Revolution Beauty Group (REVB) H1 2025 earnings summary

Executive summary

• Revenue for H1 FY25 declined 20% year-over-year to £72.4m due to planned portfolio simplification and SKU discontinuation, with a strategic focus on core brands and SKUs.

• Underlying adjusted EBITDA rose 18% to £3.9m, with margin up to 5.5% from 3.7% year-over-year, despite lower sales and one-off stock provisions.

• Strategic transformation included reducing brands from seven to three, cutting SKUs from over 7,000 to about 1,100, and focusing on replenishable, high-performing products.

• Cost savings programs reduced admin costs by 30% and distribution costs by 33% in H1.

• Service levels improved from ~70% to over 90%, with new retail partnerships and innovation pipeline supporting future growth.

Financial highlights

• Underlying gross profit margin increased by 20bps to 46.2% year-over-year; gross margin maintained above 45%.

• Non-recurring stock provision charges of £10.2m were incurred for non-core inventory, impacting statutory results.

• Cash at 31 August 2024 was £6.3m; net debt stood at £25.5m.

• CapEx for FY25 expected to be around £2.5m, with just under £1m spent in H1.

• Digital revenues fell 30% to £12.7m; UK sales down 32%, US sales down 22%, Australia sales up 20%.

Outlook and guidance

• Sales expected to decline at a slower rate in H2, with a return to growth anticipated in Q4 and acceleration into FY26 as strategic initiatives take effect.

• Underlying adjusted EBITDA for FY25 expected at least in line with last year, excluding one-off stock provision.

• Net debt at year-end projected to be similar to last year, with inventory reduction programs supporting working capital.

• Strategic growth initiatives, innovation, and global expansion to drive future performance.

• No price increases in H1, but selective price actions may be considered in the future.