Canadian beauty group MAV Beauty Brands Inc. reported an increase in its quarterly revenue on Friday, despite the hurdles caused by the Covid-19 pandemic.
The Ontario-based company reported revenue of $31.4 million, up 30 percent, for the first quarter ended March 31, 2020, compared to $24.1 million in the prior-year period.
Revenue from North America was $30.2 million in the first quarter 2020, up 34 percent from $22.5 million, while revenue from international markets was $1.2 million, down from $1.6 million reported in the prior period, due primarily to the impact of Covid-19 in March, which immediately delayed product shipments.
While the crisis left stores closed through most of March, it led to a strong acceleration in e-commerce sales for MAV, whose online business more than doubled during the quarter over the prior year.
Net income for the quarter was $1.2 million, up from $1.1 million, reported in the equivalent period in the previous year. Meanwhile, Adjusted EBITDA increased by 34% to $8.3 million, from $6.2 million, "reflecting higher revenue and gross profit," said the company.
"Our first-quarter sales and Adjusted EBITDA showed strong year-over-year increases from healthy organic growth and the addition of The Mane Choice,” explained Tim Bunch, president & CEO of MAV Beauty Brands, referring to the brand his company recently acquired in November 2019.
“First-quarter sales reflect the positive impact of 2020 shelf gains, and we believe also benefited from consumers stocking up on essential items as the majority of our North American food, drug, and mass retailers have remained open during lockdowns. These positive drivers, combined with higher e-commerce sales, offset headwinds we experienced in the quarter, including the initial impact of store closures in specialty beauty and softness in our international business.”
In 2018, MAV launched an IPO, as well as acquired cruelty-free self-care brand Cake Beauty and plant-based beauty label Renpure.
The company also entered ten new markets in 2018, meaning that the group, which aside from Cake Beauty and Renpure, also owns the Marc Anthony True Professional haircare brand and The Mane Choice, now distributes its products in 29 countries outside of North America.
Looking ahead, Bunch said that it expects industry-wide haircare sales to be affected in the near term from reduced retail traffic and other factors.
Due to the uncertainty of the pandemic, the company has also taken steps to reduce operating expenses, particularly discretionary expenses, which will be evident as of Q2.