Adore Beauty Group reports a 7.4% revenue rise in FY26 despite market headwinds and outlines ambitious FY27 targets backed by new stores and operational efficiencies.
- FY26 revenue up 7.4% to $193.4 million
- New customer acquisition rises 13.9%
- Underlying EBITDA expected at $4 million in FY26
- Plans to expand store network to 25 locations in FY27
- FY27 targets include 10% revenue growth and $9-13 million EBITDA
FY26 Revenue Growth Amid Cost Pressures
Adore Beauty Group (ASX:ABY) has reported a 7.4% increase in revenue for the first 47 weeks of FY26, reaching $193.4 million, despite a tougher trading environment marked by rising cost-of-living pressures. New customer acquisition surged 13.9% year-on-year, reflecting the effectiveness of its omni-channel strategy and retail footprint expansion.
CEO Sacha Laing highlighted a slowdown in Q4 trading due to increased promotional activity but noted that gross margins for the second half are expected to hold steady at 34.5%, supported by higher-margin own brands and the growing retail network. This performance builds on the momentum from the previous year, when Adore Beauty posted record profits and accelerated its omni-channel expansion, including plans for a national fulfillment center record profitability for FY25.
Capital Investments Set Stage for Efficiency Gains
The group completed its most capital-intensive investment cycle in 26 years, including the acquisition and integration of wellness brand iKOU, opening 17 new stores (14 Adore Beauty and 3 iKOU), upgrading its ERP platform, and deploying AI capabilities. These investments underpin a platform for future profit growth, with the National Distribution Centre (NDC) expected to deliver around $2 million in annual labour cost savings.
Adore Beauty continues to work closely with Commonwealth Bank of Australia to support these initiatives through asset-backed facilities and is refreshing its working capital arrangements to match its scaling needs. The company’s strategy of combining online strength with physical retail is aligned with trends observed in the beauty retail sector, where operational efficiency and customer experience drive competitive advantage integration of iKOU and retail expansion.
FY27 Targets Reflect Confidence Amid Uncertainty
Looking ahead, Adore Beauty aims for at least 10% revenue growth in FY27 and underlying EBITDA between $9 million and $13 million, more than doubling FY26’s expected $4 million EBITDA. The company plans to open four more Adore Beauty stores and one iKOU store in the first half of FY27, bringing its total store count to 25 nationwide.
Laing emphasized that while macroeconomic conditions remain uncertain, the group’s recent operational efficiencies, including a $2.5 million annualised cost reduction from a reshaped Head Office, position it well to capitalise on growth levers such as AI deployment and the loyalty program. The ERP transition is nearing completion, and the NDC commissioning is on track, both expected to materially enhance customer experience and cost efficiency.
These targets and initiatives appear calibrated to balance ambition with caution, considering the ongoing external economic challenges and the delayed full benefit of new growth drivers until FY27.
Bottom Line?
Adore Beauty’s FY27 ambitions hinge on operational efficiencies and new store growth amid a cautious consumer backdrop.
Questions in the middle?
- How will Adore Beauty’s AI investments translate into measurable sales uplift?
- What impact will the expanded retail footprint have on customer acquisition costs?
- Can the National Distribution Centre deliver the projected labour cost savings as planned?