Revolution Beauty set for return to profit amid turnaround

Revolution Beauty is set to return to profit in its first half as the firm’s turnaround continues to gather pace.

The group, which sells make-up and cosmetics online and through concessions, said it expects to report half-year underlying earnings of “not less than” £2 million – in a marked recovery after reporting losses of £12.5 million a year earlier.

It said it had boosted profit margins despite ramping up discounts to shift discontinued brands and bolster its cash flow, thanks to ongoing efforts to rein in costs.

Online sales jumped 22% in the first half, although it said overall revenues were “broadly” in line with a year ago.

Revolution Beauty shares surged 12% in morning trading on Thursday as the firm said it was “trading comfortably ahead of market expectations”.

“The company’s order books suggest that the changes management have made to products and ranges are beginning to have a positive impact with our retail customers,” according to the group.

It added that alongside overhauls to its ranges, the group also “continued with the strong cost discipline that has enabled the business to demonstrate profitability at the EBITDA level in every month for the last 12 months”.

Revolution Beauty last year brought back its former founders to “reset” the business after failing to secure a suitable buyer and grappling with tumbling sales.

Co-founders Adam Minto and Tom Allsworth, who resigned following a series of accounting issues, returned to the beauty brand and the group raised around £15 million through an investor cash-call.

Debenhams Group, which last year rebranded from Boohoo Group, owns more than a quarter of shares in Revolution Beauty.

The firms were embroiled in a public dispute in 2023 over demands to replace Revolution’s leadership team.

But the firms have since resolved their relationship troubles and announced a new licensing partnership deal in June allowing Revolution to sell its products across Debenhams’ range of brands – adding to existing partners such as Boots and Superdrug.

Elsewhere in the sector, Beauty Tech Group revealed on Thursday it had more than tripled first half profits thanks to booming demand for its products such as LED face masks.

The group behind brands such as Currentbody Skin, ZIIP Beauty and Tria Laser reported pre-tax profits of £17.5 million for the six months to June 30, up from £5 million a year earlier.

Sales soared 44.3% in the first half and the group – which floated on the London stock market last October – hiked its annual earnings guidance following the strong trading and as profit margins have risen strongly.

It said it now expects underlying earnings of no less than £48.5 million, helping shares jump 11% in Thursday morning trading.

Laurence Newman, founder and chief executive of The Beauty Tech Group, said: “At-home beauty technology is the fastest-growing part of the beauty market and we are uniquely positioned to take advantage of it.”

The firm said the at-home beauty sector has “grown at two to four times the rate of the wider beauty market and still accounts for only around 1% of what consumers spend on beauty in its core markets”.