REG - Revolution Beauty Gp - Trading Update

Revolution BeautyAnnouncement

Tue 07:02

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RNS Number : 3508I  Revolution Beauty Group PLC  13 May 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS
DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF
MAR.

FOR IMMEDIATE RELEASE

13 May 2025

Revolution Beauty Group Plc

("Revolution" or the "Company")

TRADING UPDATE

Revolution Beauty Group, the multi-channel mass beauty brand, is today
providing an update for the year ended 28 February 2025 ("FY25") and an update
on the FY26 outlook and certain other matters.

FY25 trading update

FY25 was a transformational year for Revolution Beauty, during which it has
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 approximately £141.6m, down 26% year-on-year
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.

The Company expects to report FY25 underlying adjusted EBITDA of between
£6.0m and £6.5m. Adjusting items included an adjustment for stock provision
charges related to non-strategic stock of £9.2m. Cash balances at the end of
February 2025 were £5.7m and net debt was £26.3m with a revolving credit
facility of £32m. Gross inventories reduced from £60m to £33m at 28
February 2025.

The FY25 revenue and EBITDA above remain subject to audit and any adjustments
that may further be required as part of the audit process.

Current trading and FY26 outlook

The Company had planned for double digit net sales declines to continue into
the first quarter of FY26, driven by the remaining impact of the SKU
discontinuations, but March and April have been softer than planned due
primarily to performance weakness in pure play digital retailers (excluding
Amazon that continues to grow significantly) and weakened consumer confidence
impacting USA performance. Management considers both impacts as short to
medium term.

Management is however 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 program in the second half of FY26.

A recent Kantar study has also confirmed that consumer consideration to buy
Revolution Beauty has significantly increased over the last 12 months in the
UK, suggesting that the focussed brand activity is improving brand health and
competitiveness for the future. In the UK 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.

The Company has also landed 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 our master brand "Revolution"
into major global retailers including Walmart and DM Germany and supplemented
its make-up brand with a new Revolution skincare range targeted at the brands
core Gen Z customer. An innovative mascara product Wrap Lash has also launched
in the last few weeks.

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.

With continued focus on cost and inventory management, Management expects the
impact of lower sales on FY26 EBITDA to be significantly mitigated.

USA tariffs - potential impact

The Company very much welcomes the announcement of 11 May 2025 regarding
imports to the USA from China which will be subject to much lower tariffs than
previously proposed. In FY25, 23% of Company sales were generated in the US
market with approximately 60% of the Company's products sold in the USA being
manufactured in China.

Therefore, it is expected that the increase in tariffs on goods imported into
the US from China will have a consequently lower impact on the Company's cost
of goods sold in the market than previously modelled, but it will continue to
assess this in light of yesterday's announcement.

The Company is benefitting from having imported significant volumes into the
USA before the tariff charges were significantly increased and has suspended
the import of inventory into the USA until trade discussions between USA and
China provided more clarity. Following yesterday's announcement, the Company
has been able to authorise shipments where NPD launches dictate. The Company
is engaging with all its retail partners to assess the need for cost price
increases as a result of the tariff charge increases whilst seeking to
maintain Revolution Beauty's competitive positioning in the USA.

Review of funding options

Revolution Beauty has a significant global distribution footprint in high
street retailers and on renowned digital platforms, with the improved brand
metrics and accelerating NPD pipeline, Management remains confident in the
future growth potential of the Company.

While the Board has confidence in the future medium-term prospects for the
Company, cash management has been tight and it is clear that the delivery of
the strategy will benefit from a more robust capital structure with additional
capital to invest into the Company. As such, the Board has been actively
reviewing the Company's funding structure.

Revolution Beauty's fully £32m revolving credit facility ("RCF") runs to
October 2025. The Company's banking partners remain supportive of the Company,
and it has been in active and constructive dialogue with its banking partners
regarding amending and extending the current RCF to provide adequate
flexibility for the Company going forward.

 

 

For further information, please contact:

 Revolution Beauty Group Plc
 Colin Henry, Interim CEO                                                       via Headland Consultancy

 Neil Catto, CFO

 Panmure Liberum Limited (NOMAD and Joint Broker)                               +44 (0)20 3100 2222
 Bidhi Bhoma / Dru Danford / Edward Thomas / John More

 Zeus (Joint Broker)  Benjamin Robertson / Nick Cowles / Jordan Warburton       +44 (0)161 831 1512

 Media enquiries:

 Headland Consultancy                                                           +44 (0)75 518 25496 / +44 (0)77 899 54356

 Matt Denham / Antonia Pollock

 Revolutionbeauty@headlandconsultancy.com

 

 

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