Revenue and earnings rise 39pc as Revolution Beauty expands
By Josh White
Date: Wednesday 24 Nov 2021
(Sharecast News) - Revolution Beauty reported a 39% improvement in group revenue in its first half on Wednesday, to £78.6m, which it said provided a platform for growth ahead of the peak trading season.
The AIM-traded firm said its performance was driven by international store group growth across a number of categories, with North America store groups up 102%, UK store groups ahead 78%, and the rest-of-world store groups 56% firmer, as retail locations rebounded from Covid-19 trading restrictions.
It reported a "strong performance" across its brands for the six months ended 31 August, including year-on-year growth of 53% for Makeup Revolution.
Revolution's gross margin expanded to 47.9% from 47.7% a year earlier, which the board said was primarily driven by underlying product margins and its customer mix.
That was despite increased cost pressures on freight, which had successfully been offset in the first half.
Revolution said it was "working collaboratively" with suppliers to continue to mitigate them in the second half.
Against "very strong" prior year comparatives, as a result of a "significant shift" to digital during strict Covid-19 lockdowns, digital sales were up 53% for the group when compared to the same period two years ago, before the coronavirus crisis.
Adjusted EBITDA increased by 39% year-on-year to £5.1m, and the company held net cash of £17.6m at period end, after the restructuring of its balance sheet at its initial public offering in July.
"This is a momentous year for Revolution Beauty," said chief executive officer Adam Minto.
"We have continued to focus on accelerating the delivery of our strategy to expand distribution of Revolution Beauty brands around the world.
"We doubled sales in the US, grew our global community to almost seven million, and floated on the London Stock Exchange."
Minto said the operational progress made to match its sales growth was "particularly pleasing", noting that the company expanded its global distribution, launching the Makeup Revolution brand into 1,800 Target discount department stores in the first half, increasing its direct-to-consumer customer figure by more than 200,000, and signed agreements to launch into 2,800 United States Stores from the fourth quarter, and 350 Boots stores in the UK from next February.
"Our digital first strategy underpins our success.
"Our ability to anticipate trends through our social and influencer-led marketing approach, coupled with our speed to market, ensures we are continually innovating ahead of the market.
"This approach means our direct-to-consumer digital customer base is growing strongly, while our in-store distribution network grows in our key markets of the US and UK, as more retailers come to us for our market-leading innovations."
As it said in October, Revolution continued the "strong momentum" from its first half into the seasonal peak of beauty in the third quarter, Adam Minto said, with sales growth across online and in-store, driven by Halloween and the start of Christmas trading.
"We remain confident of meeting market expectations for the full year, though we continue to be mindful of ongoing volatility and disruption caused by the pandemic.
"The medium and long-term growth drivers and opportunity in mass beauty remain strong, and we are confident in our strategy, the resilience of our business model and our differentiated products as Revolution Beauty continues to win new customers around the world."
At 1132 GMT, shares in Revolution Beauty Group were down 1.65% at 127.85p.
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