Hipages Group Holdings Ltd (ASX: HPG)

The share price of trade sales lead generator, Hipages, has dropped almost 20% over the last year to $0.84 at market close on Tuesday. Its primary service is connecting customers to tradespeople, a business that can be sensitive to interest rate hikes and weakened consumer spending. This might be driving some of the subdued investor sentiment. Also, it does not have a strong defensive moat with some investors concerned that it may be swamped by AI or generalist marketplaces.

But this is a business with strong underlying fundamentals. Even though revenue growth slowed in the first half of 2026, it has expanded its EBITDA margin, showing good operating leverage and discipline. A strong balance sheet with significant cash holdings further de-risks the investment.

Despite potential consumer spending concerns, Australians spent some $53.8 billion on renovations in FY25, the highest spend since 2022, suggesting the market for trades remains strong. Ongoing trade shortages may also fuel consumer demand for some time to come. The key for Hipages will be ensuring that it can continue to attract quality tradespeople in this climate. 

For me, at current prices, Hipages is a real contender. It's a quality business with a good balance sheet in a market where demand continues to grow.

OFX Group Ltd (ASX: OFX)

Australian international payments provider, OFX, has seen share price falls of more than 50% over the last year, closing at $0.58 on Tuesday. Investors had high expectations of this business a few years ago and although its results have been relatively solid, it seems investors have been wanting more. Weakening sentiment across the broader tech sector may also be driving the drop.

OFX is a profitable business with low debt and a global customer network, spanning APAC, North America, Europe and the Middle East. In its last full year results, it reported a 5.5% decline in net operating income and its growth has slowed of late, but its scalable business model remains attractive.

In early February 2026, it announced a strategic review, which could include a potential sale, with management reiterating it believes the business to be undervalued at the current share price.

And I tend to agree. Despite some decline in recent results, OFX has been performing in the longer term and has several potential avenues for growth. It's clearly at a crossroads and the outcome of the strategic review will be interesting, but I think now is the time to move for investors seeking a bargain.

Adore Beauty Group Ltd (ASX: ABY)

Specialty beauty e-commerce and retailer, Adore Beauty has had a tough ride on the share market, dropping some 50% in the last 12 months to $0.42 at market close on Tuesday. However, it continues to deliver positive, if small, revenue growth. That said, net profit has declined sharply (69.9%), which is likely why investor sentiment continues to weaken.

However, at current prices, I think it's worth considering because its revenue is rising, its brand equity is intact, and there are some positive indicators amongst the challenges:

• It has an established brand that has shown it can ride out challenging market conditions
• It's underlying EBITDA for HY26 was up 14.5% on the prior corresponding period, meaning it can generate operating leverage
• Customer growth remains solid
• It appears to be demonstrating disciplined inventory management, critical in such a fast-moving category

It's also worth noting that its profitability decline is likely largely driven by the step up in its omni-channel rollout, with the group opening 10 new stores since July.

This one might be a little more speculative and it's certainly a turnaround play — it will need to recover its margins. But if you are looking for something with hidden potential at the bargain end of the market, Adore Beauty is one to consider.

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The company said in a statement to the ASX on Tuesday that it had posted record underlying EBITDA of $4.1 million for the first half of the year, up 14.5% on the prior corresponding period.

In a separate release, however, the company says net profit was down 69.9% to $189,000, while sales increased markedly, from $102.9 million to $111.9 million.

Investors clearly didn't like the numbers, pushing Adore Beauty shares 23.3% lower to 66 cents, not far off their 12-month lows of 61 cents.

Management positive on the outlook

Chief Executive Officer Sacha Laing said regarding the result:

Adore Beauty has achieved a strong financial result in the first half of FY26, benefitting from our maturing customer-led strategy. We cost-effectively acquired new customers at the fastest rate in four years whilst halving acquisition costs with record levels of marketing efficiency. Importantly, operating leverage, growing owned brands, and disciplined cost management delivered record earnings despite margin pressures arising from exceptionally strong Black Friday period sales. We stepped-up our omni-channel rollout during the half, opening 10 stores since July with a further six in the pipeline for the remainder of CY2026. While more than half of these stores opened in the final months of CY2025, we are already seeing the benefit of our retail network on customer acquisition and brand awareness.

Ms Laing said while retail conditions remained challenging, "improving quality of revenue remains a priority for the business, as we continue to acquire more customers at the top of the funnel, reduce our promotional cadence, increase share-of-wallet, and grow our higher-margin iKOU brand''.

The company said it had opened its first stores in both Queensland and South Australia during the first half, with all of the new stores expected to reach maturity in 12-18 months, and make a meaningful contribution to the business from the second year of operation.

The group's loyalty program now has 509,000 members, contributing 78% of sales in the first half, Adore said.

The company said regarding this:

'Adore Rewards' is structured to reward frequent and repeat purchasing behaviour, increasing engagement and share-of-wallet while supporting marketing efficiency. The Adore Beauty app is another driver of marketing efficiency, accounting for 35% of online sales during the period, up from 25% for the same period last year. The strong performance of loyalty and app continues to improve quality of revenue, offsetting the reduction in promotional cadence.

The company also said it had secured a lease for a new major national fulfilment centre, which would unlock material operating efficiencies from the second half of FY27.

Adore Beauty was valued at $80.8 million at the close of trade on Monday.

The post Despite a "strong" financial result, this retailer is being sold down heavily appeared first on The Motley Fool Australia.

Fast-moving cycles pose a challenge in the sector

Social media, particularly TikTok, has proved a phenomenon for beauty retailers, moving consumers from discovery to purchase in record time. And while this can be a tailwind, it can also lead to short-term aggressive cycles that put pressure on retailers.

They must respond lightning fast to meet demand, making quick inventory decisions that can make or break. Understocking can lead to lost revenue and impact the retailer's position in a customer's consideration set. Overstocking can be a pathway to carrying costs, markdowns, and wastage.

Short-cycle social media trends can be hard to predict. They may be based around a specific beauty ingredient, a whole category, or focused on one individual brand, making stock decisions even more complex.

How has Adore Beauty responded so far?

