Revolution Beauty falls into losses after stock liquidation

Revolution Beauty suffered a loss in the first half following a restructuring of its strategy that has seen significant destocking activity and changes to its product portfolio.

The cosmetics retailer reported a pre-tax loss of £10.9m for the six months ending August, compared with a profit of £400,000 last year.

It recorded a one-off charge of £10.2m for offsetting discontinued inventory to generate cash.

Turnover fell by a fifth to £72.4m as the company simplified its product offering, going from seven brands in 11 categories to three in seven.

The changes form part of ‘Reigniting the Revolution’, the company’s strategy which aims to hit £1bn in annual revenue and become one of the world’s top five mass beauty brands by 2030.

Lauren Brindley, chief executive, said: “This is a transformational year 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.”

Underlying profits before unpleasantness rose 18 per cent to £3.9m during the half-year, thanks to lower operating costs.

Distribution expenses were reduced by a third to £8.9 million, while administration costs were 30 per cent lower at £10.9 million.

Meanwhile, sales of core ranges rose 16 percent in the second quarter and 6 percent overall during the period.

Revolution reiterated expectations that full-year revenue will fall “at a slightly slower rate” 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 anticipate this will accelerate into FY26.

“With good momentum in the underlying business, I remain very confident in Reigniting the Revolution’s strategy and our ability to become a top five mass beauty brand.”

Founded in 2014, the Kent-based company’s products are sold in many prominent UK retailers including Superdrug, Urban Outfitters and Debenhams, as well as online giants such as Amazon and Zalando.

It recently reached agreements to sell its products in more than 1,800 US-based Walmart stores and 850 stores owned by DM, Germany’s largest mass beauty company, starting in January 2025.

A 2022 investigation found that Revolution had inflated sales by £9 million to meet its annual targets.

This led to the suspension of trading of its shares on the London Stock Exchange for a few months and caused a massive drop in its valuation.

In 2023, Boohoo, Revolution’s largest shareholder, staged a coup against the company and successfully removed Chairman Derek Zissman, CEO Bob Holt, and CFO Elizabeth Lake from their respective positions.

Revolution Beauty Group Stock They rose 1.6 per cent to 13.9p on Tuesday morning, but are still around 54 per cent down since the start of the year.