Revlon Inc. moved back to the black in the third quarter with net income of $9.5 million, or 18 cents a diluted share, compared with a net loss of $15 million, or 29 cents a share, in the year-ago period.
This story first appeared in the October 25, 2013 issue of WWD. Subscribe Today.
The company’s net sales for the three months ended Sept. 30 decreased 2.2 percent to $339.4 million, from $347 million in the year-ago period. Excluding unfavorable foreign currency exchange, sales gained 1.1 percent.
The results come less than a month after the beauty firm’s chairman and owner Ronald Perelman, who is also chairman and chief executive officer of MacAndrews & Forbes Holdings Inc., installed David Kennedy as vice chairman and interim ceo, replacing his previous successor Alan Ennis. One week later, on Oct. 9, Revlon completed its $665 million acquisition of The Colomer Group, a move that broadens the beauty firm’s reach into the professional channel with brands such as CND nail polish and America Crew hair care. Kennedy said the company is kicking off a “detailed integration plan over the coming months.”
He noted that the professional brands will broaden the company’s scope and complement Revlon’s mass-market beauty business.
During the quarter, global sales of the Revlon brand increased, but the Almay brand continued to struggle and saw sales decline, despite recent introductions such as Smart Shade CC Cream Complexion Corrector, an expanded range of eye makeup removers and the lip line called Color + Care Liquid Lip Balm. Chris Elshaw, Revlon’s executive vice president and chief operating officer, said those new products showcase changes that Almay is making across its packaging design, and that more improvements will be seen in the brand’s graphics and merchandising in the coming months.
By region, net sales in the U.S. during the quarter declined 3.2 percent to $185.8 million, hampered by lower net sales of both Almay and Revlon. In Asia-Pacific, net sales were down 3.3 percent to $58.9 million, but gained 4.8 percent in local currency. In Europe, Middle East and Africa, net sales gained 5 percent to $46 million, or 13.9 percent in local currency, boosted by higher sales of Revlon cosmetics in the U.K. and higher fragrance sales in Italy and South Africa. In Latin America and Canada, net sales decreased 3.2 percent to $48.7 million, but gained 2 percent in local currency, dragged down by business conditions in Venezuela.
For the nine-month period, net income was $27.3 million, or 52 cents a diluted share, compared with $4.6 million, or 9 cents a share, in the year-ago period.
Net sales declined 1.3 percent to $1.02 billion, compared with $1.03 billion in the prior-year period. Excluding foreign exchange, net sales gained 1 percent.