A few years ago, Adore Beauty made investments in AI-driven supply chain management technology to better manage these cycles. That foresight may well have paid off, with the company reporting strong results in FY25, including:

• Record gross margin of 35.3%
• EBITDA of $8.1 million, up 67.8% on the prior corresponding period (PCP)
• Revenue of $198.8 million, up 1.6% on PCP
• New customer growth up 4.9%
• A cash balance of $12.7 million with no debt

In FY25, it also made a move into brick-and-mortar retail. This saw the opening of seven new retail stores, with a reported goal of opening more than 25 stores across its Adore Beauty and IKOU brands.

While many sectors are moving away from physical retail and its heavy cost base, in many ways, it makes sense for Adore Beauty. This play allows it to compete with prominent local beauty retailer Mecca and international powerhouse Sephora by offering similar interactive in-person experiences.

In the last year, Adore Beauty demonstrated that it could perform under these challenging conditions. But as TikTok continues to compress and intensify demand cycles, it will need to remain vigilant and maintain its firm commitment to robust inventory management.

Is Adore Beauty a buy?

Adore Beauty has been on a wild ride since it listed on the ASX in 2020 with an IPO price of $6.75. Over the last five years, its share price has fallen by over 80%.

That said, it has made positive progress recently, and if it executes on its ambitious retail strategy, it could see impressive gains over the next few years. With the company set to release H1 FY26 results on 24 February, it will be interesting to see if its upward trajectory has continued thus far.

It's definitely one to watch in 2026. For investors with a higher risk tolerance, it may be worth considering now, as I believe it is undervalued at current prices.

The post From viral hit to margin threat: Is inventory a growing risk for Adore Beauty? appeared first on The Motley Fool Australia.

Here are some ASX All Ords shares that attracted strong buy consensus ratings on the CommSec platform this month.

9 ASX All Ords shares with strong buy ratings for 2026

A consensus rating is the average rating from all analysts covering a stock.

Vault Minerals Ltd (ASX: VAU)

The Vault Minerals share price is currently $5.47, up 1% on Wednesday.

The ASX All Ords gold share has risen 154% in 2025.

Like all ASX All Ords gold stocks, Vault Minerals has benefited from the runaway gold price.

The yellow metal has ripped 66% higher in 2025 and is currently trading at US$4,354 per ounce.

UBS is among the brokers giving Vault Minerals shares a buy rating.

The broker's 12-month price target is $6.60.

Orica Ltd (ASX: ORI) 

The Orica share price is $24.34, down 0.5% on Wednesday.

The explosives manufacturer has experienced 47% share price growth in 2025.

RBC Capital Markets is one of the brokers giving this stock an outperform rating.

Its 12-month price target for Orica shares is $27.50.

Qantas Airways Ltd (ASX: QAN) 

The Qantas share price is $10.30, down 0.1%.

The market's largest ASX All Ords airline share has lifted 13% in 2025.

Here are the important dates for Qantas shareholders in the new year.

NextDC Ltd (ASX: NXT)

The NextDC share price is $12.45 on Wednesday, down 0.2%.

This ASX All Ords technology share is down 17% for 2025.

Jefferies is among the brokers backing NextDC shares for growth in 2026.

The broker's 12-month price target is $18.10.

Westgold Resources Ltd (ASX: WGX) 

The Westgold Resources share price is $6.41, up 0.5% today.

The ASX All Ords gold share has lifted 122% in 2025.

RBC Capital Markets is among the experts giving this stock a buy rating.

The broker lifted its 12-month price target from $5.80 to $7.80 this month.

Wisetech Global Ltd (ASX: WTC)

The Wisetech share price is $68.21, up 0.6% on Wednesday.

The tech sector's No.1 stock by market capitalisation has had a turbulent year.

Overall, Wisetech shares are down 45% in the year to date.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty shares are trading at $1.24 apiece, up 2% on Wednesday.

The ASX All Ords consumer discretionary share has ripped 32% in 2025.

Cleanaway Waste Management Ltd (ASX: CWY)

The Cleanaway Waste Management share price is $2.62, up 0.2%.

The ASX All Ords industrial share is down 1% in the year to date.

Goldman Sachs is buy-rated on this stock with a price target of $3.15.

Silex Systems Ltd (ASX: SLX)

The Silex Systems share price is $8.51, up 2.4% today.

The ASX All Ords industrials share is up 67% for 2025.

The nuclear technology developer ascended into the S&P/ASX 200 Index (ASX: XJO) in the December rebalance.

Shaw & Partners is among the brokers giving this stock a buy rating.

The broker has a 12-month price target of $11.20 on Silex Systems shares.

The post 9 ASX All Ords shares upgraded to strong buy ratings for the new year appeared first on The Motley Fool Australia.

Bell Potter has had a look at the big names in the sector and says while not all retailers are created equal, three in particular stand out as good buying at current levels.

Overall, the Bell Potter teams said retail has been "choppy as we've seen varying performance between discretionary categories with technology/electronics, wellness and sports and services such as cafes and recreation leading the suite while others such as mass apparel and lifestyle footwear and furniture and household goods lagging''.

They went on to say:

Looking ahead, while the pause in interest rate cuts in Australia limits catalysts for the consumer discretionary sector, we continue to prefer key beneficiaries from the rate cuts seen so far and category outperformers. We continue to look for retailers with differentiating customer value propositions and balance sheet strength and support names who may grow via market share expansion with more diverse customer demographics and category exposures.

So now, on to their retail stock picks for December.

Universal Store Holdings Ltd (ASX: UNI)

The Bell Potter team says Universal is a leading youth-focused streetwear retailer with 100 stores under its Universal Store flagship brand, as well as private label brands Perfect Stranger and Thrills.

With a price-to-earnings (P/E) ratio of about 18 times, the Bell Potter team says the company is trading at a discount to its S&P/ASX 300 Index (ASX: XKO) peer group "and see the multiple justified by the distinctive growth traits supporting consistent outperformance in a challenging broader category''.

There is a longer term opportunity with three brands to grow margins organically via private label product penetration, and Universal is expected to benefit as youth consumers prioritise on-trend streetwear.

Bell Potter has a price target of $10.50 on Universal Store Holdings compared with the current price of $7.99.

