Make-up manufacturer Revlon has had to battle against a struggling color cosmetics market in the US but remains positive as although profits are down, there has been a small sales increase, particularly in the Professional segment.
The maker of hair color and make-up saw its profits decline in the second quarter, coming in at 34 cents a share, below estimates and last year’s figures of 47 cents per share. Sales grew 2.8% to $497.9 million.
Lawrence Alleto, Executive Vice President and CFO, adds that reported second quarter 2014 results reflect the inclusion of the net sales of the brands acquired from Colomer with no comparable results in the prior period.
Professional Products boost
One area that has seen success is the Professional Products as global sales grew 6.7%, and the combination of Professional and Consumer sales in the US grew faster than sales in other countries.
The company says that in the US, consumers are buying the Color Silk Hair Color and the Sinful Colors color cosmetics, and this is helping to boost sales.
Speaking on a conference call after the results were announced, Lorenzo Delpani, President and CEO, said that net sales in the Consumer division were positively impacted by Revlon color cosmetic and Revlon ColorSilk, but were unfavorably impacted by the Almay performance.
“All-in-all, we consider this a good quarter,” he stated. “As you know a significant part of our business is in the US, mass color cosmetic category, which is declining year-to-date into '14 versus 2013.”
Delpani explained that while, the color cosmetic category in the US continues to be softer, Revlon remains focused on supporting its brands with the intent to grow market share and develop its business.
“To that end, we have increased our advertising spend by $11.7 million in the second quarter versus last year, which was primarily in support of our consumer brands. Year-to-date, we have spend $20 million more than last year, which is a 16% increase,” he added.