Revlon posts dip in sales, expands restructuring plan
New York-based beauty company Revlon, Inc. announced a 1.8% year-over-year decline in its first-quarter sales on Monday and revealed the Revlon Global Growth Accelerator, an expansion of its existing Revlon 2020 Restructuring Program, which refocuses the group’s growth-driving efforts around its namesake Revlon and Elizabeth Arden brands.
In the first quarter ended March 31, 2021, the company’s net sales came to $445.0 million, compared to $453.0 million in the prior-year period. This decrease was primarily related to the effects of the Covid-19 pandemic, which Revlon estimates had a negative impact of approximately $44 million on its Q1 revenues.
The company’s Elizabeth Arden and fragrance segments both achieved double-digit growth in the quarter, with the former posting sales of $112.2 million – up 17.9% from the same period in the previous year – while the latter saw its sales rise 13.3% to $74.8 million.
The group’s flagship Revlon brand, however, did not do so well. Its sales fell 10.9% year over year, from $181.8 million to $162.0 million. The company’s portfolio segment, which includes brands such as Almay, SinfulColors, American Crew, CND and Cutex, also saw its sales drop 12.7% to $96.0 million.
Broken down by geography, Revlon’s sales in North America fell 3.1% to $226.2 million in North America and 0.3% to $218.8 million internationally.
Overall, sales in the company’s e-commerce channel grew approximately 5% year over year and represented 13% of the group’s total quarterly revenues, compared to 12% in Q1 2020. The channel’s progress in the quarter reflects double-digit growth in the company’s mass retail, professional and prestige franchises in EMEA, as well as in mass retail in Asia, and in professional and prestige in North America.
Despite the overall declines in its revenues, the group was able to narrow its loss in the quarter. Revlon’s total net loss for Q1 2021 was $96.0 million, or $1.79 per diluted share, compared to a loss of $213.9 million, or $4.02 per diluted share, in the prior-year period.
The company’s expanded Revlon Growth Accelerator Program is structured around three main initiatives. Firstly, the group intends to increase organic sales growth and has set a target of achieving a mid-single digit compound average annual growth rate through 2023.
The second pillar focuses on driving operational efficiencies and cost savings in order to fuel investments for top-line growth. The company intends to deliver annualized incremental cost reductions of around $75 million to $95 million through 2023.
Finally, Revlon hopes to build its capabilities, while also up-skilling employees and developing its company culture.
According to the group, its efforts will focus on the Revlon and Elizabeth Arden brands, especially in key markets and channels, such as U.S. mass, U.S. prestige, EMEA and China, as well as its global e-commerce business.
“Our Revlon Global Growth Accelerator Program […] is a holistic transformation program that is designed to set the foundation for long-term, sustainable margin and revenue growth,” said Revlon president and CEO Debra Perelman in a release.
“We continue to anticipate a recovery in demand for beauty products including color cosmetics as the pandemic restrictions ease globally and believe that with the focus of RGGA, we are well positioned to capture the opportunities ahead for Revlon,” added the executive.
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