Shares in AIM-listed growth stock Warpaint London (LSE: W7L) jumped 10% after this morning’s dazzling first-half results. I’m thrilled because I bought Warpaint shares in January, and wish I’d bought them years earlier. That’s hindsight for you.

The specialist supplier of colour cosmetics announced record first-half sales for the six month to 30 June, with earnings before interest, tax, depreciation, and amortisation soaring 66% to £12m year on year. Group pre-tax profit jumped almost 76% to £10.9m.

I’m pleased and relieved but also a little irritated. The shares were sliding in the run up to today’s results, and for no good reason that I could see. So despite today’s stellar results, the Warpaint share price is still down 12.1% over one month.

Can Warpaint keep whipping the competition?

Longer-term investors won’t be complaining, though. Its shares are up 74.92% over one year and a bumper 911.76% over five.

I bought Warpaint after noting that it had repeatedly hiked earnings guidance. It also boasted ample cash reserves, zero debt, and an impressive track record of paying dividends, too.

Its main brands, W7 and Technic, are sold both in the UK (including by Tesco), and via local distributors and retail chains in the US and Europe. Warpaint has an e-commerce business in China too. These are early days, but for a £437m company, the growth potential is huge.

Today, we learned that UK revenues had jumped 17% to £15.5m. International sales did notably better, jumping 30% to £30.3m. In total, they grew 25% to £45.8m.

Better still, gross profit margins widened by 334 basis points to 42.5%. The board put this down to successful new product lines, sourcing and volume savings, growing e-commerce revenue, and increased US profitability.

CEO Sam Bazini says there continues to be “significant growth opportunities” for Warpaint, especially since group sales are typically weighted to the second half, “reflecting Christmas seasonal sales and ongoing sales momentum”.

This AIM stock is true

Warpaint continued to grow throughout the cost-of-living crisis, so I’m hoping it will do even better when the economy picks up (assuming it does). Falling interest rates will help on this front, although the recovery is not a done deal yet.

Cosmetics is a highly competitive industry and fashions change rapidly, so Warpaint has to keep peddling hard to maintain the momentum. It’s been helped by the fact that its brands are at the affordable end of the market. That advantage could reverse if shoppers feel better off and start trading upwards, but I don’t think we’re there yet.

It would be brilliant if Warpaint could crack America, but that’s never easy for a UK-based company. As for China, who knows? There’s massive potential here, if the board can get its strategy and brands right.

Today’s yield of 1.69% is better than it looks, given the ballistic share price. Unsurprisingly, the shares aren’t cheap, trading at 28.09 times earnings. As I’ve seen, they can be volatile, and even a minor earnings slip could trigger a major sell-off.

I was optimistic ahead of these results and tempted to take advantage of the recent share price dip to up my stake. Now, I wish I had. I’ll look to buy more before the next set of results.