"While Oddity doesn’t engage with self-interested short sellers and hostile interests, the level of deep misinformation in this report cannot go unanswered," the company announced today, following a severely negative short-seller analysis from Ningi Research.
"While Oddity doesn’t engage with self-interested short sellers and hostile interests, the level of deep misinformation in this report cannot go unanswered," the company announced today, following a severely negative short-seller analysis from Ningi Research.
Among the researchers' key allegations is the contention hat Oddity "owns and operates a completely undisclosed, yet material, brick-and-mortar business in Israel," including 43 stores and six beauty schools "which have never been disclosed to investors in SEC filings."
Oddity counters that the "brick-and-mortar business in Israel ... represents an immaterial part of our business, accounting for less than 5% of Oddity's net revenue and less than 5% of Oddity's EBITDA in both FY2023 and Q1 2024. The Israeli business operations have always been reflected in our financial disclosures. All of ODDITY’s revenue outside of Israel is exclusively from online sales."
Ningi also alleges that Oddity has two CFOs, "one from the U.S. as a front for investors and secret one from Israel actually running the business."
This allegation isn't mentioned in Oddity's response.
Nor is Ningi Research's contention that, rather than 342 employees as publicly disclosed, Oddity has 400 employees in Israel and, globally, in total, 600-700.
The researchers also allege that Oddity's digital growth, which Oddity claims is powered by markets outside of Israel, is due to "non-cancelable subscriptions."
The report claims, "Complainants constantly report that their accounts were charged, despite never purchasing a product or hearing about the company before."
These disputes have reportedly led to lawsuits, as well as more than two hundred complaints, including seven class action suits.
Oddity counters, "The overwhelming majority of the 'hundreds of lawsuits' mentioned in the report are small-claims suits related to our stores’ business in Israel. In the aggregate these total less than $100,000."
"Oddity firmly stands behind its strong and positive customer experience, as evident by the tens of thousands of 4 and 5 star reviews on many independent review websites," per Oddity, "such as Trustpilot.com, Google, etc. As Oddity stated on its earnings call–it is important to understand that the consumer claims represent a fraction of a percent of our sale volume. Oddity will always continue to address incidents of dissatisfaction and keep its customers satisfied and loyal."
Following the report, a number of law firms have begun exploring possible action, including Holzer & Holzer and Bronstein, Gewirtz & Grossman.
In its latest financials, Oddity reported Q1 net revenue of $212 million, up 28% year-over-year.
The company said it expected to generate more than 20% revenue growth and more than 20% adjusted EBITDA margin for full-year fiscal 2024. This included a net revenue range of $626-635 million.