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Adore Beauty revenue rises, stock price plummets

Health and beauty marketplace Adore Beauty has revealed revenue gains of 47 per cent to $39.4 million for the third quarter.

And while the group said it is on track to achieve a strong full-year revenue growth of up to 47 per cent, due to be reported in August, Adore’s share price fell because of a widespread misunderstanding of its active customer numbers.

Adore said it’s active customer base had hit 687,000 at the end of the third quarter, which it claimed was a 69 per cent improvement on the prior period.

However, analysts and pundits compared these figures to numbers revealed during Adore’s half-year results, which said it had 777,000 active customers.

The difference, Adore later clarified, was that the half-year numbers were based on a 12-month period, while the third-quarter-to-date numbers tracked off of a nine month period, and weren’t directly comparable.

The clarification has so far done little to repair the share price, which at the time of this writing sits at $3.70 per security compared to a high of $4.20 yesterday morning.

“The business is making strong progress on our strategy to leverage our online market leadership to further capture market share in a large and growing market,” Adore chief executive Tennealle O’Shannessy said.

“We continue to make disciplined investments in our mobile app, loyalty program, content capabilities, range and adjacency expansion opportunities and private label development.”

According to Adore, the business’ strategy remains focused on growing its market share of the $11.2 billion beauty and personal care market in Australia through investment in brand awareness, furthering customer acquisition and retention.

“Given the predominantly fixed nature of the business’ cost base, management expect scale benefits to increase operating leverage and deliver EBITDA margin expansion in the longer term as the company continues to grow revenue,” Adore said.

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