Harvey Norman Holdings Ltd (ASX: HVN)

Bell Potter says Harvey Norman is the most diversified retailer in terms of category exposure and regional presence, "while benefitting from both as a quasi-retailer/landlord and channel mix via company operated stores and franchising''.

Bell Potter has a price target of $8.30 on Harvey Norman shares compared with $7.06 currently, and said the current P/E ratio was justified considering "multiple catalysts" for growth in the near and mid-term.

Adore Beauty Group Ltd (ASX: ABY)

The Bell Potter team said Adore is an "omni-channel retailer" selling more than 15,000 third party products from more than 360 brands as well as its own private label brands.

The Bell Potter team said:

Key drivers for business growth are its continued store-rollout targeting a network of 25+ stores, along with its private label brands and high-margin retail media arm contributing to margin expansion and thus a strong earnings trajectory. We view ABY as well positioned to take advantage of the high performing beauty category within the Australian market.

Bell Potter has a price target of $1.25 on Adore Beauty shares compared with $1.20 currently.

The post Bell Potter names three retail stock picks for your Christmas hamper appeared first on The Motley Fool Australia.

That's because Bell Potter has just named them as its top picks in the sector. Here's what it is recommending to clients:

Adore Beauty Group Ltd (ASX: ABY)

The beauty retailer has caught the eye of Bell Potter due to its strong rollout and private label expansion, which is supporting margin improvements. Overall, it believes this leaves the ASX retail stock well-placed in the Australian beauty category. It said:

Key drivers for business growth are its continued store-rollout targeting a network of 25+ stores, along with its private label brands and high-margin retail media arm contributing to margin expansion and thus a strong earnings trajectory. We view ABY as well positioned to take advantage of the high performing beauty category within the Australian market.

Bell Potter has a buy rating and $1.25 price target on its shares.

Harvey Norman Holdings Ltd (ASX: HVN)

This retail giant's shares could be a buy according to Bell Potter despite rising strongly this year. It believes Harvey Norman's shares are undervalued based on its positive growth outlook. The broker explains:

Despite the strong re-rate in the name, HVN trades at ~2.0x market capitalisation to freehold property value as Australia's single largest owner in large format retail with a global portfolio surpassing $4.5b and collectively owning ~40% of their stores (franchised in Australia and company operated offshore). This sees our view that of the 1-year forward ~19x P/E multiple as justified considering the multiple catalysts near/mid-term.

Bell Potter currently has a buy rating and $8.30 price target on its shares.

Universal Store Holdings Ltd (ASX: UNI)

Finally, at just 18x estimated FY 2026 earnings, Bell Potter thinks that youth fashion retailer Universal Store could be an ASX retail stock to buy.

It believes the company is well-placed for growth given its store expansion plans and increasing private label penetration. The broker said:

At ~18x FY26e P/E (BPe), we see UNI trading at a discount to the ASX300 peer group and see the multiple justified by the distinctive growth traits supporting consistent outperformance in a challenging broader category, longer term opportunity with three brands, organic gross margin expansion via private label product penetration (currently ~55%) and management execution. We continue to see the youth customer prioritising on-trend streetwear and expect UNI to benefit with their leading position.

Bell Potter has a buy rating and $10.50 price target on its shares.

The post Bell Potter names the best ASX retail stocks to buy appeared first on The Motley Fool Australia.

Despite economists now tipping an increase for the cash rate at this month's RBA meeting, Bell Potter still sees opportunity for a few consumer discretionary shares. 

Sector overview

In the broker's Monthly Bell report, the analyst team said they have seen varying performance recently between discretionary categories with technology/electronics, wellness & sports and services such as cafes & recreation leading the way.

Meanwhile others such as mass apparel & lifestyle footwear and furniture & household goods are lagging.

While the pause in interest rate cuts in Australia limits catalysts for the Consumer Discretionary sector, we continue to prefer key beneficiaries from the rate cuts seen so far and category outperformers. We continue to look for retailers with differentiating customer value propositions & balance sheet strength and support names who may grow via market share expansion with more diverse customer demographics.

The report said to expect another year of growth in the promotional period around Black Friday. Beneficiaries are expected to be technology products, household appliances and gifting driven purchases. 

The 2025 projections for the Black Friday seasonal period in Australia (as per Roy Morgan and Australian Retailers Association) sees a further 4% increase in the 4-day weekend retail spend compared to a 3% increase in 2024.

The broker listed three high conviction consumer discretionary with buy recommendations. 

Adore Beauty Group Ltd (ASX: ABY)

Bell Potter said key drivers for business growth are its continued store-rollout targeting a network of 25+ stores, along with its private label brands and high-margin retail media arm contributing to margin expansion and thus a strong earnings trajectory. 

It views this consumer discretionary stock as well positioned to take advantage of the high performing beauty category within the Australian market.

Target price: $1.25. 

Harvey Norman Holdings Ltd (ASX: HVN)

As a leading household goods retailer in Australia and growing presence globally, Bell Potter said Harvey Norman has seen modest growth in its independent franchisee base in Australia and expanded its company operated global store print over the last 5 years. 

It sees Harvey Norman as one of the most diversified retailers in terms of both categories and regions, while benefitting from both as a quasi-retailer/landlord and channel mix via company operated stores and franchising.

Target price: $8.30. 

Universal Store Holdings Ltd (ASX: UNI)

The company has ~85 stores under its flagship 'Universal Store' brand and is expanding private label brands by growing the stand-alone format of 'Perfect Stranger' and 'Thrills' with more than 100 stores in total.

Bell Potter said at ~18x FY26e P/E (BPe), it sees Universal Store shares as trading at a discount to the ASX300 peer group. Its optimism is justified by the distinctive growth traits supporting consistent outperformance in a challenging category, longer term opportunity with three brands, organic gross margin expansion via private label product penetration (currently ~55%) and management execution.

Target price: $10.50.

The post 3 top consumer discretionary shares from Bell Potter appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising:

Adore Beauty Group Ltd (ASX: ABY)

The Adore Beauty share price is up 4.5% to $1.05. This has been driven by the release of a bullish broker note out of Bell Potter this morning. According to the note, the broker has upgraded the beauty retailer's shares to a buy rating with a $1.25 price target. Commenting on the upgrade, Bell Potter said: "We upgrade to a Buy recommendation following ABY trading at a far more attractive FY26e EV/EBIT multiple (~15x BPe numbers), with the stock having pulled back ~17% since initiating at 17-Sep, as well as the expectation of a positive trading update at the AGM on 21-Nov."

