GCIRevolution Beauty Group - HY2025 Trading Update
(REVB ) is a multi-channel beauty company focused on mass-market products. It operates across physical and digital retail channels, with a product portfolio that spans skincare, makeup, and budget beauty items.
Key Financial Metrics:
- Sales Decline: Total net sales for the first half of FY25 fell by 20% to £72 million, primarily due to a deliberate reduction of product lines and clearing out older inventory.
- Core SKU Growth: Despite overall sales dropping, sales from the core product range rose by 6% and gained momentum in Q2, growing 16% year-on-year.
- Adjusted EBITDA: Excluding stock provisions, underlying adjusted EBITDA was £3.1 million, slightly lower than the previous year’s £3.5 million. However, cost-cutting measures improved the margins within key sales channels.
- Stock Provisions: The company incurred a one-off, non-cash stock provision of £11.3 million to account for old inventory.
- Cash Position: Revolution Beauty had £6.8 million in cash and a fully drawn revolving credit facility of £32 million as of the end of August.
Strategic Developments and Future Outlook:
- Cost Efficiency: Cost-saving measures led to a 31% reduction in operating costs and a 25% decrease in administrative costs, despite an 8% increase in marketing investments to support core product growth.
- Retail Expansion: The company has made strides in expanding its presence, securing deals to launch in over 850 stores of DM in Germany and 1,800 Walmart stores in the US. Additionally, it will expand into 250 new Boots locations in the UK this October.
- Growth Projections: Revolution Beauty anticipates a return to growth in Q4, spurred by new initiatives and product launches, with accelerated growth expected into FY26.
View from Vox - Revolution Beauty Group plc: Navigating the Transformation
Revolution Beauty's latest update paints a picture of a company in transition, firmly focused on streamlining its product offerings and driving operational efficiencies. The 20% drop in sales in H1 2025, while significant, was not unexpected due to the planned elimination of
underperforming SKUs and clearance of old stock. Despite these headline numbers, there are several positive signs for investors.
The 6% growth in core SKU sales, which accelerated to 16% in Q2, shows that the company's focus on a leaner, more profitable portfolio is starting to pay off. Improved sales channel margins and substantial cost reductions further underscore Revolution Beauty's progress in optimising its operations. Marketing expenses have increased but this aligns with the company's goal of investing in its strongest assets for future growth.
One of the most compelling aspects of Revolution Beauty's strategy is its expansion into new retail partnerships across key markets. In the beauty industry, securing prime shelf space at retailers like Walmart and DM in Germany can be transformative. This broadening of reach could potentially enhance brand visibility and drive revenue growth as the company taps into large, established customer bases in both the US and Europe.
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