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Revlon announces second quarter financial results

Revlon

Revlon, Inc. announced its results for the quarter ended 30th June, 2020 with a reported net sales of $347.6 million, compared to $570.2 million during the prior-year period, a decline of 39.0%.

SEE ALSO : Kering announces financial results for first half of 2020

“Our adjusted EBITDA declined a modest 3% versus the prior-year quarter. We continue to deliver against the objectives of our Revlon 2020 Restructuring Program, which include rightsizing our organization to drive improved profitability, cash flow and liquidity. We are managing the business to conserve cash and liquidity, as well as focusing on stabilizing the business, growing e-commerce and preparing the foundation for our future growth. The exchange offer that was announced on 27th July, 2020 is consistent with this strategy to protect our liquidity during this uncertain time in the world and in our industry. Despite COVID-related business impacts, we continue to see pockets of resiliency in our business, including a strong 58% growth in e-commerce in the quarter. With our new streamlined operations and lower cost base, we are confident that Revlon is positioned to continue to serve our consumers and customers and drive value for all our stakeholders,” said Debra Perelman, Revlon’s President and Chief Executive Officer.

Revlon segment net sales in the second quarter of 2020 were $135.0 million, a $116.5 million or 46.3% (45.1% XFX) decrease compared to the prior-year period, with COVID-19 contributing an estimated $115 million ($116 million XFX) to the decrease. The segment’s lower net sales were driven primarily by Revlon color cosmetics, as well as lower international net sales of Revlon-branded professional products and Revlon ColorSilk hair color products, due primarily to the continuing effects of COVID-19 on the mass retail channel and on salon activity. This decrease was partially offset by higher net sales of Revlon-branded beauty tools and hair color products in North America.

Revlon segment profit in the second quarter of 2020 was $12.3 million, compared to $25.6 million in the prior-year period, driven primarily by the segment’s lower net sales and lower gross profit margin.

In North America, Revlon segment net sales of $80.1 million in the second quarter of 2020 decreased by $54.6 million, or 40.5% (40.3% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $50 million ($50 million XFX) to the decrease. In International, Revlon segment net sales of $54.9 million decreased by $61.9 million, or 53.0% (50.7% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $65 million ($67 million XFX) to the decrease, partially offset by continued strong growth in e-commerce net sales.

Elizabeth Arden segment net sales in the second quarter of 2020 were $80.9 million, a $36.5 million or 31.1% (29.6% XFX) decrease compared to the prior-year period, with COVID-19 contributing an estimated $34 million ($35 million XFX) to the decrease. The lower net sales were driven by certain Elizabeth Arden-branded skin care products and color cosmetics and certain Elizabeth Arden-branded fragrances due, in part, to the continuing effects of COVID-19 on foot traffic at department stores and travel retail outlets, partially offset by higher net sales of Ceramide skin care products predominantly in the Asia region. Elizabeth Arden segment profit was $10.8 million, compared to $2.7 million in the prior-year period, primarily due to the segment’s higher gross profit margin and lower brand support, partially offset by the segment’s lower net sales.

In North America, Elizabeth Arden segment net sales were $15.0 million in the second quarter of 2020, a decrease of $11.2 million, or 42.7% (42.7% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $11 million ($11 million XFX) to the decrease.  In International, Elizabeth Arden segment net sales of $65.9 million decreased by $25.3 million, or 27.7% (25.8% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $23 million ($24 million XFX) to the decrease.

Portfolio segment markets, distributes and sells a comprehensive line of premium, specialty and mass products primarily to the mass retail channel, hair and nail salons and professional salon distributors. Net sales of $88.5 million in the second quarter of 2020 decreased by $30.2 million, or 25.4% (23.5% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $30 million ($31 million XFX) to the decrease. The decrease in segment net sales was driven primarily by Almay color cosmetics, American Crew men’s grooming products and CND nail products due, in part, to the continuing effects of COVID-19 on the mass retail channel and salons, partially offset by higher net sales of Cutex nail care products and Creme of Nature hair care products, primarily in North America.

Portfolio segment profit improved to $14.5 million, compared to $6.1 million in the prior-year period, driven by the segment’s lower SG&A and brand support expenses as a result of cost reductions achieved through the company’s initiatives designed to mitigate the adverse impact of COVID-19 on the company’s operating results, as well as the Revlon 2020 Restructuring Program, partially offset by the segment’s lower net sales and lower gross profit margin.

In North America, Portfolio segment net sales of $52.1 million decreased by $20.9 million, or 28.6% (28.4% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $21 million ($21 million XFX) to the decrease.  In International, Portfolio segment net sales of $36.4 million decreased by $9.3 million, or 20.4% (15.8% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $9 million ($10 million XFX) to the decrease.

Fragrances segment net sales of $43.2 million in the second quarter of 2020 decreased by $39.4 million, or 47.7% (46.6% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $34 million ($35 million XFX) to the decrease. The segment’s lower net sales were driven primarily by the continuing impacts from COVID-19, especially in the prestige channel due to temporary door closures.

Fragrances segment profit was $7.8 million, compared to $12.6 million in the prior-year period, primarily as a result of the segment’s lower net sales, partially offset by higher gross profit margin and lower SG&A and brand support expenses, driven by cost reductions achieved through the company’s initiatives designed to mitigate the adverse impact of COVID-19 on the company’s operating results, as well as the Revlon 2020 Restructuring Program.

SEE ALSO : Capri announces financial results for first quarter of fiscal 2021

In North America, Fragrances segment net sales of $29.7 million decreased by $22.9 million, or 43.5% (43.5% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $22 million ($22 million XFX) to the decrease. In International, Fragrances segment net sales of $13.5 million decreased by $16.5 million, or 55.0% (or 52.0% XFX), compared to the prior-year period, with COVID-19 contributing an estimated $13 million ($13 million XFX) to the decrease.

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