Revolution Beauty Group PLC (AIM:REVB), the makeup retailer, saw its shares sink around 11% to 28.5p after it warned full-year revenues would be lower than previously forecast.
Sales are now expected to grow at a low single-digit rate, having been forecast in November to jump by high single digits, the group revealed in a trading update.
However, by increasing the number of lower-margin stock-keeping units (SKUs), the group has been able to maintain healthy margins.
Therefore, underlying earnings are expected to reach between £11 million and £12 million, representing a swing to profitability compared to 2023’s loss of £7.5 million.
Revolution Beauty’s management will also host its capital markets event on Thursday.
It represents the such event since its leadership was replaced, following activist investor Boohoo’s demands to shake up the boardroom.
As part of the new strategy, the retailer aims to deliver around £10 million in cost savings over the next three years, reduce the number of SKUs and grow market share in the US.
It is all part of a plan for the company to become a top-five global beauty retailer and have annual sales of £1 billion by 2030.
Lauren Brindley, chief executive officer at the company, said: “The strategy that we're setting out today is about harnessing our strengths and taking the brand back to its roots. We want to build on what we're best known for - our innovation, speed to market, accessibility and inclusivity.”