Iress Ltd (ASX: IRE)

The Iress share price is up 4.5% to $8.79. Investors have been buying this financial technology company's shares after it revealed further takeover interest. In an announcement before the market open, it advised that a number of parties are running the rule over the company. It stated: "To facilitate this engagement, Iress has, since the time of its previous update, made a virtual data room available to a number of additional parties under appropriate confidentiality agreements. The basis for engagement is that bidders are restricted from contacting certain former management (without Iress' consent)."

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price is up a further 3% to $12.52. This online lottery ticket seller's shares have raced higher this week thanks to the announcement of a major acquisition. The team at Morgans has responded positively to the news. Yesterday its analysts upgraded Jumbo's shares to a buy rating with an improved price target of $15.90. The broker said: "The acquisition bridges the potential earnings gap from non-TLC revenue streams and accelerates JIN's strategic shift from slower-growing international B2B operations toward higher-margin B2C opportunities."

Newmont Corporation (ASX: NEM)

The Newmont Corporation share price is up 4% to $151.59. Investors have been buying Newmont shares after the spot gold price raced higher yet again overnight. It isn't just Newmont that is rising today. Most gold miners are rising in response to the news. This has led to the S&P/ASX All Ordinaries Gold index climbing 1.8% at the time of writing.

The post Why Adore Beauty, Iress, Jumbo, and Newmont shares are storming higher today appeared first on The Motley Fool Australia.

Adore Beauty Group Ltd (ASX: ABY) is an Australian online beauty, cosmetics, and personal care retailer.

Its online platform currently sells more than 260 leading beauty brands, including Clarins, Estee Lauder, The Ordinary, Dermalogica, and ghd. In late 2022, the company launched its own private-label, AB Labs sunscreen range.

The small-cap stock has seen some volatility in its stock price this year, but remains up almost 7% in 2025. 

Bell Potter released fresh guidance on the consumer discretionary stock yesterday. 

Earnings remain intact

The broker has made no changes to its earnings forecasts. 

The broker said in FY26 it continues to forecast revenue of $225.4m (~13% growth) and EBITDA of $12.1m (~50% growth). 

It views the recent store rollout momentum as extremely positive and sees the mix of the 10 store contribution and positive web traffic data as catalysts for a positive 1Q FY26 trading update at the November AGM.

Bell Potter said the store rollout was progressing well with +5 Adore banners and +1 iKOU banner opened in 1H26, approaching the 15 store network guidance (13-to-date) outlined in ABY's FY25 results. 

Its price target has remained unchanged at $1.25. However, it now lists the stock as a buy due to its recent stock price fall of almost 17% over the last month.

Upgraded recommendation from Bell Potter

The broker said given the solid FY26e earnings growth profile (+50%) and future margin accretion, and the new strategy performing to plan, it remains positive.

We upgrade to a Buy recommendation following ABY trading at a far more attractive FY26e EV/EBIT multiple (~15x BPe numbers), with the stock having pulled back ~17% since initiating at 17-Sep, as well as the expectation of a positive trading update at the AGM on 21-Nov.

Its price target remains unchanged at $1.25.

Based on the broker's price target of $1.25, it expects an upside of 23.76% from yesterday's closing price of $1.01. 

Key risks to the investment thesis include reliance on third-party brands whose performance directly affects the company's success. Additionally, increasing competitive pressures from pricing and product range as the online market matures, which could impact sales and margins.

The post This ASX consumer discretionary stock is set to rise 20%! appeared first on The Motley Fool Australia.

After being up as much as 5%, the ASX growth stock is on course to end the day flat.

This follows the release of the online (and now offline) beauty retailer's half year results.

ASX growth stock flat on results day

• Revenue up 2.3% to $103 million
• Gross margin up 270 basis points to 36.2%,
• EBITDA up 98% to $4.7 million (EBITDA margin of 4.5%)
• EBIT up 126% to $2.8 million
• Cash Balance of $11.7 million with no debt
• Outlook: EBITDA margin guidance of 4%-5%, EBIT margin guidance of 2%-3% reaffirmed

What happened during the half?

Adore Beauty reported a strong half year result on Monday, delivering a significant lift in earnings as its new three-year strategy starts to show promise.

For the six months ended 31 December, the company revealed a 2.3% increase in revenue to $103 million. This was driven partly by a 20% increase in Adore Beauty's contactable customer database to 1.26 million.

The ASX growth stock reported EBITDA of $4.7 million for the half, which is a whopping 98% increase on the prior corresponding period. EBIT surged by 126% to $2.8 million, which management advised reflects disciplined cost management and higher-margin revenue streams.

Expanding offline

The company recently launched its first physical retail store at Westfield Southland in Victoria, with another opening in March at Watergardens. It plans to roll out up to six more stores in 2025, expanding into Western Australia, New South Wales, and Queensland.

iKOU, its premium skincare brand, will also grow its retail footprint, with a flagship Melbourne store opening in April.

This is all part of the company's plan to deliver strong revenue growth and higher margins. Adore Beauty is targeting 30% revenue growth and a doubling of EBIT margins over three years.

In the near term, despite macroeconomic challenges, management remains confident in its outlook and has reaffirmed its FY 2025 EBITDA margin guidance of 4% to 5% and EBIT margin guidance of 2% to 3%.

Management commentary

The ASX growth stock's CEO, Sacha Laing, was pleased with the company's performance. He said:

Our half-year results demonstrate the strength of the Adore Beauty brand and the early momentum of our strategy refresh focusing in the near-term on enhancing quality of earnings and optimising our operating model. I am delighted with the demonstrated gains in gross margin which delivered material improvement and the subsequent 126% growth in EBIT in the half. This is just the start for us as we accelerate the execution of our strategic levers, including the opening of additional retail stores across Australia.

The post This ASX growth stock just reported a 126% jump in half year earnings appeared first on The Motley Fool Australia.

