Warpaint London Shares Drop 11% on Lowered Full-Year Revenue Outlook

Shares of Warpaint London PLC (W7L) fell by more than 11% on Wednesday after the cosmetics group announced it expects full-year revenue to be at the lower end of analyst forecasts. The negative outlook overshadowed news of an increased interim dividend and improved gross margins in its first-half results.

Revised Outlook

Warpaint, which is listed on London's AIM market, stated that revenue for the year ending Dec. 31 is now anticipated to be at the bottom of the current market forecast range. As of Sept. 22, analysts had projected full-year revenue between £103.3 million and £112.6 million.

Despite the lowered revenue outlook, the company expects its adjusted EBITDA to remain within the forecast range, which has a floor of £21.3 million. This compares to revenue of £105.1 million and adjusted EBITDA of £21.3 million reported for 2025.

First-Half Performance

The guidance followed a challenging first half, where the company cited consumer spending pressures and cautious ordering from retailers. For the six months ending June 30, Warpaint reported the following results:

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• Revenue: £40.5 million, a decrease of 17.8% from £49.3 million a year earlier.
• Pretax Profit: £4.9 million, down from £7.3 million in the same period last year.
• Gross Margin: Increased by 230 basis points to 47.3%, attributed to sourcing changes and the acquisition of Barry M.

Company Commentary and Capital Returns

Chief Executive Sam Bazini noted that the company expects 2026 results to be more heavily weighted toward the second half. For the nine months to Sept. 30, group sales are projected to be approximately £68 million, down from £76 million a year prior.

Despite the sales headwinds, the company's financial position remains strong. It reported cash of £20.7 million as of June 30, remains debt-free, and increased its interim dividend by 6.25% to 4.25 pence per share. Warpaint is also executing a share buyback program of up to £2.5 million, which it expects to complete by the end of September.