After a challenging financial year, Revolution Beauty is setting its sights on recovery with a new strategic approach.
- The company forecasts a return to sales growth in Q4 2025, driven by strategic initiatives.
- A notable sales decline resulted from a planned product portfolio simplification, impacting net sales.
- Operational cost savings have been significant, with administration and other costs reduced considerably.
- Despite challenges, Revolution projects earnings before adjustments to meet expectations.
Revolution Beauty, a London-listed company, is poised for a resurgence in sales growth by the fourth quarter of its 2025 financial year. This anticipated recovery stems from new strategic growth initiatives that are expected to gain momentum into 2026. However, the company’s full-year sales are predicted to decline on a year-on-year basis, albeit at a slower rate compared to the initial six months ending on August 31, 2024.
During the first half of this financial year, Revolution Beauty experienced a significant drop in net sales, reaching £72 million, which marks a 20% decrease from the previous year. This decline was primarily due to substantial stock clearances as part of a deliberate strategy to simplify its product portfolio. This decision led to a one-time, non-cash stock provision of £11.3 million, which was omitted from the recent financial disclosures.
Earlier in the year, the company unveiled a strategic focus on its ‘masterbrand’ and core product categories. This approach has shown positive early results, with net sales from these core areas rising by 6% in the first half of the year. Notably, growth accelerated to 16% during the second quarter compared to the previous year.
Revolution Beauty’s cost-saving measures are reportedly on track, with a 31% reduction in operating costs, excluding marketing, and a 25% decrease in administrative costs compared to the previous year. These efforts align with the company’s forecast that its underlying adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) will at least meet expectations for the 2024 financial year, aside from the one-time stock provision.
Despite these operational strides, the company faces ongoing challenges, including a significant drop in its share price, which has decreased by 40% since the start of the year. The stock has suffered an 89% loss since the company’s initial public offering on the London Stock Exchange in July 2021. Adding to the company’s woes, former executive Adam Minto agreed to a settlement of nearly £3 million due to disputes stemming from a 2022 scandal. This was prompted by revelations of financial misreporting when auditors refused to approve the company’s accounts from the previous year, halting the trading of its shares subsequently.
Revolution Beauty remains optimistic about its recovery and growth despite past challenges.
