Revolution Beauty eyes return to growth in early 2025 after sales tumble
Revolution Beauty expects a return to sales growth early next year as the troubled makeup brand makes progress on a strategy to turnaround its fortunes.
The London-listed firm said in a trading update that it was updating its outlook to forecast a return to growth in the fourth quarter of its 2025 financial year and an acceleration into 2026 as “new strategic growth initiatives take effect”.
Still, Revolution said it expected full-year sales to decline year on year “at a slightly slower rate” compared to the six months ending on 31 August 2024.
The first half of the financial year saw Revolution’s net sales come in at £72m, tumbling 20 per cent from the same period a year prior.
Revolution pinned the decline on significant stock clearing as part of a planned simplification of its product portfolio.
As a result, it revealed a one-off, non-cash stock provision of £11.3m, which was not reflected in Wednesday’s figures.
Revolution unveiled a new strategy in February to focus on its “masterbrand” and core product categories.
It said on Wednesday that net sales from its core product range grew six per cent in the half-year, with growth accelerating to 16 per cent in the second quarter compared to the prior year.
The firm added that its cost savings programmes remained “on track”. Operating costs, excluding marketing costs, dropped 31 per cent and administrative costs fell 25 per cent compared to last year.
Revolution said it expected underlying adjusted earnings before tax (EBITDA) to be “at least in line with” its 2024 financial year, as previously forecast prior to the one-off stock provision.
The update comes after a difficult period the firm. Revolution’s share price has tumbled 40 per cent so far this year and is down 89 per cent since the firm floated on the London Stock Exchange in July 2021.
Earlier this year, Revolution’s former boss Adam Minto agreed to pay the firm almost £3m to draw a line under a scandal that erupted in 2022.
The company was thrown into crisis when its auditors refused to sign off on its accounts for the previous year, leading to a suspension of its shares.
A subsequent investigation found that Revolution’s accounts had counted £10m of sales towards revenue that should not have been included.