Revolution Beauty Posts Steep H1 Losses as Founders Return to Lead Turnaround

Revolution Beauty interim results: steep H1 losses, founders return, refinancing lands

Revolution Beauty Group has posted a tough first half to FY26, with revenue down sharply and losses widening. The headline, though, is what happened after period end: a founder-led reset, a £16.5 million equity raise, a revised bank facility and signs of positive EBITDA returning in September and October.

Below I break down the numbers, what went wrong, what has changed since, and what to watch next as the turnaround gets going.

Key H1 FY26 numbers at a glance

Metric	H1 26	H1 25	Change
Revenue	£49.4m	£72.4m	-31.8%
Gross profit	£15.9m	£23.2m	-31.5%
Gross margin	32.2%	32.0%	+0.2 ppts
Adjusted EBITDA	£(12.5)m	£(6.3)m	Worse
Operating loss	£(16.7)m	£(9.8)m	Worse
Loss before tax	£(18.4)m	£(10.9)m	Worse
Cash and cash equivalents	£1.8m	£6.3m	-£4.5m
Net debt	£30.2m	£25.5m	+£4.7m
Gross inventory	£34.1m	£61.9m	-£27.8m

What drove the slump in H1 FY26

The first half was essentially the hangover from last year’s strategic and operational disruptions. The company points to product range reductions, clearance activity and weaker innovation flow, all of which pulled sales lower and hurt operating efficiency.

• US retailer transition pains: the shift from Relove to Makeup Revolution at Walmart created short-term softness. Management still frames this as strategically positive longer term.
• Clearance sales weighed on margins and brand momentum: gross margin held at 32.2% but only because H1 25 was already low; clearances to free cash were margin dilutive.
• Digital was hit hardest: DTC revenue fell 44.9% to £7.0m as fewer digital-led SKUs launched.
• Geography softness across the board: UK down 27.7% to £15.4m, USA down 42.9% to £10.5m, Rest of World down 28.1% to £23.5m.
• Cost base still too big: operating costs were trimmed 3.7% to £28.4m, but not enough to offset the sales decline, leaving Adjusted EBITDA at a £12.5m loss.
• External headwinds: US tariffs added cost; there were non-recurring markdowns tied to space and brand changes with certain retailers.

The upshot: a widening operating loss of £16.7 million and a cash balance that slid to £1.8 million by 31 August, with net debt at £30.2 million.

Post-period reset: refinancing, founders back, costs cut

The most material developments landed after the period end. These change the near-term risk profile and set a foundation for the turnaround.

• Equity raise completed: £16.5 million of new equity came in during September. Of this, £4.0 million reduced the revolving credit facility (RCF) from £32.0 million to £28.0 million, and £2.1 million covered transaction costs.
• Founders return: Tom Allsworth is now CEO, with Adam Minto in a consultancy role. Their return was key to securing the debt and equity package and has been well received by wholesale partners.
• Cost base right-sized: headcount reduced from 205 (excluding production) on 1 March to 123 now, positioning the business for its current scale.
• Cash and leverage now better: as at 25 November, cash was £7.0 million and net debt £21.0 million, with supplier terms normalised. Management expects a seasonal working capital inflow in H2.
• Banking extended: the amended and extended RCF now matures on 31 July 2028.
• Tariff relief via pricing: management has negotiated price adjustments with US retailers to mitigate tariff costs, with the benefit flowing into the next financial year.

Crucially, the business moved back to positive EBITDA in September and October following early cost actions.

Trading update and outlook: profitability returning, guidance reset

Management reports a return to retail sales growth in H2 across key US and UK retailers and says the business has already returned to EBITDA profitability from H2 FY26.

• H2 FY26 Adjusted EBITDA expected around £4 million.
• By the end of FY26, the company aims to be on an Adjusted EBITDA run-rate of £8-10 million.
• Full-year sales and Adjusted EBITDA will not match guidance given on 22 August due to the weak H1 under prior management.
• NPD back on the agenda: a number of new product launches are slated for Spring 2026.

This is a classic reset: lower near-term expectations, tighter cost control, and a path to renewed growth via range rebuilding, sharper pricing and faster speed to market.

Balance sheet and liquidity: improved but not out of the woods

The refinancing has eased immediate pressure, but the RNS is candid about risk. The going concern section notes a material uncertainty remains around potential covenant non-compliance in a severe downturn or the need for alternative funding. Base-case and downside scenarios suggest compliance is achievable with further cost measures if needed.

Inventory is notably lower – gross inventory at £34.1 million versus £61.9 million last year – which should support cash conversion and reduce clearance drag if maintained.

Key risks to monitor

• Execution risk on the Walmart transition: the move from Relove to Makeup Revolution needs to translate into higher sell-through in the US.
• Innovation cadence: digital revenue fell 44.9%; getting back to fast, trend-led NPD is essential to reignite DTC and support retailer space.
• Tariffs and US pricing: negotiated price adjustments help, but elasticity will be tested.
• Covenant headroom: despite the extended RCF, delivery against the H2 profitability plan is important to keep the lenders comfortable.
• FCA investigation: the FCA probe into matters from July 2021 to September 2022 remains ongoing. The company has denied any breach, but potential liabilities are not quantifiable at this stage.

My take: a messy first half, but the reset looks credible

On the numbers alone, H1 was grim: revenue down a third, Adjusted EBITDA loss of £12.5 million and net debt creeping up. However, those results reflect the tail end of a strategy that clearly was not working. The story now is about the founder-led reset and the balance sheet repair post period end.

There are early green shoots: positive EBITDA in September and October, retail sales growth returning in H2 across key markets, inventory reduced, and pricing moves to offset US tariffs. The cost base is materially smaller, which should make incremental sales drop through to profit faster.

The caveats are real – execution risk on the range rebuild and US transition, ongoing FCA uncertainty, and that going concern flag – but the plan is straightforward: focus on what made Revolution tick in the first place and stop the cash bleed. If management delivers the H2 EBITDA of about £4 million and exits FY26 at an £8-10 million run-rate, sentiment and retailer confidence should follow.

In short: an ugly clean-up, a stronger base, and a path back to profitability that now needs to be proved quarter by quarter.