like Alta Beauty It says it expects a slowdown in the more flexible category of retail, and one startup says it's bucking that trend.
Strange technologyThe new Israeli generic cosmetics platform, which uses artificial intelligence to develop products, announced first-quarter results that beat previous expectations and raised its guidance for the full year.
Here's how the beauty retailer behind the Il Makiage and Spoiled Child brands performed compared to what Wall Street expected, based on a survey of analysts conducted by LSEG:
Earnings per share: 61 cents adjusted vs. 49 cents expected Revenue: $211.63 million vs. $205 million expected
The company reported net income of $32.98 million, or 53 cents per share, for the three-month period ending March 31, 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 rose to $212 million, up about 28% from $166 million the previous year.
The company now expects full-year revenue to be between $626 million and $635 million, compared to the previous forecast of $620 million to $630 million. Analysts had expected $627 million, according to LSEG. It expects adjusted EPS to be between $1.57 and $1.62, up from previous guidance of $1.49 to $1.54. Analysts were expecting $1.51, according to LSEG.
For the current quarter, Oddity expects sales to range between $185 million and $189 million, and adjusted earnings per share to range 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 jumped nearly 10% in extended trading Tuesday.
Oddity, which began trading on the Nasdaq in July, aims to disrupt the outdated beauty and wellness industry by using artificial intelligence to develop new products and personalized recommendations.
Oddity believes that beauty and health products are better sold online, and that consumers won't need to visit beauty stores like Ulta and Sephora if product selection can be improved.
Last month, Ulta Beauty CEO Dave Kimball warned that demand for beauty products was declining, sending its shares down 15% that day and hitting Ulta Beauty shares. Dwarf beauty, Estee Lauder And Kuti.
“We've seen a slowdown in the overall category,” Kimball said at an investor conference hosted by JPMorgan Chase. “We entered the year — and we talked about this on our (earnings) call a few weeks ago — expecting the category to moderate. It (has), as I said, seen several years of strong growth. We didn't expect that to continue at the rate it was growing.”
He added that the slowdown was “a little bit earlier and a little bit bigger than we thought.” The contraction included price points and beauty categories, but was most significant in makeup and hair care, Kimball said.
Lindsay Drucker Mann, CFO of Oddity, disagreed that the category is slowing.
“There is no slowdown for us, neither in our new users, nor in the way our existing users are behaving. If anything, the quarter shows that there is tremendous demand on the Internet,” Drucker Mann told CNBC in an interview.
“What we are seeing is an industry that is transforming,” she said. “So the consumer is moving online and the consumer is moving to highly efficient products that really solve their problems, and those are two really unstoppable trends that we see driving the industry that we lead.”
Read the full earnings release here.