Adore Beauty has decided to give investors an early update about its performance in the six months to 31 December 2024, which saw "strong early momentum" of its strategy refresh, according to the company.

The online retailer of beauty products said it achieved strong profitability after improving the quality of its revenue and underlying profitability. Let's get into the numbers.

Strong start to FY25

Adore Beauty revealed that its revenue increased by 2.3% to $103 million despite the challenging wider macroeconomic conditions.

The e-commerce company achieved a record gross profit margin of 35.9%, an improvement of 240 basis points (2.40%) compared to the first half of FY24.

Growth of revenue and the gross profit margin helped operating profit (EBITDA) soar by 94% year over year to $4.6 million. The EBITDA margin achieved was 4.4%. The EBITDA figures exclude restructuring and acquisition costs.

The EBITDA growth and operating leverage of the business meant that EBIT jumped 118% to $2.7 million.

Adore Beauty reported that it finished December 2024 with a cash balance of $11.7 million.

How did the ASX retail stock achieve this profit growth?

The online beauty business explained that the performance was driven by the implementation of key initiatives in its three-year strategy, which focuses on near-term material profit growth.

Adore Beauty said it's improving earnings through disciplined execution of promotional events, accelerated growth of owned brands, increased contribution from margin-boosting retail media, and focusing on operating costs and working capital efficiencies.

Physical stores

The company noted that it will open its first physical retail store this weekend, on Saturday, 1 February, at Westfield Southland in Victoria, and a second store in Watergardens in Victoria in early March.  

In line with its strategy of growing its owned brands through the retail channel in new geographic regions, it will open new iKOU branded stores in Berry (NSW) and the Melbourne CBD (Victoria) in March.

It's planning to open between four to six new stores in the 2025 calendar year.

CEO comments

The CEO of Adore Beauty, Sacha Laing, said:

Our first half result demonstrates the effectiveness of the early phases of our strategy refresh to improve Adore Beauty Group's quality of earnings and long-term profitability as we evolve over the next three years into a leading omni-channel beauty retailer. Our plans to open 25+ physical stores are on track and will deliver a material step change in our revenue growth and profitability metrics.

Adore Beauty share price snapshot

In the last six months, Adore Beauty shares are down by around 3%.

The post ASX retail stock rallies on 94% earnings boost appeared first on The Motley Fool Australia.

The high cost of living and elevated inflation may have cut into households' discretionary spending capabilities. Despite that, some ASX retail shares have seen sales increase in the first few weeks of FY25.

That doesn't necessarily mean these businesses will see sales growth for the rest of the year, but it's a promising start for FY25 and could be a useful indicator in the lead-up to the important retail sales events in November and Christmas.

Let's look at what some companies reported as FY25 trading updates.

FY25 sales progress

Homewares and furniture online retailer Temple & Webster Group Ltd (ASX: TPW) reported revenue of 26% from 1 July to 11 August 2024.

Premium youth apparel retailer Universal Store Holdings Ltd (ASX: UNI) reported that its Universal Store business saw sales growth of 15.3% in the first seven weeks of FY25, with Perfect Stranger sales growth of 89.9%.

In the first eight weeks of FY25, home fragrance retailer Dusk Group Ltd (ASX: DSK) disclosed total sales growth of 16% year over year (from a low base).

Auto parts retailer and mechanic business Bapcor Ltd (ASX: BAP) revealed that sales had increased 7.7% in the first five weeks of FY25.

Online beauty product retailer Adore Beauty Group Ltd (ASX: ABY) reported that its revenue increased 7% year over year in the first seven weeks of FY25.

The electronics ASX retail share JB Hi-Fi Ltd (ASX: JBH) revealed that its JB Hi-Fi Australia division achieved total sales growth of 5.6% year over year.

Of course, not every business is growing. There are a few ASX shares that reported sales declines at the start of FY25.

Furniture retailer Nick Scali Limited (ASX: NCK) revealed that its written sales orders were down 1.2% year over year in June and July.

Domino's Pizza Enterprises Ltd (ASX: DMP) reported that its same-store sales were down 1.3% in the first few weeks of FY25.

Expert commentary on the ASX retail share sector

Writing on LinkedIn, MST Marquee senior analyst of the consumer sector Craig Woolford said retailers generally had an "upbeat tone" about the outlook, though not all businesses were seeing an acceleration of sales growth.

Woolford said:

Those with businesses in New Zealand and in liquor have generally seen more sluggish trends. Quick service restaurants are also slowing too. The tilt towards better sales trends is a sign of things to come for Australian retail.

However, it won't be evenly distributed as we return to more normal conditions where great product, price and service differentiate the best performers.

In my opinion, investors may be able to find some opportunities in the ASX retail space, but volatility in valuations and sales performance could continue.

The post Which ASX retail shares are overcoming the slowdown in FY25? appeared first on The Motley Fool Australia.

Shares in the online beauty and cosmetics retailer closed on Friday at $1.10. At the time of writing, in late morning trade on Monday, shares are changing hands for $1.18 apiece, up 7.3%.

Any guesses?

If you said Adore Beauty Group Ltd (ASX: ABY), go to the head of the virtual class.

Today's outperformance comes following the release of Adore Beauty's financial results for the 12 months ended 30 June (FY 2024).

Read on for the highlights.

Adore Beauty share price leaps on earnings boost

• Revenue of $195.7 million, up 7.4% from FY 2023
• Reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of $4.8 million, up 661% year on year
• EBITDA margin of 2.5%, in line with guidance
• No debt with a cash balance of $32.9 million as at 30 June, up 18.3% from last year

What else happened with the ASX All Ords stock during the year?

Investors are snapping up Adore Beauty shares today with the company achieving growth across most core metrics.

The ASX All Ords stock reported a 5.8% year on year increase in returning customers, reaching a new record of 519,000. These returning customers accounted for 79% of FY 204 product sales.

Active customer numbers were also on the rise, increasing by 1.6%, or 814,000 over the 12 months.

Customer retention also notched a new record figure at 64.7%. The ASX All Ords stock credited the improved customer retention figures to the 8.6% growth in its loyalty members over the year. Adore's mobile app adoption soared 48.6% over the financial year and now represents 28.4% of sales.

