Revolution Beauty warns over sales slump after December trading woes
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Troubled cosmetics brand Revolution Beauty has warned that annual sales are set to tumble by around a quarter after online trading weakness in December and delays to retail launches. The group – which sells make-up, skincare, hair and body products online and through concessions – said it had seen some “sales softness” over the key Christmas month across its digital channels, as well as “an element of de-stocking” by retailers in the US.
This compounded the impact of delays to a number of retailer launches due to take place in its fourth quarter, which will now go ahead in the first half of its new financial year. The company cautioned that net sales are expected to plunge by around 25% for the year to February 28, with underlying earnings in the “high single-digit millions”, supported by cost-cutting efforts.
It had previously said that underlying earnings would be at least in line with the £12.6 million reported the previous year, excluding a £10.2 million write-off on old stock. But Revolution Beauty said it was “confident in a return to overall growth overall” in the next financial year.
In November, the group reported pre-tax losses of £10.9 million for its half-year to August 31 against profits of £400,000 a year earlier after seeing sales slump by a fifth and taking the write-off on old stock amid a strategy shake-up. It has been taking action to simplify its product offering and ramp up clearance promotions to shift old stock.
