Revolution Beauty returns to profit after ‘challenging’ two years
The group’s return to profitability comes as it carried out a new strategy to focus on the Revolution Masterbrand and core product categories
Revolution Beauty has returned to profit in its latest full-year results, as the group reaped the benefits of its ongoing strategic plan to focus on core product categories. In the year ended 29 February 2024, profit-before-tax hit £11.4m, up from a loss of £33.9m the prior year. Revenues rose slightly over the period, by 2% to £191.3m, though online sales fell as more shoppers continued to return to the high street.
Revenue performance also varied across different geographies. In the UK, sales declined by 6.7%, although UK store revenue actually grew. In the US, sales fell by 14.8%, driven by store group revenue declines as the US business went through a “period of volatility”.
Nonetheless, adjusted EBITDA hit £12.6m over the year, up from a loss of £7.5m, thanks to improved gross margin, controlled reductions in marketing spend and reductions in distribution costs.
The group’s return to profitability comes as it carried out a new strategy to focus on the Revolution Masterbrand and core product categories. The strategy, which was unveiled in February of this year, is “already showing good progress” in improving profitability, according to the group.
It added that the strategy will allow for more investment into new product development, as well as more marketing to help the business return to growth.
In FY25, the group expects revenues to fall year-on-year in the first half at a slightly higher rate than in the second half of FY24, reflecting a “more focused” product portfolio and the impact of stock clearance in the first half of FY24.
With a reinvigorated innovation pipeline and opportunities to expand our offering and distribution network, we expect a return to revenue growth in the second half of the year. Benefitting from the Group’s ongoing cost savings programme, Adjusted EBITDA for FY25 is expected to be at least in-line with FY24 with a significant weighting to the second half.
CEO Lauren Brindley said: “FY24 was a year of great strategic and financial progress following two challenging years. I am extremely proud of what Team Revolution has achieved. Our new Reigniting the Revolution strategy is already delivering improvements across the business, strengthening our core and providing a much firmer platform from which to grow.
“As we progress through the new financial year, I am excited about the potential of our reinvigorated pipeline of innovation and the number of opportunities to expand our retail distribution globally. As the strategy continues to take effect, we expect to see a return to growth in the second half of the year. That will put us firmly on the right trajectory to achieving our ambition of being a top 5 player in the mass beauty market.”
