ODDITY Tech Ltd. (NASDAQ:ODD) stock surged Wednesday after the beauty and wellness company reported better-than-expected second-quarter results and issued third-quarter and full-year sales guidance above Wall Street estimates.
The rally was likely magnified by elevated short interest, with 32% of the public float sold short, signaling substantial bearish positioning that may have fueled a squeeze.
ODDITY reported adjusted earnings of 20 cents per share, beating the consensus estimate of 16 cents.
Sales fell 25% year over year to $180.52 million but topped the $177.60 million estimate.
The revenue decline primarily reflected lower IL MAKIAGE sales following an advertising account disruption involving the company’s largest advertising partner.
ODDITY Tech Earnings Snapshot
First-order net revenue fell about 40% year over year, while repeat-order net revenue declined about 20%.
Average order value fell about 8%, mainly due to lower IL MAKIAGE average order value, fewer higher-value first orders and a shift in product mix away from the brand.
Gross margin narrowed 360 basis points to 68.7% from 72.3% a year earlier, partly due to the lower average order value.
Adjusted EBITDA came in at $13 million, topping the company’s $8 million to $10 million guidance. However, higher IL MAKIAGE customer acquisition costs, fixed-cost deleverage and increased spending to accelerate SpoiledChild’s growth pressured profitability.
ODDITY ended the quarter with $561 million in cash, cash equivalents and investments. Its $350 million credit facilities remained undrawn.
The company repurchased 5.6 million shares for $80 million during the quarter. Year-to-date repurchases reached 11.7 million shares for $163 million, reducing ordinary shares outstanding by about 20%. ODDITY had about $87 million remaining under its $200 million repurchase authorization.
Business Performance
SpoiledChild remains on track to grow at least 35% in 2026 and approach $350 million in net revenue. The brand is expected to reach that milestone more than a year faster than IL MAKIAGE.
Its 12-month net revenue repeat rates remain well above 100%.
Metodic, launched several months ago, is also showing early momentum. ODDITY expects its first-year revenue to exceed SpoiledChild’s first-year revenue.
Management said Metodic’s hyperpigmentation products are showing stronger customer satisfaction and retention signals. Higher acquisition costs are expected to be offset by average order value, retention and resulting paybacks.
ODDITY has more than 70 million users on its direct-to-consumer platform, providing extensive first-party data to identify consumer demand and product opportunities.
ODDITY Labs is also developing molecules targeting hyperpigmentation and aging. Early in-vitro results have shown potential to increase collagen synthesis and reduce aging markers.
Guidance Points To Sequential Improvement
For the third quarter, ODDITY expects sales of $140.51 million, above the $122.64 million estimate. Revenue is expected to decline about 5% year over year, a significant sequential improvement from the first half.
Management said it believes the worst of the acquisition-driven revenue pressure has passed.
For fiscal 2026, ODDITY expects sales of $655.97 million, above the $628.06 million analyst estimate. Revenue is projected to decline about 19% year over year, primarily reflecting the first-half weakness.
ODDITY Tech Price Action
ODD Price Action: ODDITY Tech shares were up 25.34% at $16.32 at the time of publication on Wednesday, according to Benzinga Pro data.
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