Revlon swings to a profit in Q4
NEW YORK — Following a “year of significant change and transformation,” Revlon saw a lift in fourth-quarter sales and swung to a profit.
Sales for the three months ended Dec. 31 totaled $501 million compared with $491 million in the year-ago period.
Net income totaled $2.7 million, or 5 cents per share, compared with a loss of $33.1 million, or 63 cents per share, in the year-ago period. The year-ago period includes charges related to the acquisition of The Colomer Group in October 2013.
Revlon president and CEO Lorenzo Delpani said, “2014 was a year of significant change and transformation, resulting in strong growth for Revlon’s business. We integrated TCG into the company and delivered the expected synergies and related cost reductions. We redesigned our organization and significantly increased our investment to build and support our key brands. We launched our Revlon Love Is On campaign in November 2014 and our Almay Simply American Campaign in January 2015. Thanks to our strategy of value creation and the integration synergies, our 2014 financial performance was the best in many years. On a Pro Forma, XFX1 basis, our 2014 net sales increased 4.7% and Adjusted EBITDA increased 12.9%, while at the same time we have substantially increased our brand support by $38.1 million, representing a 10.8% increase over 2013. We are pleased with these results and this motivates us to continue our efforts to re-position our core consumer brands and to maintain and build on the strong momentum of our professional business.”
In the consumer segment, net sales were $383.3 million in the fourth quarter of 2014, as compared with pro forma net sales of $390.5 million in the prior year period. On an XFX basis, net sales in the fourth quarter of 2014 increased 5.4%, primarily driven by higher net sales of Revlon and Almay color cosmetics, Revlon ColorSilk hair color and Mitchum products, partially offset by lower net sales of fragrances and SinfulColors color cosmetics.
Consumer segment profit in the fourth quarter of 2014 was $115.6 million, as compared with pro forma consumer segment profit of $107.0 million in the prior year period. On an XFX basis, consumer segment profit increased 17.6%, primarily driven by higher gross profit as a result of the increase in net sales, as discussed above, as well as decreased cost of sales as a result of favorable mix. This increase was partially offset by $8.6 million of higher brand support expenses to support the company's consumer brands in the fourth quarter of 2014 compared with the year ago period.