Key Takeaways:
Warpaint London Plc reported first-half revenue of £40.5 million, down 17.8% from £49.3 million a year earlier, and guided full-year sales toward the bottom of the market's £103.3 million to £112.6 million range. The AIM-listed cosmetics supplier's shares fell 14% to 192.5p.
"The first half of 2026 has undoubtedly been a challenging period, with pressure on consumer spending and cautious retailer ordering across many of our markets," Chief Executive Sam Bazini said. "Against this backdrop, we have remained focused on the areas within our control."
The shortfall was partly structural. Excluding £2.5 million of sales from the Barry M brand, acquired out of administration in February for £1.4 million, revenue was £38.0 million. W7, the group's largest brand at 59% of sales, fell to £23.9 million from £29.8 million, with UK W7 sales down 20% to £6.1 million and US W7 sales down 40% to £1.2 million. Technic dropped to £8.7 million from £12.4 million after Bodycare, a former major customer, entered administration in September 2025; that account alone was worth £1.6 million in the prior-year half. Rest of World sales collapsed to £1.2 million from £3.6 million on the timing of orders from an Australian customer.
Gross margin improved for a fifth consecutive first half, reaching 47.3% from 45.0%, helped by re-sourced Brand Architekts products and roughly 150bps from selling through Barry M inventory bought at a discount — a one-off. Management held prices rather than pass on cost increases, citing the squeeze on household budgets. Cash flow from operations rose 80.9% to £7.4 million and the group remains debt free, with cash of £20.7 million. The board raised the interim dividend 6.25% to 4.25p and began a £2.5 million buyback on 27 July.
The company expects 2026 to be far more second-half weighted than usual. Sales for the nine months to 30 September are expected at roughly £69 million against £76 million a year earlier, with third-quarter sales of about £28.5 million, up 5% on the £27.1 million booked in Q3 2025. That implies a fourth quarter near £34 million to reach the bottom of the revenue range.
The H2 case rests on a substantially larger Walmart Christmas order, a new online Christmas gift range with Ulta Beauty, W7's first Christmas gifting listing at Superdrug, an expanded Tesco Halloween and Express-store footprint, and a W7 rollout into 2,200 Rossmann stores in Germany that met the retailer's pilot metrics, with talks underway on a wider launch. Technic entered Italy's Tigotà with initial orders including Christmas gifting. Direct online sales rose 6% to £3.6 million, or 8.9% of group revenue, and online sales in India start in the fourth quarter.
Adjusted EBITDA guidance of £22.4 million to £24.0 million sits within the analyst range, but the revenue guide implies a downgrade at the top end. For the year ended 31 December 2025, Warpaint reported revenue of £105.1 million and adjusted EBITDA of £21.3 million, so the midpoint of the EBITDA range implies growth of roughly 9% on flat-to-lower sales — a margin-led outcome that depends on the one-off Barry M inventory benefit not reversing.
The stock's 14% decline leaves it testing levels last seen before the Brand Architekts acquisition closed in February 2025. Warpaint's next hard data point is the nine-month trading update covering the period to 30 September, expected in October, which will show whether the Christmas order book has converted. Peers in UK value cosmetics, including Revolution Beauty and the Superdrug own-brand supply chain, face the same retailer caution on discretionary ordering.
This article is for informational purposes only and does not constitute investment advice.
