Adore Beauty reports revenue of $200 million for the fiscal year
Adore Beauty released its financial results for the 2021-22 fiscal year this morning, with record annual revenue of $200 million.
This figure is up 11% from the $179.3 million recorded in 2021, and 65% from $121 million in 2020, demonstrating considerable growth for the digital retailer during the pandemic thanks to the transition from consumers shopping online.
In its report to the ASX, Adore Beauty said its loyalty program – launched in March 2021 – contributed 60% of total revenue.
Talk to SmartCompany Plus earlier this year about the program, Miranda Bliss, senior loyalty and retention manager, said it had “definitely exceeded all expectations” and was “something that Adore had been thinking about for many years. “.
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But it was the meteoric customer growth the company experienced in the first year of the pandemic that really sharpened its focus on customer retention strategy.
“Worship was [previously] very focused on acquiring new customers,” Bliss said. SmartCompany Plus. However, COVID-19 has helped the brand recognize that it’s more important than ever to focus heavily on retaining those customers.
And such awareness paid off, with the financial report showing that more than 95% of Adore Beauty’s most valuable customers had signed up for the loyalty program and that 70% of its revenue came from loyal customers who buy. more than three times a year. .
There was a 31% annual growth in repeat customers (up 115% from FY 2019-20), which “reflects strong retention of customers acquired during shutdowns,” the report said.
Adore Beauty’s report also indicates that its growth in repeat customers has offset any decline in new customer acquisition, resulting in a 48% growth in active customers over two years.
Alongside the loyalty program, Adore Beauty also launched its own app, which now accounts for 11% of total revenue.
But the big moves don’t stop there.
In June 2022, Adore Beauty also made the long-awaited step into the private label space with the launch of Viviology, its private label skincare brand.
CEO Tennealle O’Shannessy said in the report that Vivology sales also exceeded internal expectations, with Adore on track to launch its second offering of owned products later in the calendar year.
“Private brands are an important pillar of our long-term growth strategy, providing future opportunities for expansion into new geographies and distribution channels, and delivering improved margins,” O’Shannessy said.
At the top
Many digital brands find themselves winding down their operations after the rapid growth the pandemic has brought about.
But as the earnings report shows, that hasn’t been the case for Adore Beauty, nor does the brand believe it will face such a fate in the future.
It does, however, recognize inflationary pressures related to employee, freight and marketing costs, and will implement cost control measures to actively manage these pressures.
Despite a current EBITDA margin of 2.7%, Adore has indicated that it does not expect to achieve an EBITDA margin of 2-4% in FY23. It still expects to remain profitable on an annual basis and return to an EBITDA margin of 2-4% for FY24.
And going forward, Adore Beauty expects societal transition to e-commerce as well as its own strategic initiatives – such as its own brands – to help increase its operating leverage and EBITDA margin expansion. over time.
“Adore Beauty is targeting 8-10% EBITDA margin for the full year of FY27, with mobile app and own brands targeting 30% and 10% revenue contributions respectively,” indicates the report.
Adore Beauty also highlighted its interest in a merger and/or acquisition by FY 2026-27 in the report, as well as listing it as one of its “long-term goals” alongside launching into new markets. new geographic regions.