Ulta Beauty anticipates a slowdown in the beauty retail sector’s most resilient segment, but an emerging player, Oddity Tech, claims to defy this trend.
Oddity Tech, an Israeli cosmetics platform utilizing artificial intelligence for product development, has exceeded expectations with its first-quarter performance, prompting an upward revision of its full-year guidance.
Here’s how the company, known for brands like Il Makiage and Spoiled Child, fared against Wall Street projections, as per a survey of analysts by LSEG:
– Earnings per share: Adjusted at 61 cents compared to the expected 49 cents.
– Revenue: $211.63 million versus the expected $205 million.
For the quarter ending March 31, Oddity reported a net income of $32.98 million, or 53 cents per share, up from $19.59 million, or 35 cents per share, a year earlier.
Adjusted earnings stood at 61 cents per share, excluding one-time items. Sales soared to $212 million, marking a 28% increase from the previous year’s $166 million.
The company now forecasts full-year revenue in the range of $626 million to $635 million, up from the previous outlook of $620 million to $630 million.
Adjusted earnings per share are projected to be between $1.57 and $1.62, compared to the earlier guidance of $1.49 to $1.54. For the current quarter, sales are expected to range from $185 million to $189 million, with adjusted earnings per share between 61 and 64 cents.
Shares of Oddity surged nearly 10% in after-hours trading following these announcements. Oddity, which debuted on the Nasdaq in July, aims to revolutionize the traditional beauty and wellness industry through AI-driven product development and personalized recommendations.
Contrary to Ulta Beauty CEO Dave Kimbell’s recent warning of a cooling demand for beauty products, Oddity remains bullish. Kimbell’s cautionary statements caused a 15% drop in Ulta Beauty’s stock and affected shares of e.l.f. Beauty, Estée Lauder, and Coty.
“We have observed a slowdown in the category,” remarked Kimbell at an investor conference hosted by JPMorgan Chase. “We anticipated a moderation in growth given its sustained momentum over several years, but the pace of deceleration has surpassed our expectations.”
Lindsay Drucker Mann, Oddity’s CFO, refutes claims of a slowdown. “There’s no slowdown for us, neither in new user acquisition nor in the behavior of existing users,” she stated in an interview.
“If anything, our latest quarter underscores the immense demand for online beauty and wellness solutions.”
Drucker Mann emphasized the industry’s transformative shift towards online platforms and high-efficacy products tailored to consumer needs, affirming Oddity’s leadership in driving these trends forward.
