The sheen went off recently-listed beauty retailer Adore Beauty after a less than convincing trading update on Thursday.
The company’s shares took a 15% whacking at the opening with investors unimpressed by declining customer numbers in the firm’s trading update.
Adore shares dropped to new record low $3.65, a long, long way from the IPO price in last October’s listing of $6.75 and the first sale price of $7.40. They ended the day down 19.2% at $3.70.
The sharp fall came despite the company revealing revenue for the third quarter was up 47% on the same time a year ago at $39.4 million.
What investors didn’t like was what has happened to active customers so far in 2021.
While the number of active customers for the March quarter jumped 69% on the same quarter of 2020 to 687,000, that was lower than the 770,000 it reported at the end of December.
Adore said it was still track to achieve full-year 2021 revenue growth of 43% to 47% year on year, compared to pre-COVID revenue growth of 38.6% in 2018-19.
“The company continues to see a structural shift in consumer behaviour towards online retail, based on continued strong retention of customers acquired during COVID lockdown,” Adore said in a release to the ASX
Adore was founded by now-chairman Kate Morris in her garage in Melbourne more than 20 years ago. After a solid early reaction to the float, the shares quickly fell below the $6.75 listing price.
In February Adore reported its inaugural interim profit result, revealing it was set to easily top its full-year sales and earnings forecasts after just a few months as a publicly listed company.
Sales for the six months to the end of December rose 85% to $96.2 million, beating the company’s prospectus forecasts by 8% and Adore’s own forecast in December.
“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,” CEO Tennealle O’Shannessy said in Thursday release.
The shares peaked at $6.71 in late January but had dropped to $5.49 by the time of the half year results release on February 23. They fell to then then all time low of $4.60 in early march (despite the encouraging comments in the interim results, and then lurched lower in the wake of Thursday’s update.
It seems investors were not listening.
