Revlon Inc. is readying for heightened competition with a bolstered marketing budget.
During the company’s second-quarter conference call on Wednesday, Revlon president and chief executive officer Lorenzo Delpani said the recent spate of acquisitions in the beauty industry — including the $12.5 million Coty-Procter & Gamble Co. deal — along with the entrance of new brands and private label offerings has ratcheted up competition in the market. Delpani said Revlon has increased its marketing spending by more than $50 million since late 2013.
“We are ready for the increased competitive environment,” Delpani told Wall Street analysts. “The new Revlon is a Revlon that has a competitive level of investment and a strong [product] pipeline for the future.”
The company’s net income for the three-month period ended June 30 gained 43.7 percent to $26 million, or 49 cents a diluted share, compared with $18.1 million, or 34 cents a share, in the year-earlier period.
Net sales declined 3.1 percent to $482.4 million, from $497.9 million in the year-ago period. Revlon exited business operations in Venezuela during the quarter, moving to a distributor model. Excluding that exit, adjusted net sales dipped 1.5 percent to $482.4 million in the quarter, compared with $489.6 million. Excluding the impact of foreign currency, net sales gained 4.7 percent.
“During this quarter, we completed our acquisition of the CBBeauty Group and exited our business operations in Venezuela, moving to a distributor model,” Delpani said. “We also continued to execute our strategy of value creation, investing $14.7 million of planned incremental brand support in the second quarter of 2015.”
By division, the company’s consumer segment declined 3.4 percent on a reported basis to $354.7 million, and was up 1.4 percent in constant currency boosted by higher net sales of Revlon and Almay cosmetics.
The professional segment decreased 5.5 percent to $123.4 million, or gained 4.1 percent in constant currency behind higher net sales of American Crew and Revlon Professional products.
By region, net sales in the U.S. gained 4.6 percent to $267 million, while international net sales declined 11.2 percent to $215.4 million due to the changes in Venezuela, or gained 1.2 percent in constant currency.
For the first half of the year, Revlon’s net income gained 6.4 percent to $25.1 million, or 48 cents a diluted share, compared with $23.6 million, or 45 cents a share. Net sales for the six-month period declined 4.8 percent to $920.9 million.