And Adore Beauty's investments in brand and above the line marketing activity looks to have paid off. The company reported that brand awareness in its core demographic group improved to a record 71%, up from 62% for the same period last year.

What did management say?

Commenting on the results sending the ASX All Ords stock charging higher today, outgoing CEO Tamalin Morton said:

Adore Beauty's loyal, returning customer base continues to underpin our revenue growth, contributing almost 80% of all product sales and driving improvements in basket sizes and annual spend per active customer…

Alongside revenue growth, operational efficiency and operating leverage have improved profitability. Our marketing has been more effective – with expenditure down 3% on last year, whilst our sales, customer base and brand awareness have all grown.

We've also developed the retail media arm of our business, which represented circa $4 million in revenue in FY 2024.

Morton added that Adore Beauty is "continuing to expand our product range, now with over 300 brands, to ensure we have a compelling beauty and wellness proposition for our customers."

What's next for the ASX All Ords stock?

Looking at what could impact the ASX All Ords stock in the year ahead, the company said it's off to a strong start, with revenue in the first seven weeks of FY 2025 up 7.0% compared to the same period in FY 2024.

While cautioning that conditions are expected to remain challenging, management said, "Adore Beauty's clear growth strategy ensures it is well positioned to increase revenue, active customers, market share and profitability."

The company is targeting an EBITDA margin of 4% to 5% in FY 2025, compared to the 2.5% achieved in FY 2024.

New CEO Sacha Laing takes over the reins on 1 October.

Adore Beauty share price snapshot

With today's Adore Beauty share price boost factored in, the ASX All Ords stock is up 16% over 12 months.

The post Guess which ASX All Ords stock just leapt 7% on surging earnings? appeared first on The Motley Fool Australia.

Shares in the online beauty retailer closed on Friday trading for 93 cents. In morning trade on Monday, shares are swapping hands for 90.5 cents apiece, down 2.4%.

For some context, the All Ordinaries Index (ASX: XAO) is up 0.8% at this same time.

That's today's early price action for you.

Now, whether you already own Adore Beauty shares or are maybe looking to buy them, the company is about to take on a new top leader.

Online beauty retailer takes aboard new CEO

Adore Beauty shares have yet to get a lift from the company's announcement that Sacha Laing will take over as CEO commencing on 1 October.

Laing is replacing current CEO Tamalin Morton, who will step down from the role on 27 September.

Described as a "highly experienced omni-channel retail executive", Laing was previously CEO of Alquemie Group, a premium omnichannel retail group that owns and operates retail brands including Lego Certified Stores and Surfstitch.

Before that he was CEO of General Pants and CEO of Colette by Colette Hayman. Laing held other executive positions before that at both Country Road and David Jones.

Commenting on Laing's appointment, Adore Beauty chair Marina Go said, "Sacha's extensive retail and omnichannel experience aligns with our strategic initiatives and will be invaluable in driving Adore Beauty's future growth."

Go added:

He is an accomplished retail leader and brand manager, with significant experience across e-commerce, retail operations, private label development, product management, loyalty, as well as marketing and communications strategy.

Sacha's appointment further strengthens our leadership team, and ensures we are well-positioned to grow revenue and market share.

Laing in turn said he was "delighted" to be spearheading Adore Beauty shares during "its next chapter of growth".

According to Laing:

Adore Beauty has a well-established and significant loyal customer base underpinned by its core brand purpose to encourage and enable current and future consumers to step out every day with confidence.

We will continue to focus on accelerating our strategic growth pillars, including stand-alone Adore Beauty physical stores, further expansion of our own private label brands, and the integration and expansion of the iKOU business, expected to complete later this month.

How have Adore Beauty shares been tracking?

Investors will be hoping that Laing can help turn things around for Adore Beauty shares, which are down around 30% so far in 2024.

The beauty retailer first listed on the ASX on 23 October 2020 at an initial public offering (IPO) price of $6.75.

The post Buying Adore Beauty shares? Meet your new CEO appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back today are listed below. Here's why they are rising:

Adore Beauty Group Ltd (ASX: ABY)

The Adore Beauty share price is up 5% to 91 cents. This has been driven by the release of a trading update from the online beauty retailer this morning. The company advised that it achieved unaudited revenue of $195.7 million in FY 2024. This represents a 7.4% increase on the prior corresponding period, which management believes is a strong result in a challenging retail environment. It also advised that its FY 2024 EBITDA margin is expected to be between 2.2% to 2.5%. This would mean EBITDA in the range of approximately $4.3 million to $4.9 million.

Domino's Pizza Enterprises Ltd (ASX: DMP)

The Domino's share price is up 2% to $33.77. This appears to have been driven by the release of a bullish broker note out of Goldman Sachs this morning. According to the note, the broker was pleased to see that management is now re-prioritising store unit economics over store growth. As a result, it has upgraded the pizza chain operator's shares to a buy rating with an improved price target of $42.20 (from $36.30). Goldman suggests that "refocusing on store unit economics to restart virtuous growth cycle."

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 7% to $1.85. Investors have been buying the counter drone technology company's shares today despite there being no news out of it. However, with the company's shares crashing heavily this week on valuation concerns, it is possible that some investors believe that they have now reached a fair value again and have been jumping back in. Despite today's gain, DroneShield's shares are still down over 30% from their highest point this week. Though, they are also still up almost 400% since this time last year.

Universal Store Holdings Ltd (ASX: UNI)

The Universal Store share price is up 6% to $5.79. This has been driven by the release of a trading update from the youth fashion retailer this morning. According to the release, Universal Store finished the financial year strongly. As a result, it expects to report group sales growth of 9.7% to $288.5 million in FY 2024. Underlying EBIT is expected to be in the range of $46 million to $47 million, which is up 13.9% to 16.3% year on year. Pleasingly, management notes that the strong momentum has continued into July.

The post Why Adore Beauty, Domino's, DroneShield, and Universal Store shares are rising today appeared first on The Motley Fool Australia.

Let's see what is getting investors excited on Friday:

Adore Beauty Group Ltd (ASX: ABY)

The Adore Beauty share price is up 5% to 91 cents. Investors have been buying the online beauty retailer's shares after it released a trading update for FY 2024.

