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Cosmetics brand Revolution Beauty has revealed tumbling first half sales amid an overhaul but said it is set to return to growth in its fourth quarter as the turnaround starts to pay off.
The group said net sales plunged by a fifth to £72 million in the six months to August 31 as it simplified its product offering and ramped up clearance promotions to shift old stock.
It also revealed an £11.3 million write-off on old stock as it continues the shake-up.
Underlying earnings, excluding the stock write down, fell 11% to £3.1 million in its first half.
But the firm – which sells make-up, skincare, hair and body products online and through concessions – said sales of refreshed core ranges rose 6% in the half year, with growth of 16% in the second quarter.
It now expects sales for the full year to fall at a slower pace in the second half, with a return to growth in the final three months.
“This growth is expected to accelerate through 2025-26,” it said.
We expect a return to growth in the fourth quarter, as we begin landing our new growth initiatives, including a reinvigorated pipeline of make-up innovation, the launch of our new skincare range and the global expansion of our budget brand, Relove
Lauren Brindley, Revolution chief executive
Full-year underlying earnings are expected to be “at least in line with 2023-24”, as previously guided, it added.
Lauren Brindley, Revolution Beauty chief executive and former Walgreens vice president, said: “This year is a transformational year for the company, as we focus on simplifying the business, improving our operational efficiency and positioning ourselves for profitable and sustained success.
“We expect a return to growth in the fourth quarter, as we begin landing our new growth initiatives, including a reinvigorated pipeline of make-up innovation, the launch of our new skincare range and the global expansion of our budget brand, Relove.”
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.
Ms Brindley’s appointment ushered in a new phase for the group as she set her sights on transforming the brand and drawing a line under the historic issues.
She has since been simplifying the brand, reducing what it said was an “excess volume” new products being launched in order to focus on its core cosmetics.
Ms Brindley has also been cutting costs, with operating expenses down by 31% and administration costs falling by a quarter in the firm’s first half.
