Warpaint makeup group to suffer profit hit as major customer goes bust

Warpaint London shares fell by a fifth on Wednesday morning after the cosmetics firm warned US trade tariffs and lacklustre consumer confidence would hurt profits this year.

The group, which supplies the likes of Boots and Tesco, told investors pre-tax earnings were down 41 per cent year-on-year in the first half of 2025, largely due to currency headwinds and costs associated with the acquisition of Brand Architekts.

The W7 and Technic brand owner marginally missed sales expectations for the half, and said it now expects to report weaker annual revenues and earnings than initially expected.

Bodycare, a long-term customer of Warpaint’s Technic products, recently entered administration, the group said.

Warpaint also warned of an ‘increasingly weak UK consumer environment and an uncertain US market given the recent tariff disruption’.

As a result, the group now expects to post full year revenues of £107million to £112 million, with adjusted earnings before nasties of £23.5million to £25.5million. It posted revenues of £101.6million in 2024, with earnings before nasties of £24.2million.

Shares fall: Warpaint warned US trade tariffs and lacklustre consumer confidence would hurt profits this year

UK revenues soared 15.9 per cent to £18million over the first half, despite W7 and Technic sales falling by 14 per cent. 

International revenues ticked 3.2 per cent higher to £31.3million.

Warpaint expects annual performance to reflect a better second half, ‘supported by price increases to all customers’, expansion into new stores across the UK, EU and US, and ‘Christmas gifting sales’.

Chief executive Sam Bazini said: ‘The Group traded satisfactorily during the first half despite the challenging macroeconomic environment, but we have seen conditions remain difficult in recent months, with both consumer and customer confidence being subdued, which now seems likely to remain for some time.

‘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.

‘Nevertheless, we continue to have a strong second half roll out and see excellent medium- and long-term growth opportunities across the Group, particularly in the UK and Europe, and further opportunities from the addition of the Brand Architekts’ brands.’

Warpaint shares were down 21.1 per cent to 225p by midday, meaning the firm has lost more than half its value since the start of the year.

Its shares now trade at their lowest level since April 2023 and are down by around 65 per cent since a July 2024 peak of 632p.

Shore Capital analysts wrote in a note: ‘Warpaint London’s interim results for the six months ended 30 June 2025 reflect an amalgam of challenges across the UK and European consumer markets, compounded by the uncertainty of the US tariff regime.

‘Looking into H2 FY25, trading conditions have toughened further over the summer, with consumers cautious and some retail customers actively managing inventory levels.

‘For US retailers, the situation is as unclear as before. We lower our forecasts, in accordance with the board’s materially lowered financial guidance.’

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