Revolution Beauty swings to loss as revenue slides

19th Nov 2024 09:56

(Sharecast News) - Revolution Beauty said on Tuesday that it swung to a loss in the first half as revenue slumped but also hailed good progress with its cost savings programme.

In the six months to the end of August, the group swung to a pre-tax loss of £10.9m from a profit of £400,000 in the same period a year earlier. Revenue fell 20% to £72.4m, partly due to the planned simplification of the product portfolio and the discontinuation of unproductive stock-keeping units (SKUs).

The cosmetics firm said it also reflected "significant" stock clearance activity in the first half of the year.

Revolution said the results were affected by one-off stock provision charges relating to non-core stock of £10.2m as it focused on clearing "slow-moving discontinued inventory" from previous years to generate cash.

The company reiterated guidance for FY25 sales to decline year-on-year at a slightly lower rate than in the first half, with a return to growth in the fourth quarter as several of its new strategic growth initiatives take effect.

It also said that underlying adjusted EBITDA is expected to be at least in line with FY24 as previously guided.

Chief executive Lauren Brindley 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.

"Since launching our new strategy in February, we have substantially cut a long tail of unproductive SKUs, improved our operational delivery and made good progress with our cost savings programmes. Consequently, we now have a core portfolio that is growing globally with a significantly improved underlying gross margin.

"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 Q4 and anticipate that this will accelerate through FY26."