The beauty firm’s net losses for the fourth quarter widened more than sixfold to $179.4 million, or $3.44 a share. This compared with the year-ago deficit of $28.3 million, or 54 cents. The quarterly loss extends Revlon’s losing streak to 17 in a row. Investors were none too pleased and traded shares of the cosmetics firm down 18 cents, or 6.3 percent, to close at $2.70 Thursday on the New York Stock Exchange.
The quarter’s results were dragged down by charges of approximately $100 million from the firm’s growth and restructuring plan. The sum went toward selective product rationalization and pricing adjustments on several product lines. Up to $60 million in similar charges could be taken over the next two years.
Sales for the three months ended Dec. 31 fell 33.9 percent to $212.6 million from $321.7 million a year ago. The top-line drop reflected a $132 million increase in returns and allowances in the most-recent quarter, related to product rationalization, reduced distribution of the Ultima brand and pricing adjustments.
Revlon’s growth plan calls for increasing the effectiveness of its advertising and promotional spending as well as its in-store wall displays, discontinuing some products and tweaking prices on others while also investing in training and development of employees.
"We have accomplished a great deal in the past year," said president and chief executive Jack Stahl on a conference call. "Obviously, we recognize that there’s a tremendous amount of work still to be done."
Stahl joined Revlon, already in the midst of a massive turnaround, just over a year ago from Coca-Cola.
Reflecting on his time at the helm so far, Stahl told WWD in a telephone interview, "We have a wonderful brand that is proving to be very responsive to good marketing and at the same time our customers have been very willing and ready to work with us as we step up the overall marketing pressure against our business."
Currently, Revlon is in the second phase of a three-part turnaround. The first phase, characterized by cost rationalization through the consolidation of manufacturing and reduction of overhead costs, was largely completed in 2001 by Stahl’s predecessor, Jeffrey Nugent.