Adore Beauty Group Limited (ASX: ABY) delivered a strong financial performance for the year ended June 30, 2025 (FY25), with material improvements in profitability, margin expansion and disciplined cost management.
The company reported record earnings before interest, tax, depreciation and amortisation (EBITDA) of A$8.1 million, up 67.8% on the prior year, with EBITDA margin at 4.1%. Earnings before interest and tax (EBIT) reached A$4.0 million, rising 74.8% year-on-year. Gross margin improved 190 basis points to 35.3%, while revenue lifted 1.6% to A$198.8 million.
Customer acquisition costs fell to A$59, driving profitable new customer growth of 4.9% in the second half. The iKOU integration continued to progress, four new stores were opened, and the company ended FY25 with a cash balance of A$12.7 million and no debt. Trading in early FY26 is up 9%.
Strengthened earnings and disciplined cost base
Adore Beauty’s FY25 results reflect its focus on reshaping revenue quality. The company delivered record EBITDA of A$8.1 million and EBIT of A$4.0 million, both in line with guidance. Margin expansion was driven by growth in owned brands, reduced promotional activity, retail media contribution and tighter cost and inventory controls. Gross margin rose to 35.3%, a 190-basis point uplift on FY24, while revenue of A$198.8 million grew 1.6%. Management reiterated its target of achieving 30% revenue growth and doubling EBIT margin by FY27.
Growth in retail and customer acquisition
The group accelerated its retail strategy, opening three integrated stores at Southland (VIC), Watergardens (VIC) and Carousel (WA), followed by new sites at Booragoon (WA) and Broadway (NSW) early in FY26. Almost 200,000 customers visited these outlets, with skincare, haircare and fragrance accounting for the majority of sales.
The stores also acted as new customer drivers, with nearly one-third of in-store transactions coming from first-time customers. Marketing efficiencies reduced acquisition costs by A$15, while profitable new customer growth rose 4.9% in H2. A further 12–14 new stores are planned for FY26, including the group’s first sites in Queensland and South Australia.
Digital innovation and loyalty engagement
Adore Beauty continues to invest in online enhancements to boost customer experience and conversion. AI-driven personalisation, faster site speed and a refreshed platform are underway. The new “Adore Rewards” loyalty program added over 440,000 members by year-end, with half using the Adore app.
The program offers value-led benefits, including A$20 rewards for every A$250 spent and quarterly full-size product gifts. This initiative supports higher retention and greater share-of-wallet, with members demonstrating increased repeat purchases.
The integration of more than 60 new brands, including Hermes, Gucci Beauty and Prada Beauty, further bolstered engagement and customer acquisition. Retail media also delivered meaningful revenue contribution, adding to margin expansion.
iKOU integration and owned brand strategy
The acquisition of iKOU continues to contribute positively, with revenue growth across retail, direct-to-consumer and wholesale channels. The brand expanded its footprint with a flagship Melbourne CBD store, new outlets in Berry (NSW) and an upcoming Sorrento (VIC) location.
iKOU has been integrated into Adore Beauty’s shared services, leveraging its fulfilment centre to strengthen efficiency. Alongside iKOU, owned brands such as Viviology and AB Lab are expected to be key margin levers, projected to account for more than 6% of group revenue in FY26. Together, these businesses underpin Adore Beauty’s strategy of diversifying revenue streams and improving profitability.
Outlook and guidance for FY26
The company entered FY26 with strong momentum, with trading in the first seven weeks up 9% year-on-year. Management is targeting EBITDA margins of 5–6% and EBIT margins of 2.5–3.5%, supported by store expansion, improved online conversion, loyalty engagement and owned brand growth.
Retail network expansion remains a key priority, with 12–14 new stores scheduled for FY26 and a national footprint of over 25 stores expected by 2027. Adore Beauty remains debt-free with a cash balance of A$12.7 million, well-positioned to fund its growth initiatives.
CEO Sacha Laing said the results demonstrate “significant progress in the delivery of our strategic plan,” with earnings quality improving through omni-channel investment, iKOU integration and disciplined execution