Revolution Beauty anticipates a resurgence in sales growth early next year as the beleaguered makeup brand progresses with its turnaround strategy. The London-listed company, in a trading update, revised its outlook to predict a return to growth in Q4 of its 2025 financial year, and an acceleration into 2026 as "new strategic growth initiatives take effect".
However, Revolution expects full-year sales to fall year on year "at a slightly slower rate" compared to the six months ending on 31 August 2024, as reported by .
The first half of the financial year saw Revolution's net sales amount to £72m, a drop of 20 per cent from the same period the previous year. The decline was attributed to significant stock clearing as part of a planned simplification of its product portfolio.
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Consequently, it disclosed a one-off, non-cash stock provision of £11.3m, which was not included in Wednesday's figures.
In February, Revolution unveiled a new strategy focusing on its "masterbrand" and core product categories. It reported on Wednesday that net sales from its core product range grew six per cent in the half-year, with growth accelerating to 16 per cent in the second quarter compared to the prior year.
The company also stated that its cost savings programmes remained "on track". Operating costs, excluding marketing costs, decreased by 31 per cent and administrative costs fell by 25 per cent compared to last year.
Revolution has forecasted that its underlying adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) will be "at least in line with" its expectations for the 2024 financial year, as anticipated before the one-time stock provision.
The announcement follows a challenging phase for Revolution. The company's share price has plummeted by 40 per cent since the beginning of the year and stands at an 89 per cent loss since its initial public offering on the London Stock Exchange in July 2021.
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Earlier in the year, ex-chief Adam Minto agreed to pay nearly £3 million to the firm to settle disputes related to the scandal that emerged in 2022.
Revelations of crisis surfaced when auditors declined to approve the company's accounts for the preceding year, resulting in a halt in trading of its shares.
An ensuing inquiry disclosed that Revolution had inaccurately recorded £10 million in sales as revenue, which should not have been acknowledged.