Revolution Beauty plunges to a loss after inventory clear-out

Revolution Beauty slumped to a first-half loss following a strategy shake-up that has seen major stock clearance activity and changes to its product portfolio.

The cosmetics retailer reported a £10.9million pre-tax loss for the six months ending August, compared to a £400,000 profit last year.

It recorded a one-off £10.2million charge from clearing discontinued inventory to generate cash.

Turnover fell by a fifth to £72.4million as the company streamlined its product offering – moving from seven brands across 11 categories to three across seven.

The changes form part of ‘Reigniting the Revolution’, the firm’s strategy targeting £1billion in annual revenues and becoming one of the world’s top five mass beauty brands by 2030.

Lauren Brindley, chief executive, 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.’

Underlying earnings before nasties rose by 18 per cent to £3.9million over the half, thanks to lower operating costs.

Distribution expenses shrank by a third to £8.9million, while administration costs were 30 per cent lower at £10.9million.

Meanwhile, sales of core ranges expanded by 16 per cent in the second quarter and by 6 per cent overall during the period.

Revolution reiterated expectations for full-year revenue to fall ‘at a slightly lower rate’ than in the first half before accelerating in the 2026 financial year.

 Brindley said: ‘As these initiatives start to take effect, we expect a return to growth in Q4 and anticipate that this will accelerate through FY26. 

‘With good momentum in the underlying business, I remain highly confident in the Reigniting the Revolution strategy and in our ability to become a top five mass beauty brand.’

Founded in 2014, the Kent-based firm’s goods are sold by many prominent retailers in the UK, including Superdrug, Urban Outfitters and Debenhams, as well as online giants like Amazon and Zalando. 

It recently struck agreements to have its products sold in over 1,800 US-based Walmart stores and 850 shops belonging to DM, Germany’s largest mass beauty company, from January 2025.

A 2022 probe found that Revolution had inflated sales by £9million to meet annual targets.

This led to trading of its shares being suspended on the London Stock Exchange for some months and triggered a massive decline in its valuation.

In 2023, Boohoo – Revolution’s biggest shareholder – undertook a boardroom coup against the firm, successfully ousting chairman Derek Zissman, chief executive Bob Holt and finance boss Elizabeth Lake from their respective roles.

Revolution Beauty Group shares were 1.6 per cent up at 13.9p on Tuesday morning, but are still around 54 per cent down since the year started.