The Adore Beauty Group Ltd (ASX: ABY) share price is rocketing higher following the release of its half year results.
At the time of writing, the online beauty products retailer's shares are up 11% to $6.33.
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How did Adore Beauty perform in the first half?
As you might have guessed from the Adore Beauty share price reaction today, the company performed very positively during the half.
For the six months ended 31 December, the company delivered revenue of $96.2 million. This was an increase of 85% on the prior corresponding period and 8% ahead of its prospectus forecast of $89 million.
Management advised that this was driven by strong customer growth and continued high customer retention. At the end of the period, Adore Beauty had 777,000 active customers on its platform, up 82% since this time last year.
Also heading in the right direction was its gross profit margin. It came in at 32.5% for the half, which was up 1.4 percentage points on the prior corresponding period. This was underpinned by product margin expansion.
Positively, this margin expansion led to Adore Beauty reporting a 188% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $5.2 million. This was also 58% ahead of its prospectus forecast of $3.3 million.
Finally, on the bottom line, the company recorded a half year net profit after tax of $2.54 million. This compares to a loss of $3.18 million during the same period last year.
At the end of the period, Adore Beauty had a cash balance of $25.9 million and no debt.
Management commentary
Adore Beauty's CEO, Tennealle O'Shannessy, was very pleased with the company's first half performance.
She said "Adore Beauty is Australia's market leader in online beauty retail. Our strong performance this half is underpinned by high levels of customer engagement, retention and satisfaction, and includes a record trading day of $1.5m."
"We have been thrilled to welcome many new customers to our platform over the last six months and are pleased to continue to be the online beauty shopping destination for our loyal customers," O'Shannessy added.
Outlook
While no guidance was given for the full year, Tennealle O'Shannessy remains very positive on its prospects.
She said: "Looking forward, we are executing a clear strategy to cement our online market leadership position, and we are well positioned to capture market share in a large and growing market benefitting from structural tailwinds."
And while the company has benefitted greatly from the pandemic pushing shoppers online, positively, it believes it can still thrive even when COVID-19 passes.
Management explained: "As COVID-19 related restrictions ease we expect to deliver full year FY21 revenue growth above pre-COVID levels given the continued structural shift to online and strong retention of new customers acquired over the peak COVID period."
"We are executing a clear strategy to cement our online market leadership position, and we are well positioned to capture market share in a large and growing market benefitting from structural tailwinds. As the business grows, we expect scale benefits to increase operating leverage and deliver further EBITDA margin expansion," it concluded.
Despite this strong form, the Adore Beauty share price is still trading lower than its IPO price of $6.75.
