Revlon profits slide on slow sales and strong dollar
The company said that net sales for the period fell by 2.5 percent to €326.2m, compared to $334.4m in the corresponding period last year.
The sales figure was negatively impacted by $5.8m from currency translation, which meant that sales in local currencies fell by only 0.7 percent, compared to last year.
Net profit fell from $29.2m in the corresponding period last year, to $23.1m, a figure that disguised the fact that the company’s comprehensive cost cutting measures have continued to positively impact operating margins.
Share values continue to rise
Despite the fact that the results were below market expectations share prices have continued to rise, increasing by over 9 percent in morning trading on the New York Stock Exchange today, to reach $9.19.
Share prices had already peaked at $8.46 on Friday, rising more than 50 percent since the beginning of October on the back of buy recommendations from analysts.
“The organizational restructuring that we fully implemented earlier this year is delivering cost savings in line with our expectations and is enabling us to continue to strengthen our brand and become stronger,” said Revlon CEO, Alan Ennis.
Color cosmetic sales slump while hair color rises
In the same statement, Ennis also pointed out that the rate of growth fell for its color cosmetics business in the North American market, which was partly offset by higher sales of its ColorSilk hair color.
Net sales in the US market fell by $5.7m, or 3 percent, to $183.7m, while sales in its international market fell by $2.5m, or 1.7 percent to $142.5m.
Excluding the negative currency impact, international net sales increased by 2.3 percent, driven by strong gains in both the Latin America and Asia Pacific markets.
For the first nine months of the financial year, sales decreased by 6.1 percent to $951.3m, while net income fell from $46.6m to $36.0m.
