Revolution Beauty returns to profit despite difficulties in US and e-commerce
28 Jun 2024 --- Revolution Beauty Group’s full-year results for the year ended February show a return to profitability and progress with its “Reigniting the Revolution” strategy.
The multi-channel mass beauty innovator reported a 2% year-over-year increase in sales to £191.3 million (US$242.1 million) for FY 2024. Strong performance in the Rest of World markets supported its growth, despite difficulties in the US and e-commerce sectors.
Thanks to improved profitability tactics and efficient inventory management, the company’s gross margin was 46.2%, an increase from 40.4% in FY23. Adjusted EBITDA also rose to £12.6 million (US$16 million), with a positive adjusted EBITDA margin of 6.7% versus a negative 4% the previous year.
Operating costs as a percentage of sales fell to 39.6% from 44.4%, indicating increased operational efficiency.
CEO Lauren Brindley said it was a year of great strategic and financial progress:
“Following two challenging years. I am extremely proud of what Team Revolution has achieved. Our new Reigniting the Revolution strategy already delivers improvements across the business, strengthening our core and providing a much firmer platform to grow.”
Revolution Beauty’s sales increased by 2% to £191.3m in FY 2024, driven by robust performance in Rest of the World markets.Future prospects
Revolution Beauty projects lower first-half revenues in FY25 due to strategic portfolio adjustments and the carryover effects of FY24’s stock clearance.
However, the business anticipates a return to revenue growth in the second half of the year thanks to a strong innovation pipeline and increased distribution opportunities.
“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-five player in the mass beauty market,” says Brindley.
Revolutionary strategy
Revolution Beauty concentrated on bolstering its core product categories and growing its global retail footprint under the “reigniting the revolution” strategy.
The business optimized stock turn by 47% to 2.2 by reducing gross inventory by 32%. Improved service levels in the second half of the year partly contributed to enhanced customer satisfaction across all retail channels.
Additionally, the group’s social media following increased from 5.9 million to 6.4 million.
Boardroom battles
After a year-long boardroom battle with its biggest shareholder, Boohoo Group, Revolution Beauty settled with its co-founder and former CEO, Adam Minto.
Revolution Beauty was to receive £2.9 million (US$3.7 million) from Minto, who resigned in November 2022 following an accounting probe. The settlement did not entail either party’s admission or acceptance of liability.
The company is repositioning itself after experiencing shareholder revolts, legal battles and suspension on the London Stock Exchange.
By Venya Patel
