Revolution Beauty (REVB) , a multi-brand beauty product innovator, issued a trading update for the year ended February 20, 2024 (FY24).
Revolution Beauty reported continued improvement in profitability since its trading and strategy update on February 8, 2024. As a result, the company upgraded its guidance, now expecting adjusted EBITDA of at least £12.5m and revenue growth of c. 2% for FY24. This compares to the previous guidance of adjusted EBITDA between £11-12m and revenue growth of low single digits. Markets welcomed the news, sending REVB shares 9% higher on Wednesday.
On February 8, 2024, Revolution Beauty held a capital markets event where it outlined a plan to transform the business and accelerate growth, with a view to drive annual retail brand sales of £1bn by 2030. The strategy is built on 3 key pillars - focusing investment on the "Revolution" brand to leverage brand equity; materially reducing the number of SKUs and concentrating on key products; and expanding distribution and retail partnerships with a focus on the US. The group also announced plans to deliver £10m of cost savings over the next 3 years.
REVB expects to report its FY24 results in June 2024.
View from Vox
Revolution Beauty's new growth strategy announced in February is already yielding results as the group announced a significant upgrade to its profit and sales guidance today, the second one in 2 months. Combined with REVB's previously detailed cost savings programme, and with legal woes now firmly behind it, there is material upside ahead.
REVB reported encouraging responses from major customers to its new direction. The decision to reduce the number of SKUs and zero in on more profitable brands has already shown results, with double-digit growth in sales of REVB's core "Revolution" brand compared to H2 2023. At the same time, the transition away from lower-margin products should have a short-term negative impact on sales, therefore more upside lies ahead.
Looking ahead, major product launches are planned for 2024 amid newly signed distribution deals with TikTok and Amazon US.
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