Revolution Beauty has posted a 20% drop in sales in the first half of its 2025 financial year, in what one analyst described an "ugly" set of results.

The beauty products firm said its first half year sales had fallen from £90m to £72m year-on-year, while its underlying adjusted EBITDA dropped from £3.5m to £3.1m in the same period.

However, Revolution did note that this drop in sales in the six months to 31 August was a result of the planned simplification of its product portfolio.

The firm had previously disclosed that it was focused on clearing its "slow-moving, discontinued" inventory from previous years to generate cash.

As a result, Revolution has determined that a one-off non-cash stock provision of £11.3m in the first half was necessary to "reflect the net realisable value" of the remaining old inventory, which will be excluded from the adjusted EBITDA.

However, the firm said that its cost savings programmes "remain on track", with operating costs, which exclude marketing costs, decreasing 31%, and administrative costs dropping by 25% year-on-year.

As of 31 August , the company had cash balances of £6.8m and a fully drawn rolling credit facility of £32m.

Chief executive officer at Revolution Beauty, Lauren Brindley, said: "In the last six months, we have made great progress in our Reigniting the Revolution strategy. We have reduced our SKU portfolio significantly, enabling improved underlying gross margin performance, on a core set of SKUs that are growing globally."

Analysing the results, however, investment director at AJ Bell, Russ Mould, added: "This is a very ugly set of results from Revolution Beauty. Expectations were hardly set high given the disappointments the company has served up since joining the market in 2021, but worse than expected revenue in the first half of its financial year has still been enough for the market to serve up further punishment."

Looking ahead, the firm has updated its full year guidance, with sales now expected to decline year-on-year, but at a slightly slower rate than in H1, with return to growth in the final quarter, as its strategic growth initiatives take effect.

This growth is expected to accelerate through the 2026 financial year, while its adjusted EBITDA is set to be in line with the 2024 financial year results, as previously guided.

Revolution has also agreed a new relationship with Germany’s number one mass beauty retailer, DM Germany, and is set to launch in more than 850 stores in January 2025.

Furthermore, it has signed deals with Boots UK, Walmart and Amazon US to launch with these respective retailers.

Mould concluded: "Profit remains on track for now, despite the lower revenue, and this reflects improved profitability in the underlying business. However, clearing discontinued and non-core stock looks like it will continue to weigh on financial performance for some time to come.

"The company is progressing some strategic initiatives like new product launches and developing relationships with major retailers in Germany, the UK and the US.

"However, it has very little credit in the bank with investors and it will be interesting to see what major shareholder Boohoo does with its stake as it reportedly considers selling off assets in the wake of its own indifferent performance."

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