Ulta Beauty, as it anticipates a deceleration in the most resilient category of retail, a newcomer claims to be defying the prevailing trend.
Oddity Tech, the recently publicized Israeli cosmetics platform leveraging artificial intelligence for product development, unveiled first-quarter results surpassing expectations and adjusted its full-year guidance upwards.
Here's how the beauty retailer behind the Il Makiage and Spoiled Child brands performed versus Wall Street projections, based on an LSEG analyst survey:
Earnings per share: 61 cents adjusted vs. 49 cents forecasted
Revenue: $211.63 million vs. $205 million projected
For the three-month period ending March 31, the company reported net income of $32.98 million, or 53 cents per share, compared to $19.59 million, or 35 cents per share, a year earlier. Excluding one-time items, Oddity reported earnings of 61 cents per share.
Sales surged to $212 million, marking a roughly 28% increase from $166 million a year earlier.
Now, the company anticipates full-year revenue to range between $626 million and $635 million, up from a previous outlook of $620 million to $630 million. Analysts had anticipated $627 million, according to LSEG. It forecasts adjusted earnings per share to range from $1.57 to $1.62, up from prior guidance of $1.49 to $1.54. Analysts had expected $1.51, according to LSEG.
For the current quarter, Oddity forecasts sales between $185 million and $189 million, and adjusted earnings per share ranging from 61 cents to 64 cents. Analysts had predicted revenue of $186.5 million and earnings per share of 56 cents, according to LSEG.
Shares surged nearly 10% in extended trading on Tuesday.
Oddity, which commenced
trading on the Nasdaq in July, aims to disrupt the conventional beauty and wellness industry by leveraging AI for product innovation and personalized recommendations.
Oddity contends that beauty and wellness products are ideally sold online, positing that consumers won't necessitate visits to beauty retailers like Ulta and Sephora if product variety and selection can be enhanced.
In the previous month, Ulta Beauty CEO Dave Kimbell cautioned about waning demand for beauty products, resulting in a 15% decline in its stock and impacting shares of
e.l.f. Beauty,
Estée Lauder, and
Coty.
Kimbell articulated at a JPMorgan Chase investor conference, "We've observed a slowdown in the overall category... We came into the year expecting the category to moderate. It's had several years of robust growth. We did not foresee it continuing at its previous pace."
He noted that the downturn has spanned across price segments and beauty categories but has been more pronounced in prestige makeup and hair care.
Lindsay Drucker Mann, CFO of Oddity, disputed assertions of a slowdown in the category.
"We haven't observed any slowdown, neither in our new users nor in the behavior of our existing users. If anything, the quarter demonstrates substantial online demand," Drucker Mann asserted in a CNBC interview.
"We do perceive an industry undergoing transformation," she remarked. "The consumer is transitioning online, gravitating towards high-efficacy products that truly address their concerns. These are two indomitable trends we see propelling our industry forward."
