Revolution Beauty has reported a further decline in revenue following a challenging few years, but is looking towards 2025 for a revival with its 'core' brands.
The group's revenue dropped by 20 per cent, a result of the "planned simplification of the product portfolio and the discontinuation of unproductive SKUs [stock]", according to Revolution, as reported by .
The company noted that revenue growth from its 'core' range of stock – 1,058 products – was six per cent in the first half of the year, and 16 per cent in the second quarter.
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Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 18 per cent, largely due to an extensive cost-cutting programme which reduced distribution costs by 33 per cent and administrative costs by 30 per cent year on year.
Gross profit nearly halved, dropping from £44.7m to £23.2m, while the company’s operating loss widened from £0.5m to £9.8m. "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," said Lauren Brindley, group chief executive officer.
"Since launching our new strategy in February, we have substantially cut a long tail of unproductive SKUs, improved our operational delivery and made good progress with our cost savings programmes... we now have a core portfolio that is growing globally with a significantly improved underlying gross margin," she added.
The update follows a challenging period for the company. Revolution's share price has plummeted 53 per cent this year and is down 91 per cent since the company was listed on the London Stock Exchange in July 2021.
The firm reiterated its forecast that annual sales would see a year-on-year decrease, albeit at a slightly slower pace than in the first half of the year, with growth expected to resume in the fourth quarter. It anticipated that "several" of the company’s new strategic growth initiatives would start to have an impact, and predicted this growth would "accelerate through [next year]".
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"We have a strong pipeline of growth initiatives, including new and expanded retailer relationships, a reinvigorated pipeline of make-up innovation, the launch of our new skincare range and the global expansion of our budget brand, Relove."
"As these initiatives start to take effect, we expect a return to growth in [the fourth quarter] and anticipate that this will accelerate through [the next financial year]. 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," Brindley added.