Adore Beauty’s EBITDA Soars 68% as Retail Stores and Loyalty Program Drive Expansion

Record Profitability Amid Strategic Transformation

Adore Beauty Group Limited (ASX, ABY) has delivered a standout FY25 performance, posting record earnings before interest and tax (EBIT) of $4 million, a 74.8% increase over the prior year, alongside a 67.8% jump in EBITDA to $8.1 million. Revenue grew modestly by 1.6% to $198.8 million, reflecting a deliberate shift towards higher-quality revenue streams and disciplined cost management.

The company’s gross profit margin expanded by 190 basis points to 35.3%, underpinned by growth in owned brands and retail media, as well as optimized inventory management that improved working capital by $3.1 million without compromising stock availability.

Omni-Channel Strategy Accelerates Customer Growth

Adore Beauty’s transition from a pure-play online retailer to an omni-channel, multi-banner business is gathering pace. The group opened eight Adore Beauty and three iKOU retail stores in 2025, with plans to reach a national footprint of 25+ stores by the end of FY27. These stores blend digital innovation with personalized in-store experiences, including dermal therapists and spa facilities, broadening the company’s addressable market beyond the $13.9 billion Australian beauty and personal care sector.

Customer acquisition has rebounded strongly, with new customers up 14% year-to-date in FY26, while acquisition costs have fallen 40%, reflecting more efficient marketing and a refined promotional cadence. The recently launched "Adore Rewards" loyalty program boasts 473,000 active members, who now account for nearly 80% of sales, highlighting the success of customer retention efforts.

Operational Efficiencies and Future Growth Catalysts

Operational initiatives have driven significant cost of doing business (CODB) efficiencies, with the company on track to improve margins by 150 basis points by FY27. Key measures include integrating iKOU’s direct-to-consumer fulfillment, automating carton making, and rationalizing technology infrastructure.

Looking ahead, Adore Beauty has secured board approval for a new 6,500 square meter semi-automated national fulfillment center, expected to be operational in Q1 FY27. This facility aims to unlock substantial supply chain efficiencies and contribute to margin expansion, with a forecast payback period of three to four years.

Leadership and Market Position

The company refreshed its board during the year, welcoming seasoned retail executives Iain Nairn and Jason Murray to guide its next growth phase. Meanwhile, CEO Sacha Laing highlighted the company’s strong cash position of $12.7 million and zero debt, positioning Adore Beauty well to capitalize on its omni-channel strategy and the growing beauty market.

With owned brands expected to represent over 6% of group revenue in FY26 and continued expansion of retail stores and digital capabilities, Adore Beauty is poised for sustained growth and margin improvement in the coming years.