Adore Beauty Reports 4.3% Revenue Rise to $207.3M, EBITDA Falls to $3.8M

Record Revenue Masks Profit Pressure from Retail Expansion

Adore Beauty Group (ASX:ABY) has posted a record $207.3 million in revenue for FY26, marking a 4.3% increase over the prior year. This milestone was powered by a rapidly expanding retail footprint and double-digit growth in owned brands, notably iKOU. However, beneath the topline growth, the Group reported a statutory pre-tax loss of $6.06 million, weighed down by $4.36 million in one-off expenses linked to store pre-opening, restructuring, ERP implementation, and commissioning of a new National Distribution Centre (NDC).

Underlying EBITDA fell sharply, down 39.3% to $3.78 million (1.8% margin), reflecting the higher fixed cost base of a still-maturing retail network and challenging trading conditions, especially in the second half. The retail channel alone posted an underlying EBITDA loss of $1.1 million in FY26, unsurprising given that more than half of the 20 stores were less than a year old.

Omni-Channel Strategy Gains Traction with Higher-Value Customers

The Group’s omni-channel push is beginning to bear fruit, with omni-channel customers; those shopping both online and in stores; delivering a lifetime value 2.5 times higher than online-only customers. This cohort contributed 9.6% of total Group revenue in FY26, with a notable acceleration in the second half to 11.9%, up from 5.1% in H1. Store transaction conversion rates improved from 13.1% to 17.4% over the year, signaling growing operational maturity.

Adore Beauty opened 13 new stores during FY26 (11 Adore Beauty, 2 iKOU), more than doubling its physical presence to 20 locations nationally, including new markets in Queensland and South Australia. The Group has already secured leases for five additional stores to open in the first half of FY27, including a flagship Melbourne CBD location and the expansion of iKOU into Hobart.

Infrastructure Investments Set to Drive FY27 Efficiency Gains

FY26 saw significant infrastructure investments underpinning the Group’s omni-channel ambitions. The 6,300 sqm semi-automated NDC in Broadmeadows, Victoria, became operational in July 2026 and is expected to deliver $2 million in annual labour savings from Q2 FY27. Alongside this, a new Enterprise Resource Planning (ERP) system was rolled out on schedule, and proprietary AI tools were deployed to enhance personalised product recommendations, customer service, and operational analytics.

These initiatives are expected to improve productivity and reduce costs, supporting the Group’s profitability targets in FY27. The head office restructure completed in FY26 is forecast to yield over $2.5 million in annualised cost savings.

Owned Brands and Retail Media Expand Margins

Owned brands, led by iKOU, contributed 5.8% of total Group product revenue in FY26, up 107 basis points from the prior year. iKOU posted double-digit revenue growth, supported by a brand refresh, infrastructure investment, and expanding retail network. The brand is set to launch its first loyalty program and digital wholesale platform in FY27, with owned brands expected to exceed 8% of product revenue in the coming year.

Retail media also grew strongly, leveraging Adore Beauty’s customer insights and marketing assets to deliver higher-margin revenue streams, which helped offset margin pressures from promotional activity and competitive intensity.

Customer Acquisition Efficiency Improves Despite Market Headwinds

New customer acquisition rose 14.4% to 418,600, cycling 6.1% growth in the prior period, while customer acquisition costs (CAC) fell 37.4% to $37.30 per customer, marking best-in-class marketing efficiency. Active customers increased 2.6% to 858,800, with loyalty members accounting for 81% of sales, up from 70% the previous year.

The Adore Beauty mobile app continues to gain traction, representing 36% of online sales, up 21% year-on-year. The Group’s partnership with Google to launch agentic retail in Australia allows customers to shop directly through Google Search and AI-powered apps, reflecting innovation in digital customer experience.

Balance Sheet and Capital Management

Adore Beauty executed its largest investment cycle in 26 years, supported by a $17 million working capital facility with Commonwealth Bank and a project-backed facility funding the NDC. As of 30 June 2026, net debt stood at $9.3 million with $14.4 million in undrawn facilities. Remaining capital expenditure for FY27 is forecast at approximately $8 million, weighted to the first half.

FY27 Outlook: Material Step-Up in Profitability Expected

Looking ahead, Adore Beauty targets at least 10% revenue growth and underlying EBITDA of $9 million to $13 million on a pre-AASB 16 basis for FY27. This anticipated profitability step-up is underpinned by operational efficiencies from the NDC and ERP, maturation of the retail network, growth in owned brands and retail media, and disciplined cost management.

The Group plans to expand its retail network to 25 stores by the end of 2026, further cementing its omni-channel strategy. While macroeconomic conditions remain uncertain, these investments and strategic initiatives position Adore Beauty for accelerated growth and improved earnings quality.