Alan Ennis, president and chief executive officer of Revlon Inc., said things were looking up at the cosmetics company in 2011.
This story first appeared in the February 17, 2012 issue of WWD. Subscribe Today.
“It was our second consecutive year of top-line growth, which this company hasn’t done for some time,” Ennis told WWD.
He added that the company also delivered its fourth consecutive year of positive free cash flow.
In the fourth quarter, though, profits slid 87.7 percent since the company registered a big tax benefit in the year-ago period.
For the quarter ended Dec. 31, Revlon’s net income declined to $36.4 million, or 70 cents a diluted share, compared with $296.2 million, or $5.66 a share, in the year-ago period. Net income included a non-cash tax benefit of $16.9 million in the fourth quarter of 2011 and $260.6 million in the fourth quarter of 2010.
Operating income, which was not impacted by taxes, slipped to $66 million from $67.8 million. Net sales dipped 2.6 percent to $359.8 million, from $369.2 million a year earlier, driven by lower sales of Revlon cosmetics and higher product returns to make way for new items and product restages. Excluding favorable currency fluctuations, sales were essentially flat. Revlon continued to build out its product franchises, including PhotoReady and ColorBurst, with new items.
By region, net sales in the U.S. declined 4.7 percent to $191.6 million; sales in Asia-Pacific gained 4.9 percent to $63.8 million; sales in Europe, the Middle East and Africa ticked down by 1.4 percent to $55.9 million; in Latin America, sales declined 5.4 percent to $28.3 million, and in Canada, sales decreased 2.9 percent to $20.2 million.
For the year, Revlon’s net income was $53.4 million, or $1.02 a diluted share, down from $327.3 million, or $6.26 a share, in the prior year. Net sales gained 4.5 percent to $1.38 billion, driven by the acquisition of Sinful Colors. Excluding favorable currency fluctuations, net sales increased 3.3 percent.