Revlon Inc. posted declines for the first quarter after disruptions in a North Carolina manufacturing facility.
The business had net sales of $560.7 million, down 6.1 percent year-over-year from $594.9 million. Revlon also posted a $90.3 million net loss, larger than the $37.4 million loss in the prior-year period.
Net sales were affected by declines at Revlon and in the company’s fragrance business, and were offset by an uptick at Elizabeth Arden. The manufacturing disruptions, caused by the launch of a new information technology system, caused a $20 million reduction in net sales, the company said, and mainly affected the Revlon brand. That problem has been fixed, and as of April, “the facility is back to normal production capacity, and the company is refilling its pipeline orders” the company said.
Revlon also tightened distribution for American Crew and CND, which has affected sales numbers as well, according to chief financial officer Victoria Dolan.
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The company’s Revlon segment posted a 6 percent year-over-year decline in net sales, to $229.1 million. Elizabeth Arden sales were up 10.4percent, to $105.7 million; the company’s portfolio segment, which includes American Crew and Mitchum, was down 8.3 percent to $134.5 percent. Fragrance sales also dipped 16 percent from the prior-year period, to $91.4 million.
That dip was due to a loss in brand licensees as well as lower sales from Juicy Couture in North America and John Varvatos internationally, the company said. The business is planning to launch an All Saints fragrance soon, and is “in the market looking at incremental licenses,” said Paul Meister, executive vice chairman.
“Despite our results being impacted by service disruptions at our Oxford facility, we made significant progress during the quarter on several key initiatives,” said Meister. “We are aggressively driving change and innovation in our brands, products, and sales processes. As a result, we are seeing significantly accelerated sales growth across all our digital platforms, positive consumer responses to our new brand campaigns and are confident in the future.”
Revlon has seen sales acceleration on its digital platforms and “positive response” to new brand campaigns, he added.
Both Revlon and Almay are stepping up their in-store presentations, according to Chris Peterson, Revlon chief operating officer.
“The first 140 Ulta stores to reset Almay have seen a near 50 percent sales uplift from the previous level,” Peterson said. He also highlighted the company’s digital efforts — online sales increased 25 percent during the quarter, driven by Amazon, Tmall and brand websites.