapidly after the publication of the half-year results

At the time of writing, the online beauty products retailer stocks are up 11% to $ 633

As you may have guessed from today’s price reaction from Adore Beauty, the company developed very positively in the half-year

In the six months to the 31st As of December, the company had sales of $ 96 million, an increase of 85% over the same period last year and 8% over the prospectus forecast of 89 million USD

Management indicated that this was due to strong customer growth and continued high levels of customer loyalty. As of the end of the reporting period, Adore Beauty had 777000 active customers on his platform, an increase of 82% since that time last year

The gross profit margin also went in the right direction It came up 325% for the half, an increase of 1.4 percentage points over the previous corresponding period This was underpinned by the expansion of the product margin

On the positive side, this margin expansion resulted in Adore Beauty posting earnings before interest, taxes, depreciation and amortization (EBITDA) up 188% to $ 5 million, which was also 58% above prospectus guidance of $ 3.3 million

The bottom line is that the company posted half-year after-tax profits of $ 2.54 million, a loss of $ 3.18 million for the same period last year

At the end of the reporting period, Adore Beauty had $ 259 million in cash and no debt

She said, “Adore Beauty is Australia’s leader in online beauty retail. Our strong performance in this half is underpinned by high levels of customer loyalty, retention and satisfaction and includes a record $ 15m trading day”

“We have been delighted to have many new customers on our platform over the past six months and we look forward to continuing to be the online beauty shopping destination for our loyal customers,” added O’Shannessy added

Although no guidelines were given for the year as a whole, Tennealle O’Shannessy continues to see his outlook as very positive

She said, “Looking ahead, we have a clear strategy to cement our position as the online market leader and we are well positioned to gain market share in a large and growing market that is benefiting from structural tailwinds ”

And while the company has benefited greatly from the pandemic that is pushing shoppers online, it believes it can still be successful even after COVID-19

Management stated: “As restrictions related to COVID-19 ease, we expect sales growth in FY21 above pre-COVID levels due to the structural shift to online and the strong retention of new customers during COVID -Peak period have been won, continue ”

“We have a clear strategy to consolidate our online leadership and we are well positioned to gain market share in a large and growing market that is benefiting from structural tailwinds as the business grows, we expect economies of scale increase operational leverage and further expand the EBITDA margin, ”he concluded

Despite this strong form, Adore Beauty stock is still trading below its IPO price of USD 675

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James Mickleboro, contributor to Motley Fool, has no position in any of the stocks mentioned The Motley Fool Australia has no position in any of the stocks mentioned The Motley Fool has a disclosure policy This article provides general investment advice only (under AFSL 400691) Authorized by Bruce Jackson

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News – AU – Why the share price of Adore Beauty (ASX: ABY) is rising rapidly today
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