Cosmetics brand Revolution Beauty has swung to a first-half loss after seeing sales slump by 20%, but said it was seeing “encouraging progress” in its revamp plan.
The group reported pre-tax losses of £10.9 million for its half-year to August 31 against profits of £400,000 a year earlier.
It follows a tough first half for the firm, with sales plunging by a fifth to £72.4 million as it simplified its product offering and ramped up clearance promotions to shift old stock.
The firm was also sent tumbling into the red after being hit by a £10.2 million write-off on old stock as it continues the shake-up.
But Revolution Beauty, which sells make-up, skincare, hair and body products online and through concessions, insisted it was making “encouraging progress with existing and new retailers”.
It saw sales of its “core” ranges rise 6% overall in the first half, with growth of these products picking up to 16% in the second quarter.
New retail tie-ups also include the group expanding into 250 new Boots stores across the UK last month, while US retail giant Walmart will stock a full range of Revolution Beauty products in more than 1,800 stores from next January.
We expect a return to growth in the fourth quarter and anticipate that this will accelerate through 2025-26
Lauren Brindley, group chief executive, said: “This is 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.”
She added: “As we look to the second half and beyond, we have a strong pipeline of growth initiatives, including new and expanded retailer relationships, a reinvigorated pipeline of make-up innovation, the launch of our new Skincare range and the global expansion of our budget brand, Relove.
“As these initiatives start to take effect, we expect a return to growth in the fourth quarter and anticipate that this will accelerate through 2025-26.”
The company reiterated that it sales are set to fall at a slower pace in the second half, with a return to growth in the final three months.
This growth is forecasted to ramp up in 2025-26.
Current full-year underlying earnings, excluding the stock write-off, are expected to be “at least in line with 2023-24”.
Under Ms Brindley’s leadership since August last year, Revolution Beauty has been undergoing a revamp to put a turbulent past couple of years behind it, including a dispute with its former boss and a spat with its shareholder Boohoo.
The company was thrown into crisis in 2022 when its auditors refused to sign off on its accounts for the previous year.
It led to an investigation into the business and its shares being suspended from the London Stock Exchange.
Meanwhile, Revolution became embroiled in a battle with Boohoo, which owns more than a quarter of the company’s shares, over demands to replace its leadership team.
The troubles culminated in the resignation of its co-founder, Adam Minto, as well as former chief executive Bob Holt and chairman Derek Zissman.
