Revolution Beauty has reported a return to positive adjusted EBITDA in the first half of its financial year, delivering £2m compared with a £12.5m loss a year earlier. The company said the £14.5m improvement reflected higher gross margins and a substantially reduced operating cost base. Its unaudited results for the six months to 31 August 2026 show progress in the turnaround, while statutory profitability has not yet been restored.
Revenue was £48.4m, down 2% from £49.4m, although management said underlying revenue increased by 8.3% after adjusting for changes in the prior-year mix. Sales in the previous period had been supported by clearance activity and discontinued ranges. Those comparisons are important because a business can make operational progress while reported sales remain flat, particularly when it deliberately removes low-margin or loss-making lines.
Gross margin improved from 32.2% to 43.6%, an increase of 11.4 percentage points, while reported operating costs fell 32.7% to £19.1m. An improvement in product mix and tighter stock management can support both measures. However, a higher gross margin is not equivalent to higher net profit if overheads, financing charges and other costs continue to absorb earnings.
The company recorded an operating loss of £0.9m, substantially narrower than the £16.7m loss in the previous half-year. Loss before tax declined from £18.4m to £1.9m. These statutory numbers provide context for the positive adjusted EBITDA figure, which excludes particular costs and financing effects. It would be inaccurate to present the result as full profitability across every accounting measure.
Online sales increased by 22%, according to the update, while the company said its retail partners continued backing refreshed ranges. Online growth may provide improved direct customer information and marketing flexibility, but the commercial benefit depends on fulfilment costs, returns and the price paid to acquire customers. A percentage gain in one sales channel also does not disclose the profit contributed by that channel.
Inventory management has been central to the recovery effort. Gross inventory stood at £30.8m, down from £34.1m a year earlier. Better alignment between product ranges and demand can reduce clearance requirements and the amount of cash held in stock, particularly in beauty where trends and packaging can change rapidly. Inventory still needs to support reliable availability, and cutting it too aggressively can produce missed sales or costly replenishment.
Net debt was £25.7m at the half-year, compared with £30.2m a year earlier. Cash and cash equivalents increased to £4.3m from £1.8m. Financial headroom will remain important while the group funds new products and attempts to restore sustainable growth. A company emerging from a restructuring can post better earnings metrics but still face pressure if working capital or debt service is not closely managed.
Revolution Beauty said it had recorded positive adjusted EBITDA for 13 consecutive months to the end of September. That suggests the improvement extends beyond a single reporting month, although adjusted EBITDA is not a cash flow statement. Management also indicated that trading early in the second half was towards the top of market expectations, which it described as annual revenue of £92m–£95m and adjusted EBITDA of £6m–£6.6m.
Founder-led management has emphasised simpler operations, a more focused assortment and stronger financial controls. The choices create a trade-off between protecting margins and rebuilding customer demand after a period in which clearance and product changes complicated comparisons. Stronger control of the existing range may improve performance, but longer-term growth also needs retailers and customers to keep choosing new products at commercially viable prices.
Revolution Beauty has moved from a £12.5m adjusted EBITDA loss to a £2m profit on that measure in its first half, while reported revenue slipped to £48.4m. Gross margins have strengthened, with management focusing on a narrower range of products and lower operating costs. The full-year outlook assumes further gains in the second half, alongside efforts to rebuild sales without reverting to extensive clearance activity.
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