ODDITY Tech (NASDAQ: ODD) shares took a hit after the company reported its fourth-quarter FY23 results and issued guidance for FY24 that fell below estimates. Despite beating revenue expectations, investors seemed concerned about the company’s EPS outlook for the upcoming year.
In the fourth quarter of FY23, ODDITY Tech reported a 44% year-over-year increase in net revenue to $97.2 million, exceeding the consensus of $86.4 million. Gross profit also saw a significant jump, rising 53% year-over-year to $67 million, with a margin expansion of 400 basis points to 69.4%. Adjusted EBITDA increased to $16.3 million from $2.6 million the previous year, with a margin of 16.8% compared to 3.9% in the same period last year. Adjusted EPS came in at $0.17, beating analysts’ expectations of $0.12.
Despite the strong performance in the fourth quarter, ODDITY Tech provided guidance for FY24 that was below Wall Street’s estimates. The company expects first-quarter adjusted EPS of $0.47-$0.50 and revenue of $204 million-$207 million, both slightly below analysts’ estimates. For the full year, ODDITY Tech projects adjusted EPS of $1.49-$1.54 and revenue of $620 million-$630 million, falling short of the consensus of $1.57 EPS and $591.61 million in revenue.
Lindsay Drucker Mann, ODDITY Global CFO, remains optimistic about the company’s future growth initiatives, including ODDITY LABS and future brand launches. She stated, “Q124 is off to a very strong start, and because of our high repeat rates, we have high confidence and visibility into achieving our full-year 2024 objectives.”
As a result of the disappointing guidance, ODDITY Tech shares dropped 7.38% to $42.51 on Wednesday. Investors will be closely monitoring the company’s performance in the coming quarters to see if it can deliver on its growth objectives and regain investor confidence.
