Revolution Beauty says trading softer than expected but tariff news is good
Revolution Beauty Group issued a trading update for the 12 months to the end of February (FY25) on Tuesday and said revenue fell 26% during the year.
And while it had expected double-digit net sales declines to continue into Q1 of FY26, driven by the remaining impact of SKU discontinuations, March and April have been 'even softer" than planned.
This is due primarily to 'performance weakness in pureplay digital retailers (excluding Amazon that continues to grow significantly) and weakened consumer confidence impacting USA performance'.
It didn't specify how bad the decline has been overall but did say that it's 'encouraged by sales from the rejuvenated New Product Development SKUs launched in February 2025 and plans to build on this success by expanding the digital fast-track programme in the second half of FY26'.
Looking back at FY25, the multi-channel mass beauty brand said it was a transformational year for it, during which it discontinued over 6,000 SKUs 'to create a scalable and profitable foundation for future growth'. The company continues to transition its global retailers onto this core set of products.
Revenues for FY25 closed at £141.6m, down 26% year-on-year as mentioned, 'reflecting the rationalisation of the product and brand portfolio. Softness in the US market and on digital channels, as previously reported, continued into January and February 2025'.
It's expecting to report underlying adjusted EBITDA of between £6 million and £6.5 million for the year.
As referred to earlier, FY26 has started off weakly but with some encouraging signs. A recent Kantar study confirmed that 'consumer consideration to buy Revolution Beauty has significantly increased over the last 12 months in the UK, suggesting that the focused brand activity is improving brand health and competitiveness for the future'.
In its home market, the brand is now fourth in the ranking of considered brands for make-up, up from sixth 12 months ago. Management 'plans to carefully invest marketing in core markets to drive sales conversion from this encouraging progress'.
It has also received its first orders for its new Relove budget make-up brand 'designed for value and the grocery channel and is expanding efforts to accelerate this profitable brand at pace across the year'.
The company has expanded its retail distribution footprint for its master brand Revolution into major global retailers including Walmart and DM Germany and supplemented it with a new Revolution skincare range targeted at the brand's core Gen Z customer.
Given the slower start to the year than planned, 'management continues to reduce costs in line with performance and to capture the benefits of having a simplified product and brand portfolio'.
Action it's taking should 'significantly mitigate' the impact of lower sales on FY26 EBITDA.
As for tariffs, it said it 'very much welcomes' the weekend's news that imports to the US from China will be subject to much lower tariffs than previously proposed. In FY25, 23% of the firm's sales were generated in the US market with around 60% of its company's products sold there being manufactured in China.
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