Revolution Beauty plunges to £10.9m loss, but says turnaround plan progressing

Revolution Beauty has taken a hit with a first-half loss as sales dropped 20%, although the company is reporting "encouraging progress" in its turnaround strategy.

The beauty brand, which sells across various platforms, reported pre-tax losses of £10.9m for the half-year ending August 31, compared to profits of £400,000 in the previous year. Despite a challenging six months that saw a fifth wiped off its revenues, dropping to £72.4m due to streamlining products and increased sale events to clear stock, the firm is witnessing positive movements.

This stumbling performance also included a substantial £10.2m write-down of excess inventory during its ongoing overhaul. Nevertheless, Revolution Beauty is buoyed by improvements with both existing and new retail partners, noting a 6% rise in "core" product range sales.

The latter part of the half saw this figure jump to 16%. Further boosting prospects, the beauty company has expanded into 250 Boots stores in the UK recently and anticipates major expansion in the US with Walmart planning to carry their full product line in over 1,800 stores starting next January.

CEO Lauren Brindley remains optimistic, stating: "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.

"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 reaffirmed that its sales are predicted to decline at a slower rate in the second half, with a resurgence in the final three months. This growth is expected to intensify in 2025-26.

Current full-year underlying earnings, excluding the stock write-off, are projected to be "at least in line with 2023-24". Under Ms Brindley’s leadership since August last year, Revolution Beauty has been undergoing a transformation to leave 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 plunged into crisis in 2022 when its auditors declined to approve its accounts for the previous year. This led to an investigation into the business and its shares being suspended from the London Stock Exchange.

Meanwhile, Revolution found itself in a conflict with Boohoo, which owns more than a quarter of the company’s shares, over demands to replace its leadership team.

The issues reached a peak with the resignation of its co-founder, Adam Minto, along with former CEO Bob Holt and chairman Derek Zissman.