Revlon Sales Decline, Loss Narrows

Revlon Inc. reported further dips in net sales for the second quarter, due to declines in some of the company’s smaller brands and the fragrance segment.
Revlon’s net sales fell 6 percent to $570.2 million in the quarter, but the net loss narrowed from $122.5 million in the prior-year period, to $63.7 million. Net loss per common share was $1.20.
“We continue to see headwinds in our North America business,” Revlon chief executive officer Debbie Perelman told Wall Street analysts on Thursday. Some of those problems are because of a decline that the industry is experiencing in mass cosmetics, she added. Some of Revlon’s brands, like Pure Ice and Sinful Colors, have also lost shelf space.
In the quarter, Revlon’s biggest sales dip came from portfolio segment, which includes brands like Cutex and Mitchum. Sales in that business were down 19.6 percent in the quarter, to $118.7 million. Declines were due to lower sales of CND nail products, Almay and Sinful Colors, the company said.
Almay is currently rolling out new products and “leaning heavily into clean heritage,” Perelman said. Almay was one of the first hypoallergenic makeup brands. New launches include biodegradable face wipes, she noted.
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Sales in the fragrances division also suffered, dropping 12.9 percent to $82.6 million due to lower sales across mass retail, which Revlon said was partially because of store closures.
Revlon brand sales, including color cosmetics, hair color and beauty tools, were down 2.6 percent. That brand has struggled in North America with lower sales of makeup products.
Perelman said that the mass category in North America broadly was struggling due to declines in foot traffic and a decrease in product innovation, combined with more promotions.
Elizabeth Arden was the only segment that saw gains, with a 10.7 percent increase in sales to $117.4 million in the quarter. For Arden, skin care is selling well, especially the Ceramide and Prevage lines.
On a global front, Perelman said the international business is growing, and that Revlon and Elizabeth Arden posted double-digit growth internationally in the second quarter.
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Broadly, Revlon's business is impacted by tariffs, executives said on the call Thursday, and is considering upping pricing or changing sourcing in certain cases.
Revlon’s e-commerce business is a bright spot, and now makes up 7 percent of total sales, up from 5 percent in the prior-year period. Perelman said she didn’t want to comment specifically on size aspirations for e-commerce, but that it could potentially one day be in line with competitors at 10 to 15 percent of the overall business.
On Aug. 6, Revlon entered into a new $200 million senior secured term loan facility that executives said would be used to fund the company’s “transformation efforts” as well as invest in core strategies, innovation and general corporate purposes. The loan is secured by the American Crew brand, SEC filings show.
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