Adore Beauty revealed that it delivered unaudited FY 2024 revenue of $195.7 million for the 12 months ended 30 June. This is up 7.4% on the prior corresponding period, which management believes is a strong result in a challenging retail environment.

This growth was underpinned by Adore Beauty's continued focus on customer centricity, which has seen its returning customer base grow 5.8% to a record 519,000. Total active customers increased 1.6% to 814,000 for the year.

Management also advised that it expects an FY 2024 EBITDA margin between 2.2% to 2.5%. This would mean EBITDA in the range of approximately $4.3 million to $4.89 million.

The ASX retail share's CEO, Tamalin Morton, commented:

Adore Beauty continues to deliver revenue and active customer growth, even as cost-of-living pressures impact consumer sentiment and trading conditions more broadly.

Our solid performance over FY24 has reaffirmed the resilience of both our business and the beauty and personal care category, and we continue to focus on meeting customer needs, while growing both sales and profitability.

Michael Hill International Ltd (ASX: MHJ)

The Michael Hill International share price is up 7.5% to 57.5 cents. This has also been driven by the release of an FY 2024 trading update.

According to the release, the jewellery retailer expects to report sales growth of 3.8% in FY 2024. This follows a stronger second half, with group sales rising 4.9% on the prior corresponding period.

Michael Hill's growth was even stronger late in the financial year, with group sales rising 6% during the last seven weeks. This was driven by positive momentum across all markets and channels.

In light of this, management expects its earnings before interest and tax (EBIT) to be in line with analyst expectations. It is forecasting group comparable EBIT of between NZ$14 million to NZ$16 million.

The ASX retail share's CEO, Daniel Bracken, said:

While challenging economic conditions have persisted across all markets throughout the year, particularly in the fine jewellery segment, the Group has continued to outperform the category, with a focus on retail fundamentals and execution of its clearly articulated strategies.

Particularly pleasing was the consistent performance of our Canadian business throughout the year.

The post Why these ASX retail shares are surging while the market dives appeared first on The Motley Fool Australia.

When we can identify ASX small-cap shares with good growth potential, we can hold them for the long term as they hopefully become a much bigger business.

While there's likely to be volatility along the way, I'm excited by these two stocks.

Airtasker Ltd (ASX: ART)

Airtasker says it operates Australia's "leading online marketplace for local services".

It enables people and businesses with tasks to find someone to complete them for a fee. Almost any task can be advertised with Airtasker, including cleaning, car work, delivery, various handyman tasks, furniture assembly, removalists, teaching/lessons, martial arts, pet care, and many more.

Airtasker is currently seeing a solid profit increase, while also investing for long-term growth.

The company has already developed its platform, so extra revenue in Australia can be a real boost for long-term profitability. In the FY24 first-half result, it reported a gross profit margin of around 95%, which is very large. It means almost all of the company's new revenue turns into usable gross profit.

In the FY24 third quarter, the ASX small-cap share reported positive free cash flow of $2.5 million, an improvement of $5.1 million year over year. The Airtasker marketplace revenue increased 11.5% year over year to $10.1 million. I think new revenue will significantly help Airtasker's financials.

Excitingly, the company is employing the same strategies in the United Kingdom as it did in Australia to achieve success. In the FY24 third quarter, UK-posted tasks grew 49.1%. The UK market is much bigger than Australia, so this ASX small-cap share has a lot of potential there.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is an online retailer of beauty and health products. The business offers a portfolio of more than 270 brands and over 13,000 products through its platform. The company says it has evolved into an integrated content, marketing and e-commerce retail platform.

The business has done well growing its app use. Marketing to customers, offering app-only promotions, and content integration have benefits. The app and podcasts can lower the costs of reaching customers and encourage them to increase order values and frequency.

Adore Beauty is also working to grow its own brands – AB Lab, Adore Beauty and Viviology – which gives the company a way to grow sales and capture more value in a sale on its platform.

In its recent FY24 third-quarter update, the ASX small-cap share showed that some of its main metrics were improving.

Revenue rose by 8.9% to $45 million, the number of returning customers increased 6.4% to 514,000, active customers grew 2.4% to 811,000, and the mobile app accounted for 28% of total revenue (up from 23% in the prior corresponding period).

If revenue keeps growing over time, then I think this company can steadily grow too.

The post 2 ASX small-cap shares with excellent potential I'd buy right now appeared first on The Motley Fool Australia.

Some people may directly have large allocations to Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO) and Fortescue Ltd (ASX: FMG).

There are plenty of different potential investments on the ASX we can use to reduce industry exposure risk and potentially increase returns, so I'll talk about three.

VanEck MSCI International Quality ETF (ASX: QUAL)

This is an exchange-traded fund (ETF) that invests in a global portfolio of around 300 names across a range of geographies and sectors.

The countries with a weighting of more than 1% of the portfolio include the US, Switzerland, the UK, Japan, the Netherlands, Denmark, France and Canada.

In the S&P/ASX 200 Index (ASX: XJO), financials and mining make up more than half of the portfolio, while in the QUAL ETF they (combined) account for less than 10% of the fund. Instead, appealing growth industries like IT (34.3%) and healthcare (17.9%) make up more than half of the allocation of the VanEck MSCI International Quality ETF.

To be chosen for this portfolio, the stocks have to rank well on key fundamentals, including a high return on equity (ROE), have earnings stability and have low financial leverage. When you put those together, you're left with strong global businesses like Nvidia, Microsoft, Meta Platforms and Apple in the portfolio.

Past performance is not a guarantee of future performance, but since the QUAL ETF started in October 2014 it has returned an average of 16.6% per annum.  

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is a leading digital retailer that sells products related to beauty and health. There are over 270 brands on the website, with more than 13,000 products.

Over time, I think more people are going to buy more of their items online, and this ASX share is in a good spot to take advantage. The numbers are all showing positive signs.

After the one-off impacts of the COVID-19 period, Adore Beauty is back to reporting solid progress with its revenue, which increased by 7% in the first half of FY24. Meanwhile, revenue rose 8.1% in the second half of FY24, showing strong momentum.

It's also seeing growing numbers of customers – the HY24 result saw returning customers increase 5% to 507,000 while active customers went up 0.5% to 804,000.

