Revolution Beauty has seen a significant profit boost, reporting a record Q4 in its full-year results, with sales rising as a balanced omnichannel model saw digital sales going “through the roof”.
In a trading update, the global cosmetics company reported revenue of £194m, up 42% compared with the previous year. Total earnings were also up 73% from last year, at £22m.
The impressive Q4 was aided by retailer expansions in Boots, Walgreens and the rest of the world, as its second half experienced 44% sales growth.
In the UK, sales also spiked by 85% in the 12 months to the end of February, as post-pandemic footfall began to increase and the brand rolled out its make-up products into Boots.
Revolution Beauty’s chief executive Adam Minto told Charged that the brand’s omnichannel digital strategy is a “phenomenal model” that has allowed the company to build “really strongly” across retail.
Minto explained that Revolution Beauty uses its digital channels to “test and learn” new trends and products, assessing how well they perform before eventually launching products in-store.
“We get to test things on our website and with our digital partners to make sure our consumers love them. We don’t always get it right of course, but we get to refine the product and then put the successes in store,” Minto said.
According to the company, this method has contributed to the success of the Plex Haircare products and fragrance category.
Minto also believes the model protected the company from the harsh impact of the pandemic.
“As footfall was challenged in Europe and the UK, our balanced omnichannel model meant our digital sales went through the roof,” he says.
Revolution’s digital platforms generated approximately 29% of its sales, with the rest coming from retail stores. Minto is not looking to grow this number and even expects it to decline slightly over the next few years, as the company anticipates significant retailer growth.
“Digital certainly had an advantage over the last two years because of the pandemic. But the high streets around the world are definitely back, they never really were going to go away,” he says.
“We’re seeing phenomenal sales in store for our products in both Boots and Superdrug and we’ve got huge expansion coming around the world. I hope our digital sales percentage is going to be in the 20s always, and that will still be incredibly healthy.”
In the trading statement, Minto commented: “The Group delivered a strong full year performance, in line with expectations, and driven by the strength of our omnichannel route to market.
“We had a record fourth quarter in FY22 and saw strong broad-based sales growth across categories and geographies with revenue for the full year increasing by 42% against the previous year.
“The US has become our biggest single market in terms of store sales, while retail in the UK and the Rest of World continued to bounce back to pre-pandemic levels.”