The US-based company reported that it earned $36.4m for the quarter ended December 31, down from $296.2m last year.
Revlon's revenue declined 2.5 percent to $359.8 million as its sales fell around the globe, except in China. Full year profits came in at $53.4m compared with $327.3m.
Clearing the way for innovation
The company explained that sales in the US were down, and there was a high level of returns and allowances, due to the company clearing the way for the new product introduction for 2012.
“In the US marketplace the new products for the following year are shipped in the fourth quarter and hence the returns are associated with those shipments,” said CEO Alan Ennis.
In Europe, Revlon has some major markets, such as the UK, as well as the market in South Africa, where it has a number of distributor markets; all of which are being affected by the economic environment in these regions.
“There is no special category for cosmetics that's doing particularly differently. We are not highly exposed to some of the markets, which are having the most difficult times. Meanwhile, we do see some slow growth in some places, but we're very focused on executing our plan,” explained Chris Elshaw, COO.
Slow down
“The cosmetics category in the US had continued to be showing reasonable growth and that continued in the fourth quarter,” Elshaw continued.
“Although, started to slow down slightly towards the end as ever competition remains intense in that category, not only between ourselves and our competitors, but between our customers.”
Sales for the year increased to $1.38bn from $1.32bn, largely due to its acquisition of Sinful Colors in March, which was partially offset by lower sales of its beauty tools and products in Venezuela.
A fire destroyed the cosmetic maker's plant in Venezuela in June, and the company has not fully resumed business there yet.