Lush Reports $6.7M Profit Despite Auditor Warnings of Material Uncertainty

Lush Cosmetics has reported a recovery in its financial performance for the year ended June 30, 2025, characterized by increased sales and a significant narrowing of pre-tax losses. Despite these gains, the company continues to navigate a complex global economic environment and specific ingredient price volatility.

The group reported turnover of £736.2 million for the fiscal year ending June 30, 2025. On a like-for-like basis, turnover grew by 8%, with retail stores seeing 7% growth and digital platforms experiencing a 13% increase.

Total sales for the Lush brand, which include contributions from associates and non-group partners, reached £836.7 million, representing a 9.2% increase over the previous year.

Financial Recovery and Profitability

The company’s pre-tax loss narrowed to £6.7 million in 2025, a sharp improvement from the £52.1 million loss recorded in 2024. The group transitioned from an EBITDA loss of £8.5 million to a profit of £28.4 million during the 2025 period.

This financial turnaround was supported by the completion of approximately £6.5 million in one-off restructuring costs. These costs were related to the consolidation of the company’s manufacturing footprint across Canada and Europe.

The 2025 results follow a volatile 2024 period. For the year ending June 30, 2024, some reports indicated a widening pre-tax loss from £28 million to £42.5 million, with sales dropping 8.5% from £708.1 million to £647.5 million. During that period, retail revenues fell 4.9% and digital sales decreased by 5.6%.

Operational Challenges and Market Pressures

Lush faced significant headwinds in 2025 due to a surge in the cost of cocoa butter. The business reported an additional cost of £3.1 million resulting from price increases of more than 400%.

The company attributed these price spikes to a combination of tightening global supply and poor harvests in West Africa, which were driven by crop disease and adverse weather conditions.

Beyond ingredient costs, the company cited political developments in the United Kingdom and the United States as factors impacting its financial position. In the UK, increases in employer National Insurance (NI) raised annual staff costs by approximately £3 million.

In the United States, trade policies involving tariffs affected both the cost base and sales. The company noted that most goods sold to US customers, whether online or in-store, are manufactured in Canada and exported to the US.

Growth Drivers and Global Strategy

Sales performance in 2025 was bolstered by new product launches and the visibility of hero products on online customer forums and digital platforms. Key products contributing to this growth included Let the Good Times Roll body spray, Sticky Dates shower gel, and Super Milk conditioning hair primer.

The company also leveraged cross-brand collaborations, which generated approximately £34 million in sales. These partnerships included franchises such as Minecraft, Minions, Hello Kitty, and Wicked.

As of June 30, 2024, the Lush brand operated through manufacturing facilities in six countries and retail outlets in 50 countries. The total number of permanent shops stood at 869, an increase from 857 in 2023.

The group’s ongoing strategy involves tailoring stock to local needs by empowering shop managers to curate their stores. Expansion efforts are focused on successful and less volatile markets, with plans to open new franchises in France and Italy. The company is working with partners in Indonesia and India, with openings expected in 2026.

Lush is targeting approximately 30 outlets in these new regions over the next decade, alongside imminent expansion in Cyprus, Panama, and Turkey.