Latest news with #RevolutionBeautyGroup
Fashion Network
13-05-2025
- Business
- Fashion Network
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.
Fashion Network
13-05-2025
- Business
- Fashion Network
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.
Yahoo
28-03-2025
- Business
- Yahoo
Should You Investigate Revolution Beauty Group plc (LON:REVB) At UK£0.13?
Revolution Beauty Group plc (LON:REVB), is not the largest company out there, but it saw a significant share price rise of 25% in the past couple of months on the AIM. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. However, what if the stock is still a bargain? Let's examine Revolution Beauty Group's valuation and outlook in more detail to determine if there's still a bargain opportunity. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. The stock seems fairly valued at the moment according to our valuation model. It's trading around 8.6% below our intrinsic value, which means if you buy Revolution Beauty Group today, you'd be paying a reasonable price for it. And if you believe that the stock is really worth £0.14, then there isn't much room for the share price grow beyond what it's currently trading. Although, there may be an opportunity to buy in the future. This is because Revolution Beauty Group's beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity. See our latest analysis for Revolution Beauty Group Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Revolution Beauty Group, at least in the near future. Are you a shareholder? REVB seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed. Are you a potential investor? If you've been keeping an eye on REVB for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there's less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven't considered today, which can help gel your views on REVB should the price fluctuate below its true value. If you'd like to know more about Revolution Beauty Group as a business, it's important to be aware of any risks it's facing. Our analysis shows 3 warning signs for Revolution Beauty Group (2 are concerning!) and we strongly recommend you look at these before investing. If you are no longer interested in Revolution Beauty Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
15-02-2025
- Business
- Yahoo
An Intrinsic Calculation For Revolution Beauty Group plc (LON:REVB) Suggests It's 46% Undervalued
Using the 2 Stage Free Cash Flow to Equity, Revolution Beauty Group fair value estimate is UK£0.21 Revolution Beauty Group is estimated to be 46% undervalued based on current share price of UK£0.11 Analyst price target for REVB is UK£0.50, which is 139% above our fair value estimate Today we will run through one way of estimating the intrinsic value of Revolution Beauty Group plc (LON:REVB) by taking the expected future cash flows and discounting them to their present value. We will use the Discounted Cash Flow (DCF) model on this occasion. Believe it or not, it's not too difficult to follow, as you'll see from our example! Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. See our latest analysis for Revolution Beauty Group We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) -UK£3.01m UK£280.2k UK£3.70m UK£4.61m UK£5.45m UK£6.17m UK£6.79m UK£7.31m UK£7.76m UK£8.14m Growth Rate Estimate Source Analyst x2 Analyst x2 Analyst x2 Est @ 24.82% Est @ 18.07% Est @ 13.34% Est @ 10.02% Est @ 7.71% Est @ 6.09% Est @ 4.95% Present Value (£, Millions) Discounted @ 9.9% -UK£2.7 UK£0.2 UK£2.8 UK£3.2 UK£3.4 UK£3.5 UK£3.5 UK£3.4 UK£3.3 UK£3.2 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = UK£24m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 9.9%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£8.1m× (1 + 2.3%) ÷ (9.9%– 2.3%) = UK£110m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£110m÷ ( 1 + 9.9%)10= UK£43m The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is UK£67m. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of UK£0.1, the company appears quite undervalued at a 46% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Revolution Beauty Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.9%, which is based on a levered beta of 1.474. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Strength Debt is well covered by earnings and cashflows. Weakness No major weaknesses identified for REVB. Opportunity Has sufficient cash runway for more than 3 years based on current free cash flows. Good value based on P/S ratio and estimated fair value. Threat Total liabilities exceed total assets, which raises the risk of financial distress. Revenue is forecast to decrease over the next 2 years. Whilst important, the DCF calculation is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Can we work out why the company is trading at a discount to intrinsic value? For Revolution Beauty Group, there are three relevant elements you should look at: Risks: As an example, we've found 3 warning signs for Revolution Beauty Group (2 can't be ignored!) that you need to consider before investing here. Future Earnings: How does REVB's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the AIM every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
