Following a turbulent two years, Revolution Beauty stated today that its new strategy unveiled in February was already showing good progress in improving profitability and working capital efficiency.
The renewed focus on its masterbrand and core product categories is aimed at enabling greater investment in new product development and marketing to return the business to growth and become a global top-five player in the mass beauty market.
Results show the cosmetics retailer made a pre-tax profit of £11.4m in the year to 29 February 2024 compared to a loss of £33.9m in the previous period. Adjusted EBITDA came in at £12.6m after a £7.5m loss last year. EBITDA margin was 6.7% (FY23: negative 4.0%) due to the improved gross margin, controlled reductions in marketing spend, and reductions in distribution costs.
Revolution Beauty’s sales were up 2% to £191.3m, including the impact of product clearance activity in the first half. The group noted that strong performance in its Rest of World division more than offset weakness in the US and e-commerce.
For the year ahead, the company expects revenues to decline year-on-year in the first half at a slightly higher rate than in the second half of its last financial year, reflecting its more focused product portfolio and the impact of stock clearance in the first half of last year.
With a “reinvigorated innovation pipeline and opportunities to expand our offering and distribution network”, Revolution Beauty expects a return to revenue growth in the second half of the year. Benefitting from the group’s ongoing cost savings programme, adjusted EBITDA is forecast to be at least in line with last year’s.
Lauren Brindley, the former Walgreens VP who was appointed Chief Executive last year, commented: “FY24 was a year of great strategic and financial progress following two challenging years … Our new Reigniting the Revolution strategy is already delivering improvements across the business, strengthening our core and providing a much firmer platform from which to grow.
“As we progress through the new financial year, I am excited about the potential of our reinvigorated pipeline of innovation and the number of opportunities to expand our retail distribution globally. As the strategy continues to take effect, we expect to see a return to growth in the second half of the year. That will put us firmly on the right trajectory to achieving our ambition of being a top 5 player in the mass beauty market.”
