Revolution Beauty sales and profits have dipped amid ‘transformational year’

For the six months to August 31, 2024, Revolution Beauty reported underlying adjusted EBITDA of £3.1m compared to £3.5m during the same period last year.

Total net sales during the first half dropped 20% to £72m despite the retailer’s core product range growing 6%.

Revolution Beauty noted a one-off, non-cash stock provision of £11.3m that was excluded from adjusted EBITDA and resulted from its bid to clear old inventory.

The retailer said it made “encouraging progress” during the period as it continues with its ‘Reigniting the Revolution’ business strategy.

Revolution Beauty also announced the expansion of its partnership with Boots, which will see it launch in 250 new stores in the UK this month.

Revolution confirmed a new partnership with German beauty giant DM Germany and will launch in more than 850 of its stores in January, while the company has expanded its partnership with Walmart in the US and has plans to launch an Amazon US shop next year.

In terms of outlook, Revolution Beauty said full-year sales are expected to decline year on year at a “slightly slower rate” than in the first half.

The beauty retailer plans to “return to growth” during the fourth quarter and expects adjusted EBITDA to be “at least in line with FY24” as previously pledged.

Chief executive Lauren Brindley said: “In the last six months, we have made great progress in our Reigniting the Revolution strategy. We have reduced our SKU portfolio significantly, enabling improved underlying gross margin performance, on a core set of SKUs that are growing globally.

“This year is a transformational year for the company, as we focus on simplifying the business, improving our operational efficiency and positioning ourselves for profitable and sustained success.

“We expect a return to growth in Q4, as we begin landing our new growth initiatives, including a reinvigorated pipeline of make-up innovation, the launch of our new Skincare range and the global expansion of our budget brand Relove.

“I remain highly confident that our Reigniting the Revolution strategy will deliver attractive, long-term, profitable growth.”