Revolution Beauty is undergoing a significant transformation amidst a notable decline in its sales and profits.
- The company’s EBITDA has decreased by 11%, reflecting a challenging year for Revolution Beauty.
- A strategic reduction in the SKU portfolio is part of the company’s efforts to optimise resources.
- The retailer is expanding its presence with major partners to bolster distribution channels.
- Revolution Beauty forecasts a return to growth in the upcoming quarters as new initiatives are implemented.
Revolution Beauty is currently navigating a transformative phase, characterised by a decline in both sales and profits during the first half of the year. Its underlying adjusted EBITDA has fallen by 11% to £3.1 million, a reflection of the challenging market conditions and strategic adjustments. Total net sales experienced a substantial 20% decline, reaching £72 million. This decrease is largely attributed to the deliberate simplification of its product portfolio, which involved discontinuing less productive SKUs.
Despite the overall drop in sales, Revolution Beauty has reported a positive performance from its core range, which saw a 6% increase year-on-year in the first half, and an impressive 16% growth in the second quarter alone. This suggests that the company’s refined focus on core products is yielding favourable results amidst broader challenges.
Part of Revolution Beauty’s strategic manoeuvres includes an expansion of its partnership with Boots, which will now encompass 250 additional stores across the United Kingdom. This move aims to enhance the company’s distribution reach and maximise exposure within the domestic market. Further plans include strengthening its distribution network with Walmart, the owner of Boots, in January, and launching an Amazon shop to increase its accessibility.
The strategic plan, which commenced in February, follows a turbulent year marked by significant legal and financial challenges, including an accounting scandal that led to the company’s suspension from the London Stock Exchange. CEO Lauren Brindley remains optimistic, stating that, “In the last six months, we have made great progress in our Reigniting the Revolution strategy. We have reduced our SKU portfolio significantly, enabling improved underlying gross margin performance, on a core set of SKUs that are growing globally.”
The company anticipates a moderated decline in full-year sales compared to the first half and expects to return to growth in the final quarter. Revolution Beauty’s new growth initiatives include a rejuvenated pipeline of make-up innovation, launching a new skincare range, and expanding its budget brand, Relove, globally. Lauren Brindley expressed confidence, stating, “This year is a transformational year for the company, as we focus on simplifying the business, improving our operational efficiency and positioning ourselves for profitable and sustained success.”
Revolution Beauty is poised for growth as its strategic initiatives take root, reflecting a promising trajectory in the evolving market.
