Image source: Shutterstock

Highlights

  • FY25 Revenue Down 26% to £141.6m due to major SKU rationalisation and weaker U.S. and digital performance.

  • Positive Brand Momentum: Revolution now ranks 4th in UK make-up consideration, with encouraging uptake in new product lines.

  • FY26 Strategy Focus: Cost controls, new brand launches, and global retail expansion expected to offset early-year softness.

Revolution Beauty Group (LSE:REVB), a leading multi-channel mass beauty brand, has issued a trading update for the year ended 28 February 2025 (FY25) alongside a forward-looking statement for FY26. Despite significant revenue declines due to product streamlining and market headwinds, the company highlights substantial strategic progress and renewed consumer interest in its revitalised brand.

FY25 Performance: Rationalisation and Reset

FY25 was marked as a “transformational year” for Revolution Beauty, with over 6,000 SKUs discontinued to simplify its portfolio and lay the groundwork for a more scalable and profitable operation. This bold rationalisation strategy led to revenues of approximately £141.6 million, down 26% from the prior year. The revenue decline was largely expected, as the company exited non-strategic lines and focused on core product offerings.

Adjusted EBITDA is expected to land between £6.0 million and £6.5 million, with £9.2 million in stock provision charges related to discontinued inventory. The company’s cash balance at year-end was £5.7 million, with net debt of £26.3 million, well within its £32 million revolving credit facility. Gross inventories were significantly reduced from £60 million to £33 million.

The FY25 results are currently unaudited and may be subject to further adjustments.

FY26 Outlook: Challenges and Growth Drivers

The Group had planned for continued double-digit sales declines in early FY26, as the residual impact of SKU rationalisation carried over. However, March and April sales were softer than anticipated, due primarily to weakness in pure-play digital channels (excluding performance from Amazon) and reduced U.S. consumer confidence—factors management views as short to medium term.

Despite the slow start, the company is optimistic about several emerging growth drivers:

  • New Product Launches: The recently introduced NPD SKUs (from February 2025) have shown early promise. Revolution plans to build on this success with an expanded digital fast-track innovation program in H2 FY26.

  • Brand Health Rebound: According to a recent Kantar study, consumer consideration to purchase Revolution Beauty in the UK has significantly increased, pushing the brand from 6th to 4th in the national make-up consideration ranking.

  • New Brand Expansion: The RELOVE budget range, targeting value-conscious consumers and the grocery sector, has received its first customer orders and is slated for an accelerated rollout across FY26.

  • Retail Expansion: The company has secured new placements for the master "Revolution" brand in Walmart (USA) and DM (Germany), and has launched a new Gen Z-focused skincare range and the innovative Wrap Lash mascara.

Operational Efficiency and Cost Control

In light of the early-year trading softness, management has pledged to continue tight cost controls, aligning expenditure with sales performance. The benefits of a simplified brand structure and reduced inventory burden are expected to help offset EBITDA pressures in FY26.

Management reaffirmed its commitment to maintaining disciplined cost and inventory management while driving growth through targeted marketing, product innovation, and global retail partnerships.