Revlon Stems the Tide: Beauty Firm Returns to Black in 4th Quarter

Revlon Inc. found find its way back to positive quarterly earnings territory for the first time in six years, after reining in costs.

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Revlon’s latest offerings.

Photo By WWD Staff

Jack Stahl

Photo By WWD Staff

NEW YORK — It pays to manage costs.

Just ask Revlon Inc., which found its way back to positive quarterly earnings territory for the first time in six years after reining in costs. The improvement in the quarter also helped Revlon narrow its loss for the full year.

“We did achieve strong earnings performance, we dramatically strengthened our balance sheet with excellent investor support, and we paved the way for what we believe will be an exciting 2005,” Jack Stahl, president and chief executive officer, told analysts and investors during the company conference call.And while controlling costs bolstered the bottom line, management is counting on the revitalization of several core product lines as well as an early advertising campaign for new products to energize sales.

In the meantime, the New York-based beauty giant delivered robust fourth-quarter earnings. For the quarter ended Dec. 31, net income came in at $46.2 million, or 12 cents a diluted share, which compared with a loss of $12.6 million, or 18 cents a share, in the year-ago period.

According to Stahl, the timing of Revlon’s new product shipments have historically made the fourth quarter “disproportionately large.” But last year, Revlon slowed the pace of product introductions, choosing instead to put its elbow grease into revamping several of its existing franchises and gearing up for the coming year.

The pullback came at a time when the color cosmetics category softened. According to ACNielsen data, sales in the overall market fell 2.5 percent for the year and 4.3 percent for the fourth quarter.

Revlon’s sales for the fourth quarter increased 2.7 percent to $378.3 million from $368.5 million. North American sales inched up 0.9 percent to $251 million from $248.8 million.

The company’s combined market share for Revlon and Almay fell to 20.8 percent in the fourth quarter from 21.2 percent in the year-ago period, according to the ACNielsen data.

Stahl said Revlon is working with retailers to address the sales slowdown. The ceo named Revlon’s carded eye merchandising program and Almay’s new Intense I-Color eye makeup collection as two initiatives intended to catalyze sales within the beauty department.

Meanwhile, international sales rose 6.3 percent in the quarter to $127.3 million from $119.7 million. However, excluding the positive impact of currency exchange rates, international sales increased 1 percent.
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