Revlon Inc. continued to reap the benefits of its restructuring plan, reporting a narrower quarterly loss and a solid sales gain.
The beauty firm's ongoing cost controls helped slim Revlon's loss during the second quarter to $11.3 million, or 2 cents a diluted share, from a loss of $87.1 million, or 20 cents a share, in the prior-year period. Revlon's sales for the quarter gained 8.8 percent to $349.2 million from $321.1 million in the year-earlier period.
The impact of Vital Radiance, which was discontinued last September, reduced second-quarter sales by approximately $14 million.
For the first half, the firm narrowed its loss to $46.5 million, or 9 cents a diluted share, from a loss of $145.3 million, or 36 cents a share, on sales that gained 4.8 percent to $677.8 million from $646.6 million in the year-ago period.
"We are executing our restructuring actions on schedule and we are benefiting from those actions," Revlon president and chief executive officer David Kennedy told analysts Wednesday. "We are right on track with our expectations."
In line with its strategy to contain costs, Revlon kept advertising spending stable during the quarter. Responding to one analyst who asked if Revlon would consider increasing advertising spending, as many of its competitors have done in recent quarters, to revive sales of the Revlon flagship brand, Kennedy said, "We are attempting to manage our key brand's profitably. We want to remain competitive, but we want to have profitable growth over time. Other companies might have other objectives." He added that the company's marketing efforts are focused on the effectiveness of brand communication and in-store execution.
Kennedy promised a full offering of new product introductions next year for both the Revlon and Almay brands across all categories, and upgrades to existing products. He clarified, however, that the emphasis remains managing the portfolio for profitable growth.
In the most recent quarter, Revlon's U.S. sales gained 13.4 percent to $204.2 million from $180 million in the year-earlier period, boosted by higher shipments of Almay products, and offset somewhat by lower shipments of Revlon color cosmetics. International sales gained 2.7 percent to $145 million from $141.1 million, driven by growth in the Asia-Pacific and Latin America regions, and partially offset by softness in Europe.
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