Revlon sales up, but profits fall on refinancing charges

Color cosmetics maker Revlon reported a healthy rise in its second quarter sales, but profits take a big hit on refinancing charges.

Net sales increased by 7.2 percent to $351.2, up from $327.7m in the corresponding period last year. Excluding $10.5m in revenues from foreign currency translations, sales during the period increased by 4.0 percent.

Net income fell by over 60 per cent, from $16.4m in the corresponding period last year, to $6.5m, a figure that was negatively impacted by a charge of $11.3m for refinancing and reducing debts.

"From a marketplace perspective, we introduced successful, innovative, high-quality, consumer-preferred products into the global marketplace, and our acquisition of Sinful Colors is transitioning well and performing to expectations,” said Revlon CEO Alan Ennis.

Sinful Colors and make-up lead the way

The company also pointed to the fact that sales gains had been achieved by improvements in its mainstay Revlon color cosmetics range.

“In the quarter, we improved our capital structure by refinancing our bank credit facilities, reducing the interest rates on our debt and extending maturities,” Ennis added.

On a regional basis the company also posted significant gains in its largest market, the US, where revenues increased by 8.7 percent to reach $194.9m – a figure that was mainly attributable to the Sinful Colors sales.

Asia Pacific reports strong gains

In Asia Pacific sales increased by 20.1 percent to $58.5m on the back of higher Revlon color cosmetics sales in China and Australia, a figure that represented an increase of 8.6 percent when factoring in currency fluctuations.

In the Europe, Middle East and Africa market sales climbed 3.6 percent to $52.0m, but negative currency fluctuations meant this figure actually fell by 6.8 percent.

In the Latin America market the company recorded a drop in sales of 8.4 percent to $26.3m, a figure that was largely hit by the unfavorable change in exchange rate for Venezuela’s local currency against the US dollar.

For the full six months the company recorded sales up 8.1 percent to $684.4m, while net income fell from $18.6m, to $16.9m.