Pleasingly, the business is generating positive reported earnings before interest, tax, depreciation and amortisation (EBITDA) – it made $2.4 million in the HY24 result. I think the company's margins can materially increase as it grows thanks to operating leverage.

The company is expanding the ranges of its owned brands – AB Lab, Adore Beauty and Viviology. Adore Beauty also said it's actively pursuing possible acquisitions.

In five years, I think the ASX share could be much more profitable.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is a company that seeks to invest in unlisted technology businesses. I think everyone should have good exposure to technology because that's the sector from which some of the most groundbreaking companies seem to be emerging these days.

Bailador typically looks to invest between $5 million to $20 million in businesses that are seeking 'growth-stage' investment.

The businesses it invests in typically are run by the founders, have a proven business model with attractive unit economics, have international revenue generation, a huge market opportunity and the ability to generate repeat revenue.

Is it priced attractively? In recent months it has usually traded at a discount of more than 20% to its net tangible assets (NTA), which is an appealing discount in my opinion.

Two of its biggest investments at the moment include the world leader in hotel management software and the largest independent tours and activities booking software provider.

The post 3 ASX shares to buy for great portfolio diversification appeared first on The Motley Fool Australia.

The online beauty retailer's shares hit a 52-week high of $1.46 before ending the day 4% higher at $1.34.

This follows the release of the small cap ASX stock's half-year results.

Small cap ASX stock hits 52-week high on results release

• Revenue up 7% to $100.7 million
• Active customers up 0.5% to 804,000
• Record returning customers of 507,000
• Reported EBITDA up 6x to $2.8 million
• Cash balance of $32.3 million

What happened during the half?

For the six months ended 31 December, Adore Beauty reported a 7% increase in revenue to $100.7 million. This was supported by a modest increase in active customers and record average order values and annual spend per customer.

Adore Beauty's reported EBITDA came in 6x higher than last year at $2.4 million with a margin of 2.3% (up from of 0.4%). This is in line with guidance and reflects revenue growth, cost optimisation, and re-investment in margin expansion initiatives.

At the end of the period, the small cap ASX stock had a cash balance $30.1 million and no debt.

Management commentary

Adore Beauty's new CEO, Tamalin Morton, said:

Adore Beauty continues to navigate the post-lockdown environment and is cycling periods of significant growth. Year-on-year revenue comparisons remain volatile given the vastly different trading conditions in the prior period, when many of our customers were experiencing lockdown.

Encouragingly, we now have a record number of returning customers, who are contributing 78% of all revenue with larger basket sizes and more frequent orders than new customers. And we're starting to see the early benefits of our strategic initiatives, which are designed to drive improvements in key customer metrics and support sustainable long-term growth.

Outlook

Management notes that trading conditions remain challenging with high levels of inflation and subdued consumer sentiment.

It also notes that January growth comparisons are volatile as the prior corresponding period was impacted by mandated isolation for Omicron, limited travel opportunities, and additional promotional activity.

As a result, trading in the first seven weeks reflects this volatility with revenue down 7.8% on the prior corresponding period.

However, sales through February have shown improvement and are up 3.7% on the same period last year.

Though, it has warned that second half sales are no longer expected to grow in the double digits compared to the second half of FY 2023. Instead, they are expected to be flat as the small cap ASX stock focuses on margins and remaining profitable.

Adore Beauty shares are up 30% over the last 12 months.

The post Guess which small cap ASX stock hit a 52-week high amid stellar half-year growth appeared first on The Motley Fool Australia.

But which ASX shares could be top buys in 2024? Named below are 10 that I believe could generate strong returns for investors over the next 12 months.

Underperforming giants

The first three ASX shares I would buy are fallen giants CSL Limited (ASX: CSL), ResMed Inc. (ASX: RMD), and Treasury Wine Estates Ltd (ASX: TWE). All three have underperformed in 2023 but I believe the tide could turn and a re-rating could happen next year.

In respect to CSL, Goldman Sachs believes it "is now entering a period of more capital-efficient growth." As for ResMed, I believe concerns over the rise of drugs like Ozempic have been overdone and left its shares trading at a very attractive level. Particularly given how its addressable market remains significant even after factoring in the potential long-term impact of Ozempic.

Finally, Treasury Wine's growth could be given a boost in 2024 if China removes its wine tariffs. It has also recently completed the acquisition of a high-margin luxury wine brand in the United States.

Small caps to rally?

With inflation showing signs of being tamed, many economists are now predicting interest rate cuts next year. This could be good news for the small side of the market, which has underperformed greatly during the rate hike cycle.

Because of this, I think it could be a good idea to have a little exposure to small-cap ASX shares if your risk tolerance allows for it.

Companies I would consider buying include counterdrone technology company DroneShield Ltd (ASX: DRO), online beauty retailer Adore Beauty Group Ltd (ASX: ABY), and quick service restaurant solutions company Task Group Holdings Ltd (ASX: TSK). I believe all three have strong long-term growth outlooks.

Mining sector picks

With BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) shares ending the year close to record highs, I would reluctantly look beyond these ASX mining shares in 2024.

I think South32 Ltd (ASX: S32) shares could be a good alternative. Although FY 2024 looks set to be a poor year for the diversified miner, I believe this is all priced in. And with things looking markedly better for 2025, I expect the market to start re-rating its shares next year.

In addition, I see a lot of value in IGO Ltd (ASX: IGO) shares at the current level. Although lithium prices are expected to fall further in 2024, it appears well-placed to ride out the storm due to its ultra-low costs. It could also be an attractive M&A target.

Buying quality ASX shares

My final two ASX share picks for 2024 are gaming technology company Aristocrat Leisure Limited (ASX: ALL), which manages the top offshore sportsbooks online and cloud accounting platform provider Xero Limited (ASX: XRO).

Although these two shares have smashed the market this year, I would still buy them for next year due to the high-quality nature of their businesses and their strong long-term growth potential.

Additionally, with interest rates expected to fall, this would likely be a boost to valuations in the tech sector, which bodes well for Aristocrat and Xero.

The post 10 ASX shares I would buy in 2024 appeared first on The Motley Fool Australia.