Revlon Inc. second-quarter profits fell, although company revenues saw gains.
For the three months ended June 30, net income dropped 26.7 percent to $18.1 million, or 34 cents a diluted share, compared with $24.7 million, or 47 cents, a year ago. On an adjusted basis excluding certain one-time charges, income from continuing operations declined 25.4 percent to $32.9 million from $44.1 million.
The company acquired The Colomer Group in October 2013. On a non-GAAP adjusted basis as if Revlon and Colomer were a combined entity for the full year in 2013, and including financing for the acquisition as well as excluding one-time charges, the decline would have been 23.5 percent, with the 2013 second quarter showing $43 million in income from continuing operations.
Total company sales for the quarter rose 44.4 percent to $497.9 million from $344.7 million. Net sales for the consumer category increased 6.6 percent to $367.3 million from $344.7 million. On a non-GAAP adjusted basis as if Revlon and Colomer were a combined entity for the full year in 2013, net sales for the consumer category rose 1.2 percent to $367.3 million from $363.1 million.
Lorenzo Delpani, president and chief executive officer, told Wall Street analysts in a conference call that the company has “continued strong momentum” in net sales growth in its professional division. He cited American Crew, Revlon Professional hair color and Crème of Nature brands as contributors to higher sales in the quarter compared with a year ago.
Revlon’s consumer division also saw gains, but at a lower rate. The brands that did well were Revlon Color Cosmetics and Revlon ColorSilk, offset by lackluster performance by the Almay brand.
Delpani noted that a “significant part of our business is in the U.S. mass color cosmetic category, which is declining year-to-date in 2014 versus 2013.”
Looking ahead, Delpani said, “While the color cosmetic category in the U.S. continues to be softer, we remain focused on supporting our brands with the intent to grow market share and develop our business. To that end, we have increased our advertising spend by $11.7 million in the second quarter versus last year, which was primarily in support of our consumer brands. Year-to-date, we have spent $20 million more than last year, which is a 16 percent increase.”
Shares of Revlon Inc. rose 3.2 percent to close at $30.71 in trading on the New York Stock Exchange.