Revlon Net Loss Narrows on U.S. Demand, Reduced Operating Costs08 Aug 2007 • by Natalie Aster
Revlon Inc., the cosmetics maker controlled by financier Ronald Perelman, said its second-quarter loss narrowed on lower operating costs and higher U.S. sales, reported The Bloomberg.
The net loss shrank to $11.3 million, or 2 cents a share, from $87.1 million, or 20 cents, a year earlier. Revenue rose 8.8 percent to $349.2 million, New York-based Revlon said today in a statement distributed by Business Wire.
Selling, general and administrative costs declined after Chief Executive Officer David Kennedy discontinued the Vital Radiance cosmetics line and cut U.S. jobs. The company plans to increase marketing overseas and introduce new mascara and lipsticks in the second half of the year to lift sales of its flagship Revlon brand, which has lost market share in the U.S.
``Revlon does have a good pipeline of products to re- energize this line in late 2007 and early 2008,'' William Chappell, an analyst at SunTrust Robinson Humphrey in Atlanta, wrote in a note Aug. 2. ``It is now experiencing a lull in the core business as it refocuses its new product, marketing and sales efforts.'' He rates the shares ``neutral.''
Chappell had estimated a loss of 7 cents a share on sales of $314.7 million.
Shares of Revlon, which also sells Almay cosmetics, hair color under its own name and Mitchum deodorant, rose 1 cent to $1.04 yesterday in New York Stock Exchange composite trading. They have declined 19 percent this year.
Revlon products compete on drugstore and discounters' shelves with L'Oreal SA's Maybelline and Procter & Gamble Co.'s Cover Girl. Other product lines include Revlon tweezers, Ultima cosmetics and Charlie fragrances.
Kennedy, 60, in September became the third CEO since 1999. A week later, Revlon said it would do away with Vital Radiance after it failed to meet the company's sales expectations. The cosmetics line aimed at women over 50 was less than a year old.
Perelman's takeover of Revlon in 1985, using cash raised with the help of former Drexel Burnham Lambert Inc. junk-bond chief Michael Milken, left Revlon with about $2 billion in debt at the time.
As of April, Perelman owned 60 percent of Revlon through MacAndrews & Forbes Inc., an investment firm he controls, according to a Revlon regulatory filing.