Revolution Beauty Charts Path to Recovery After Challenging First Half

Revolution Beauty Group has reported a challenging first half, with its latest half-year results to late August revealing significant declines across key financial metrics. The multi-channel mass beauty brand experienced a substantial downturn, indicating a tough operational period for the business.

During the six-month period, revenue plummeted by 31.8% to £49.4 million, while gross profit saw a similar reduction, landing at £15.9 million. Despite these drops, the gross margin increased marginally from 32% to 32.2%, and operating costs were trimmed by nearly 4%. However, these minor improvements were overshadowed by a widening adjusted EBITDA loss, which nearly doubled to £12.5 million from £6.3 million the previous year. The company's operating loss expanded considerably from £9.8 million to £16.7 million, with the loss before tax growing from £10.9 million to £18.4 million. Furthermore, net debt climbed by almost £5 million, exceeding £30 million.

The company attributed the significant revenue decline primarily to ongoing disruption stemming from prior-year strategic and operational issues. Transitional challenges also weighed heavily on net sales, notably the strategic shift from the 'Relove' brand to 'Revolution' at Walmart. This transition reportedly led to short-term softness in sales and a dip in operational efficiency during the period. The minimal increase in gross margin was also linked to clearance sales executed by the previous management team, an effort to generate cash prior to the company's recent refinancing.

Subsequent to the reporting period, Revolution Beauty undertook a crucial equity raise, which, alongside debt refinancing, was aimed at strengthening the balance sheet and restoring financial stability. A pivotal development just days before the period's end was the announcement of the proposed return of the company's founders: Tom Allsworth as CEO and Adam Minto in a consultancy role. This leadership change was highlighted as a key factor in the successful debt and equity refinancing efforts.

Since the period end, the return of the founders has injected renewed energy, clear leadership, and a distinct strategy into the business. This move has been positively received by wholesale partners, leading to encouraging early signs of sales stabilization. Demonstrating rapid progress, the group returned to generating positive EBITDA in September and October, a direct result of early actions taken to manage costs effectively under the new leadership.

The new management team is resolutely focused on restoring sales momentum, enhancing financial discipline, and rebuilding stakeholder confidence. Key operational priorities include a comprehensive effort to rebuild product ranges, optimize pricing strategies, and accelerate speed to market, aiming to revive the core strengths that initially drove Revolution Beauty's success. Early steps have already been taken to identify exciting new product development (NPD) opportunities slated for launch in Spring 2026. Furthermore, a significant headcount reduction has been implemented, decreasing staff from 205 (excluding production) as of March 1st to 123 currently, effectively right-sizing the organization for its current scale of operations and enhancing agility. Management has also successfully negotiated price adjustments with US retailers to mitigate tariff costs, a move expected to yield benefits in the upcoming financial year.

Despite the positive actions, the business issued a profit warning, acknowledging that the first-half performance under previous management was worse than anticipated. Consequently, full-year sales and adjusted EBITDA will not meet the guidance provided on August 22nd. However, the proactive measures taken by the new management to right-size the cost base, establish realistic budgets, and meticulously manage stock have already seen the business return to EBITDA profitability. With these foundational actions and a new strategy in place, the company anticipates establishing an Adjusted EBITDA run rate by the end of FY26 in line with previous guidance of £8 million-£10 million, projecting an Adjusted EBITDA outturn for the second half of FY26 in the region of £4 million.

Commenting on the results, CEO Tom Allsworth stated, “Although I was not part of the business during the six-month reporting period, it is clear that the group faced a number of significant challenges. I recognise the impact this has had on our people, our partners and our performance. However, with the actions taken since the period end, we have laid the foundations for a more disciplined, focused and resilient business.”