Revlon reports 12.2% drop in net sales for Q2

NEW YORK Revlon announced on Thursday a 12.2% decrease in second-quarter net sales due to lower sales of Revlon and Almay color cosmetics and Revlon Beauty Tools.

"In the second quarter of 2009, while the mass color cosmetics category in the United States, according to ACNielsen, continued to grow, the rate of growth slowed and certain retailers reduced inventory levels versus the year-ago period," stated Alan Ennis, Revlon president and CEO. "These factors, along with the unfavorable effect of foreign currency fluctuations, impacted our second-quarter results."

Net sales for the quarter totaled $321.8 million, compared with $366.5 million in the year-ago period, a decrease of 12.2%. Excluding unfavorable foreign currency fluctuations, net sales decreased 7.6%. The company noted that the drop in net sales was driven by lower net sales of Revlon and Almay color cosmetics and Revlon Beauty Tools, partially offset by higher net sales of Revlon ColorSilk hair color.

Net income for the quarter totaled $0.2 million, or nil per diluted share, which included $18.3 million, or 36 cents per diluted share, of restructuring charges. This compares with $19.9 million, or 39 cents per share, in the year-ago period.

In late May, the beauty company announced a worldwide organizational restructuring that involved consolidating certain functions; reducing layers of management to increase accountability and effectiveness; streamlining support functions; and further consolidating the company's office facilities in New Jersey. The moves resulted in the elimination of roughly 400 positions worldwide, including about 325 current employees and 75 open positions.

The restructuring, which has been fully implemented, is reducing Revlon's annualized costs by $30 million, of which $15 million is expected to benefit results in the second half of 2009, according to Ennis.