Revlon Inc.’s U.S. sales are pulling down the rest of the business.
The beauty company reported a $32.4 million net loss for the third quarter. Net sales increased 10.2 percent to $666.5 million from the prior-year period. Pro forma net sales, which consider the company’s acquisition of Elizabeth Arden, decreased 10.5 percent. Earnings before interest, taxes, depreciation or amortization dropped sharply, to $53.6 million from $112.9 million in the prior-year period. On a pro forma basis, adjusted Ebitda dropped 48.9 percent, primarily driven by sales declines in North America, the company said.
“Although we continue to achieve strong sales growth for our core brands internationally, our overall results, which continue to be impacted by the company’s performance in the U.S., were disappointing,” said Revlon president and chief executive officer Fabian Garcia. Revlon will continue to focus on strengthening digital engagement with consumers, driving e-commerce and online sales growth and accelerating the speed of innovation, he said.
“Our long-term transformation initiatives are designed to restore topline growth in the U.S. and support our plans for profitable, global expansion and ensure that we have the ability to successfully compete in a digitally-driven landscape, strengthen social media engagement and align technology platforms to support our strategy,” Garcia said.
Revlon’s consumer segment posted a 10.5 percent year-over-year drop in net sales, with $306.7 million for the quarter; Elizabeth Arden posted an 83.5 percent increase from the prior-year period, with $248.1 million in sales, and the professional segment saw a 9.9 percent net sales dip from the prior-year period, to $107 million.
Revlon said the problems in the U.S. are being caused by declines in the mass retail channel in North America, which is experiencing continued softness in consumption, inventory de-stocking and higher return rates that have affected the Revlon brand and Almay businesses. Globally, the Revlon brand grew sales.
Professional segment sales were hit by lower CND nail and American Crew figures. Revlon is actively working to tighten distribution of those brands.
North America sales were down 3.2 percent to $343.2 million for the quarter. International sales were up 29.2 percent, to $323.3 million.