Shoppers cutting back on luxury items and turning to more affordable make-up and skincare have boosted profits for cosmetics brand Revolution Beauty.
But cosmetic companies could face challenges in the months ahead with the war in Ukraine disrupting supply chains and pushing up prices of materials used in products, the company said.
The global brand revealed sales spiked by 85% in the UK in the 12 months to the end of February as retailers recovered from pandemic losses and it rolled out make-up products to high street pharmacy Boots.
The US has become our biggest single market in terms of store sales, while retail in the UK and the rest of the world continued to bounce back to pre-pandemic levels.Adam Minto, Revolution Beauty
Bosses said its recent launch of an affordable skincare range in partnership with author Sali Hughes helped sales gain momentum in the past few months.
Revolution reported a total revenue of £194 million over the year ending in February 2022, up 42% from the previous year, with consumers returning to high street shops after the lockdowns.
Pre-tax profits on an underlying basis, which strip out any one-off costs, were up 73% to £22 million.
Inflation reached 7% last month and the Bank of England warned rates could reach record highs of 10% in autumn, which could force low-cost brands to push up their prices.
Rising prices have already impacted shoppers and reports show consumers are buying less luxury items to save money.
Last week an ONS survey found just over half of people say they are cutting back on non-essential items like new clothes to help combat the soaring cost of living.
But Revolution bosses said consumers feeling the pressure from increased prices in almost every aspect of their lives have made the mass beauty market a more affordable choice for many.
It also enjoyed growth in the US, with products sold in department store Target for the first time and this week launched into 2,800 Walgreens Stores across the country.
Revolution’s chief executive, Adam Minto, said: “The group delivered a strong full-year performance, in line with expectations, and driven by the strength of our omnichannel route to market.
“The US has become our biggest single market in terms of store sales, while retail in the UK and the rest of the world continued to bounce back to pre-pandemic levels.”