Adore Beauty (ASX:ABY) share price up 4% on Q1 update

Adore Beauty had a strong first quarter…

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The Adore Beauty Group Ltd (ASX: ABY) share price is on the move on Thursday morning.

At the time of writing, the online beauty retailer's shares are up 4% to $5.15.

Why is the Adore Beauty share price rising?

Investors have been bidding the Adore Beauty share price higher on Thursday following the release of a trading update.

That update reveals that the company has started the new financial year in a very positive fashion and has delivered strong first quarter growth in revenue and customer numbers.

According to the release, Adore Beauty reported a 25% increase in revenue to $63.8 million during the first quarter. This was underpinned by a 24% jump in active customers to 874,000 and returning customer growth of 63%.

Management advised that it continues to benefit from the ongoing structural shift to online, which has been further accelerated by the recent COVID-19 lockdowns. This is supporting Adore Beauty as it executes on its growth strategy to cement its online market leadership, scale its native mobile app, grow its loyalty program, and expand its product range.

Management commentary

Adore Beauty's CEO, Tennealle O'Shannessy, was pleased with the strong start to the new financial year.

She said: "Adore Beauty has continued to deliver strong growth in sales revenue, active customers and returning customer numbers during the quarter. Over the last 12 months our loyal returning customers grew 63 per cent, providing a strong foundation for future growth. Our returning customers become more valuable each year they spend on the platform, increasing both their basket size and order frequency over time."

"We continue to leverage our content strategy to drive brand awareness and discovery, and we are reinvesting in the business to accelerate our growth trajectory within a large and growing $11 billion market. It has been a pleasing start to FY22 and we look forward to continuing to execute on the exciting initiatives that will see Adore cement our online market leadership in the beauty category," she added.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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