By Katherine Hamilton

Oddity Tech shares fell after the cost of acquiring customers shot up in the first quarter, denting the company's sales outlook.

The stock slumped 28% to $10.09 in premarket trading Tuesday. Through Monday's close, shares were down 65% this year.

The technology platform for beauty brands said its cost per acquisition increased sharply in the most recently ended quarter, in some cases reaching levels two times higher than what management had expected.

Cost per acquisition with Oddity's biggest advertising partner increased suddenly in the first quarter. Oddity said it is seeing higher bounce rates, which it thinks could be because the algorithm is serving its advertisements to lower-quality audiences.

Sales in the first quarter fell 26% to $197.9 million. Oddity swung to a loss of $21.4 million, or 38 cents a share, compared with a profit of $37.8 million, or 63 cents a share, the year before.

The change in cost per acquisition led to a decline in the first orders during the quarter, which Oddity said will negatively impact the rest of the year.

Oddity expects second-quarter revenue to decline 25% to 30% year over year.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

June 02, 2026 08:11 ET (12:11 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.