NEW YORK — Revlon Inc.’s turnaround efforts claimed a small victory Thursday as first-quarter sales increased despite its 18th consecutive quarterly loss.
The bottom-line deficit widened slightly in the quarter to $48.7 million, or 93 cents a share, from $46.1 million, or 88 cents, a year ago. Revlon incurred expenses of about $11 million in the quarter related to its turnaround and growth efforts, exclusive of brand support, training and development costs.
Investors traded down shares of the firm 13 cents, or 4.4 percent, to close at $2.83 on the New York Stock Exchange Thursday.
So far, the firm has recognized charges of $115 million for its revitalization program, which could tally an eventual price tag of $160 million.
Reflecting increased brand support, net sales were up 6 percent to $292 million from $275.4 million a year ago. Revlon pointed to the increase, the first rise in net sales for several years, as a leading indicator.
"We’re continuing to execute the plan, which is very much focused on consumers, our retail partners and the organization, and we’re beginning to pull the levers on all three of these elements," said president and chief executive Jack Stahl in a telephone interview.
In addition to the improved sales, Stahl said Revlon and Almay, the firm’s two main brands, were gaining market share momentum. Revlon’s share has risen for seven straight months, while Almay’s has been on the upswing for four.
The company’s overall market share in color cosmetics picked up 80 basis points from a year ago to 23.2 percent in the quarter, according to ACNielsen.
First-quarter share for the Revlon brand registered a 110 basis-point gain to capture 17.2 percent of the market. Almay’s share grew 20 basis points to 5.9 percent of the market versus a year ago.
In recent weeks, Revlon’s brought to life its "360-degree brand experience," including the launch of new TV and print advertising for the Revlon and Almay brands.
"This advertising leverages our brand strength consistently across all forms of our communication, including in-store graphics, which are beginning to flow out into the marketplace," noted Stahl on a conference call.Revlon began ramping up support of its brands in the second half of last year. During the quarter, selling, general and administrative expenses of $184.2 million represented a 260 basis-point rise against a year ago, as a percent of sales.
North American sales grew 4.6 percent in the quarter to $205 million from $196 million a year ago, driven by color cosmetics gains and, to a lesser extent, hair color. Offsetting the advance were lower sales from implements and antiperspirants/deodorants.
International sales rose 10.1 percent to $87 million from $79 million a year ago. Exclusive of the favorable impact of foreign currency translation, Revlon’s sales abroad expanded by 5 percent.
"Our international business is beginning to strengthen in some key markets and that’s evidenced by our sales performance, which was particularly strong in the U.K., South Africa and several markets in the Far East," said Stahl on the call. "We have stepped up our marketing effort in these important markets and we’re beginning to see some responsiveness to our programs."
Revlon is in the second, or stabilization and growth, phase of a planned three-part turnaround. This is the investment-heavy portion of the attempted about-face, which includes ramp-ups in advertising and promotion to support the firm’s brands and entice market share gains.
The cost rationalization phase of the plan, which included plant closures, was largely completed before Stahl took over the helm in February 2002. During the third phase, the firm hopes to enter into a mode of accelerated growth, although its timing remains uncertain.
Revlon still needs to contend with its significant debt load, the long-term portion of which tipped the scales at $1.76 billion at the end of the quarter.
So far, the firm has enjoyed financial backing from its primary shareholder, Ronald Perelman, through his wholly owned MacAndrews & Forbes Holdings. As reported, Revlon inked an investment agreement with MacAndrews in February, which included a $100 million term loan, a $50 million rights offering and a $40 million line of credit that increases to $65 million in 2004.
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)