Revolution Beauty H1 sales fall 20% amid portfolio shake-up
Excluding stock provisions, the group’s underlying EBITDA stood at £3.1m in the first half, marking a slight reduction from £3.5m in HY24
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Revolution Beauty has reported that total net sales fell by 20% to £72m in the first half ended 31 August, due to a “planned simplification” of its product portfolio and the associated discontinuation of unproductive stock keeping units (SKUs).
The decline also reflects the group’s “significant” stock clearance activity in the first half of FY24.
By contrast, net sales from Revolution Beauty’s core range of SKUs rose by 6% in the first half, with growth accelerating to 16% in the second quarter against the same period last year.
Excluding stock provisions, the group’s underlying EBITDA stood at £3.1m in the first half, marking a slight reduction from £3.5m in HY24.
That said, the group’s underlying sales channel margins improved as efficiencies and cost savings were achieved from running a simplified brand portfolio.
What’s more, Revolution Beauty stated that its cost savings programmes remain on track, with operating costs, excluding marketing costs, decreasing 31% and administrative costs decreasing 25% year-on-year.
As a result, the group has determined that it is necessary to recognise a one-off, non-cash stock provision of £11.3m in the first half to reflect the Net Realisable Value of the remaining old inventory, which will be excluded from underlying adjusted EBITDA. This will allow management to realise value and generate cash for future operations.
Sales for FY25 are now expected to decline year-on-year at a slightly slower rate than in H1, with a return to growth in Q4 as a number of the group’s new strategic growth initiatives take effect.
Lauren Brindley, CEO of Revolution Beauty, 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 Q4, 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.”
She added: “I remain highly confident that our Reigniting the Revolution strategy will deliver attractive, long-term, profitable growth.”
