NEW YORK – Revlon expects second quarter sales to be flat over the prior period, dragged down in large part by its underperforming Vital Radiance brand, a cosmetics line for women fifty plus introduced last spring.
Vital is expected to account for a $40 million operating loss in the quarter, which includes $20 million in product returns as several mass merchants dropped the brand from some of their doors. Revlon would not comment as to which retailers cut the brand’s space or how the lost doors will effect company’s 2006 space gains of 22 percent.
Despite the lost doors, the company indicated Vital Radiance is on track to become a $50 million brand.
In line with its previous disclosure, Revlon said its expects “adjusted EBITA in 2006 to be even or somewhat below the $167 million achieved in 2005, after taking into account a significant negative impact to operating income in 2006 related to Vital Radiance, and the $10 million restructuring charge announced earlier this year.”
Net sales for 2006 are expected to be up in the mid-single-digit range.
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