The Adore Beauty Group Ltd (ASX:ABY) The stock price fell more than 20% in June 2022, adding to declines already seen in 2022.

Shares in the e-commerce business fell 22.8% to end the month at $1.05 each. It was significantly worse than what had happened with the S&P/ASX 200 Index (ASX:XJO). The ASX 200 fell around 9% last month.

Adore Beauty is Australia’s leading online retailer. It sells more than 11,700 products through more than 270 brands.

Since listing a few years ago, the company has shown that it is benefiting from the online shopping boom as more and more shoppers have chosen to purchase their products online. However, investor sentiment has deteriorated, particularly in 2022, with Adore Beauty’s share price falling more than 70% year-to-date.

What happened in June?

There were no operational announcements from the company in June.

However, investors learned that Adore Beauty was being kicked out of the S&P/ASX All-Tech Index (ASX:XTX).

Additionally, in the wider economic world, inflation and rising interest rates have grabbed the headlines and attracted the attention of investors.

In June 2022, the Reserve Bank of Australia (RBA) raised its interest rate by 50 basis points, or 0.5%, and it did so again in July with another 50 basis point increase today.

While higher interest rates theoretically hurt valuations, it’s also possible that investors think demand for Adore Beauty products could suffer if households have less money to spend on non-essentials.

However, Adore Beauty may have reason to be somewhat confident about the situation. With the release of the company’s third quarter FY22 update, CEO Tennealle O’Shannessy said:

Beauty, especially skincare, is unique in the broader retail market and resilient to economic challenges. Our products are used daily by customers, who consider these items essential and repurchase them frequently. The nature of high-end beauty means that our customers spend more as they grow on the platform, with loyal customers typically contributing over 70% of total revenue.

And after?

The last investors Adore Beauty heard from was the third quarter of FY22, where revenue grew 9% year-over-year to $42.7 million and active customers grew 7% to 880,000 .

Next month, Adore Beauty will release its 2022 financial results for the 12 months through June 30, 2022. It may also include a business update to update investors on its performance in the first weeks of FY23.

Adore Beauty Snapshot

While the company’s share price has fallen in recent months, since early July it has risen more than 4%.