Revolution Beauty has tough first half but founders’ return sees business uptick

Revolution Beauty Group’s half-year results showed continuing declines on Thursday with the six months to late August clearly a tough time for the business. 

The multi-channel mass beauty brand said revenue fell 31.8% to £49.4 million while gross profit was down by a similar percentage at £15.9 million. 

The gross margin increased, but only marginally, to 32.2% from 32% and operating costs edged down by almost 4%.

But that was the only good news with adjusted EBITDA being a loss of £12.5 million, almost double the £6.3 million loss in the previous year.

The operating loss at the company also widened considerably from £9.8 million last time to £16.7 million this time and the loss before tax increased from £10.9 million to £18.4 million. Net debt at the company also grew by almost £5 million to over £30 million.

So what were the drivers behind these numbers? The company said the revenue drop was primarily driven by disruption carried over from prior-year strategic and operational issues.

Transitional challenges also weighed on the net sales performance, most notably the shift from Relove to Revolution at Walmart, “which contributed to short-term softness in sales and operational efficiency during the period”.

And the very minimal increase in the gross margin was blamed on “clearance sales undertaken to generate cash under the previous management team prior to the refinancing”.

That refinancing saw the business also undertaking an equity raise, “strengthening the balance sheet and restoring financial stability”, subsequent to the results reported here.

As for “previous management”, a few days before the end of the period covered, the company announced the proposed return of the founders to the business, Tom Allsworth as CEO and Adam Minto in a consultancy role. This “was a key aspect of the success of the debt and equity refinancing”.

So what of the future? Revolution said that “following the period end, the founders have brought renewed energy, clear leadership and strategy to the business”. And the return of the founders “has been well received by our wholesale partners and there are encouraging early signs of a stabilisation of sales”.

In September and October, following the early action taken on costs, the group moved back to generating positive EBITDA.

The new management team is focused on “restoring sales momentum, improving financial discipline, and rebuilding confidence”. Its operational priorities include “rebuilding our ranges, pricing and speed to market to restore what made Revolution Beauty a success in the first place. Early progress has been made to identify a number of exciting NPD opportunities for launch in spring 2026”.

A “significant headcount reduction”, from 205 (excluding production staff) as of 1 March to 123 currently, has been implemented, “right-sizing the organisation to match the current scale of operations and ensure the group can move forward with agility”.

Management has also “successfully negotiated price adjustments with US retailers, to mitigate tariffs costs, which will benefit the next financial year”.

But the business also issued a profit warning, This came as it said “the performance achieved under the previous management for the first half was worse than expected”. So “full-year sales and adjusted EBITDA will not match the guidance given on 22 August”.

That said, “with the actions taken by the new management to right-size the cost base, set realistic budgets and manage stock carefully, the business has already returned to generating EBITDA profitability. Consequently, with these actions taken and with new foundations and strategy, the company expects to have established an Adjusted EBITDA run rate by the end of FY26 in line with previous guidance of £8 million-£10 million with an Adjusted EBITDA outturn for the second half of FY26 in the region of £4 million.

CEO Tom Allsworth said of all this: “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.”