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Investing.com -- Warpaint London PLC (LON:W7L), the specialist supplier of color cosmetics, saw its shares fall 18% on Wednesday after lowering its full-year guidance despite reporting an 8% increase in revenue for the first half of 2025.
The company cited challenging macroeconomic conditions, weak consumer sentiment, and a key customer entering administration as reasons for the revised outlook.
For the six months ended June 30, Warpaint reported revenue of £49.3 million, up from £45.8 million in the same period last year, boosted by the acquisition of Brand Architekts in February.
However, on a like-for-like basis, revenue declined slightly. Gross profit margin improved by 250 basis points to 45.0%, while adjusted EBITDA fell 5% to £10.8 million from £11.4 million a year earlier.
The company now expects full-year revenue between £107 million and £112 million, with adjusted EBITDA between £23.5 million and £25.5 million, representing a significant reduction from previous guidance of approximately £29 million in profit before tax.
"The Group traded satisfactorily during the first half despite the challenging macroeconomic environment, but we have seen conditions remain difficult in recent months," said Sam Bazini, Chief Executive.
"Coupled with continuing US market uncertainty, alongside a specific customer recently going into administration, we are disappointed to be lowering our expectations for the full year."
Despite the challenges, Warpaint increased its interim dividend by 14% to 4.0p per share, reflecting its strong cash position of £17.0 million as of June 30, up from £5.5 million a year earlier.
The company remains optimistic about its second-half performance, supported by price increases, ongoing store rollouts, and Christmas gifting sales.
Significant expansions include Superdrug rolling out W7 into 140 new stores, Tesco undertaking a 150-store expansion, and Boots introducing gifting products in 350 stores for Christmas 2025.