Revolution Beauty suffers a loss after stock clearance
- The retailer reported a pre-tax loss of £10.9 million in the six months ended August
- Turnover fell by a fifth to £72.4 million as the company streamlined its product offering
Revolution Beauty slumped to a loss in the first half of the year after a strategy change that led to major stock clearing activities and changes to the product portfolio.
The cosmetics retailer reported a pre-tax loss of £10.9 million for the six months ended August, compared with a profit of £400,000 last year.
A one-off charge of £10.2 million was recorded as a result of clearing discontinued inventory to generate cash.
Turnover fell by a fifth to £72.4 million as the company streamlined its product offering – from seven brands in eleven categories to three in seven.
The changes are part of ‘Reigniting the Revolution’, the company’s strategy which aims to achieve annual turnover of £1 billion and become one of the top five beauty brands in the world by 2030.
Lauren Brindley, CEO, said: ‘This has been a year of transformation for Revolution Beauty, and our performance in the first half reflects the steps we have taken to position the group for long-term profitable growth.’
Pre-nasties underlying profit rose 18 per cent to £3.9m in the half year, thanks to lower operating costs.
Tough result: Revolution Beauty slumped to a first-half loss after sales plummeted due to major inventory clearing activities and product portfolio changes
Distribution costs fell by a third to £8.9 million, while administration costs were 30 percent lower at £10.9 million.
Meanwhile, core range sales grew 16 percent in the second quarter and 6 percent overall during the period.
Revolution reiterated expectations that full-year sales would decline “at a slightly lower pace” than in the first half, before accelerating in fiscal 2026.
Brindley said: ‘As these initiatives begin to take effect, we expect a return to growth in the fourth quarter and expect this to accelerate in FY26.
‘With good momentum in the underlying business, I remain very confident in the Reigniting the Revolution strategy and in our ability to become a top five mass beauty brand.’
Founded in 2014, the Kent-based company’s products are sold by many of Britain’s leading retailers, including Superdrug, Urban Outfitters and Debenhams, as well as online giants such as Amazon and Zalando.
It recently signed deals to sell its products in more than 1,800 U.S. Walmart stores and 850 stores of DM, Germany’s largest mass beauty company, from January 2025.
A 2022 study found that Revolution had inflated sales by £9 million to meet annual targets.
This led to trading of its shares on the London Stock Exchange being suspended for several months, leading to a massive drop in its valuation.
In 2023, Boohoo, Revolution’s largest shareholder, staged a boardroom coup against the company, successfully ousting chairman Derek Zissman, CEO Bob Holt and finance boss Elizabeth Lake from their respective positions.
Revolution Beauty Group shares were 1.6 percent higher at 13.9 pence on Tuesday morning, but are still down around 54 percent since the start of the year.
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