As Ulta Beauty While one upstart says he expects a slowdown in retail’s most resilient category, he’s bucking the trend.
Oddity TechThe newly listed Israeli cosmetics platform, which uses artificial intelligence to develop products, posted first-quarter results that beat expectations and raised its full-year forecast.
Here’s how the cosmetics retailer behind brands Il Makiage and Spoiled Child performed compared to Wall Street’s expectations, based on an LSEG analyst survey:
- Earnings per share: 61 cents adjusted versus 49 cents expected
- Revenue: $211.63 million versus expected $205 million
The company reported net income of $32.98 million, or 53 cents per share, for the three-month period ended March 31, compared with $19.59 million, or 35 cents per share, a year earlier. Excluding one-time items, Oddity reported profit of 61 cents per share.
Revenue rose to $212 million, up about 28% from $166 million a year ago.
The company now expects full-year revenue between $626 million and $635 million, compared to a previous forecast of $620 million to $630 million. According to LSEG, analysts had expected $627 million. The company expects adjusted earnings per share to be between $1.57 and $1.62, up from its previous forecast of $1.49 to $1.54. Analysts had expected $1.51, according to LSEG.
For the current quarter, Oddity expects revenue between $185 million and $189 million and adjusted earnings per share between 61 cents and 64 cents. Analysts had expected revenue of $186.5 million and earnings per share of 56 cents, according to LSEG.
Shares rose nearly 10% in extended trading on Tuesday.
Oddity, which began trading on Nasdaq in July, aims to revolutionize the legacy beauty and wellness industry by using AI to develop new products and tailored recommendations.
Oddity believes that beauty and wellness products are best sold online and that if product selection can be improved, consumers will not have to visit beauty salons like Ulta and Sephora.
Last month, Ulta Beauty CEO Dave Kimbell warned that demand for beauty products was cooling, causing shares of Ulta Beauty to fall 15% that day Fairy beauty, Estee Lauder And Coty.
“We have seen a slowdown in the overall category,” Kimbell said at an investor conference hosted by JPMorgan Chase. “We came into the year – and talked about it at our party [earnings] Called a few weeks ago – I expect the category to be moderated. It has [had], as I said, several years of strong growth. We didn’t expect the growth rate to continue.”
He added that the slowdown happened “a little earlier and a little bigger than we thought.” Kimbell said the downturn impacted all price points and beauty categories, but was more noticeable in prestige makeup and hair care.
Lindsay Drucker Mann, Oddity’s chief financial officer, disagreed that the industry is slowing.
“For us, there is no slowing down, neither in our new users nor in the way our existing users behave. If anything, the quarter shows that there is a huge demand for online,” Drucker Mann told CNBC in an interview.
“What we’re seeing is an industry that’s changing,” she said. “So the consumer goes online and the consumer grabs highly effective products that really solve their problems. These are two truly unstoppable trends that we believe will drive the industry in which we lead.”
Read the full earnings release here.
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2024-05-07 20:56:56
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