Revolution Beauty back on track and UK and US sales strengthen

By

Sandra Halliday

Published
Nov 14, 2023

Revolution Beauty seems to be bouncing back from its recent troubles with first-half FY24 revenue up 20% and a “strong improvement in EBITDA, up £14.3 million, due to higher sales volumes, gross margins and cost reduction initiatives”.

The company’s recent past has been turbulent with its shares suspended from trading, an unhappy major shareholder (Boohoo Group) agitating for change, and a management team clearcut.

But the six months to 31 August saw group revenue up by a fifth at £90.4 million, “driven by growth across all regions and softer H123 comparatives”.

The gross margin improved to 49%, “with significant improvement in freight rates, improving stock control and more focused New Product Development (NPD)”.

Adjusted EBITDA of £6.4 million was much better than the equivalent loss of £7.9 million a year earlier. And the operating loss decreased to £0.5 million from a loss of £12.5 million in the previous period.

Gross inventory reduced by £38.9 million due to improved controls over product assortment, alongside a discontinued stock clearance programme.

The company said that highlights of the period included its “strengthened and refreshed board and management team”. That saw Lauren Brindley appointed Group CEO, Alison Hollingsworth CMO, and Steve Vanoli COO, as well as new non-execs joining the board “after engagement with major shareholders”.

But what was behind the increased sales during the period?

The company said it increased the number of doors worldwide through new retail relationships, expanded existing relationships and entered new territories. US store revenue grew 8% due to a new partnership with Walmart, while UK stores revenue grew 13% with “strong performances across Boots and Superdrug”.

Rest of the world stores revenue was up 58%, although that spectacular growth was “primarily due to weak comparative revenue in Germany and Turkey”.

And while the crucial Christmas trading period is still to come, the group is upgrading its guidance for the full year and now expects adjusted EBITDA to be not less than double-digit millions for FY24 (an increase from the previously guided high-single-digit millions).

Lauren Brindley said of all this: “Since joining Revolution Beauty, I have seen first-hand the strength of the Revolution brand, the brilliance of my colleagues and the enduring relevance of our product offer. It is these aspects which have supported the business over the past 18 months, and which I am confident will unlock future opportunities.

“With improved internal controls and the right leadership in place with clearer roles and responsibilities, momentum has built across the business in the first half of the year. Our strengthened financial performance and the return to positive EBITDA represents a significant milestone in the next phase of this business, while new retail partnerships in the US and strengthened retail partnerships elsewhere around the world are representative of our operational progress.

“Looking ahead, I believe there are significant and compelling opportunities for Revolution Beauty within a large and attractive market. While there is still lots to do, we are on the right trajectory, and I am developing a strategic plan with our new executive leadership team to ensure we are best-placed to deliver future growth. I look forward to sharing this vision and more detail on our plans early in the New Year.”