Oddity Tech prepares to launch medical-grade skincare brand

Beauty and wellness company Oddity Tech has been posting strong sales and profit growth since its initial public offering a year ago, but that hasn’t been enough to lift its stock price. Now the cosmetics company, Il Makiage, is preparing to launch a medical-grade skin and body care line, aiming to prove it can continue to grow in an area where other companies have struggled.

The as-yet-unnamed brand is the company’s first foray into medical-grade products and will include both over-the-counter and prescription medications for skin conditions such as acne and eczema, according to global CFO Lindsay Drucker Mann. Oddity Tech is an online direct-to-consumer retailer.

One year after its IPO, some investors are still in “show mode,” questioning whether Oddity Tech can keep up its growth pace and successfully launch new brands, analysts say. Established beauty companies such as Estee Lauder and Ulta Beauty have recently cut their revenue forecasts. And other once-hot direct-to-consumer brands, such as Allbirds and Stitch Fix, have also seen sales decline.

Oddity Tech's revenue in the first quarter rose 28% from a year earlier to $211.6 million. Profits rose 68% to about $33 million in the same period. The company in March raised its 2024 revenue forecast to $626 million to $635 million from $620 million to $630 million. The company has told investors that it expects revenue growth and adjusted EBITDA margins to be at or above 20% over the long term.

"Our job is to consistently deliver results," said Drucker Mann, whose company also owns the hair and skin care brand SpoiledChild. "Over time, fundamentals will win out."

Drucker Mann, who is seen by investors as a spokesperson for the company, joined Oddity Tech from Goldman Sachs in 2021. Oddity Tech matches customers with products such as cosmetics by asking them to fill out an online questionnaire. The customer data collected in the process enables the company to recommend products and develop new brands. The company uses AI models to recommend the right products.

With the medical-grade brand, the company plans to use visual technology to remotely assess customers’ skin conditions, such as identifying acne. The new brand, which will launch in the second half of 2025, will also sell products that include molecules developed by the company’s in-house R&D division, Oddity Labs.