Revlon results bear the brunt of charges, currency translations and lower overseas sales

By Simon Pitman

- Last updated on GMT

Related tags Revenue Generally accepted accounting principles Revlon

Revlon’s second quarter results struggle under the weight of charges, currency translations and falling sales in Europe and Asia, but strong results in the Americas help fend off bigger losses.

Net sales for the period were $357.1m, compared to a figure of $351.2m in the corresponding period last year. This figure represented a 1.7 per cent increase in sales, accounting for a $9.0m hit from fluctuations that otherwise would have seen sales rise by 4.2 percent.

The company said that its operating income was hit by a $6.7m charge for a pending litigation, giving a final figure of $42.8m, compared to a figure of $47.8m in the corresponding period last year.

Net and operating income hit by litigation charges

Likewise the net income figure was also hit by the same charges, but these were significantly down on the same period last year, when the charges were $11.3m relating to refinancing bank credit facilities.

This meant that the net income figure for the figure rose significantly, up from $6.5m in the corresponding period last year, to $11.1m for the current quarter.

“In the second quarter of 2012, we delivered top line growth of 4.2 percent and maintained competitive operating margins,”​ said Revlon president and Chief Executive Officer, Alan Ennis.

“From a marketplace perspective, we introduced successful, innovative, high-quality, consumer-preferred products into the marketplace, and, earlier this month, added the Pure Ice brand to our portfolio."

Color cosmetics lead the way

Breaking the sales figures down by brand, the company said that the result was particularly driven by higher sales of Revlon, Almay color cosmetics and Revlon ColorSilk hair color, on a worldwide basis.

On a geographic basis, the mainstay US market showed a strong performance, with sales increasing by 4.6 percent to $203.9m, a rise that was primarily attributed to Revlon color Cosmetics, while sales in Canada increased 6.2 percent to $20.7m.

In Asia Pacific and Europe, the figures were impacted by more difficult market conditions, with sales in Asia Pacific falling 2.9 percent to $55.8m, including the negative impact of currency fluctuations, and sales in the Europe, Middle East and Africa market falling 14.6 percent to $44.0m, a figure that was primarily impacted by currency fluctuations and distribution problems.

Latin America saw the biggest increase, with sales rising by 22.8 percent to $32.3m, a figure that was also impacted by negative currency fluctuations. Increases throughout the region were mainly attributed to Revlon, ColorSilk hair color and Almay color cosmetics sales.

For the full six months, net sales increased to $687.8m, a rise of 2.4 percent which was impacted by negative currency translation, whereas net income for the period stood at $19.6m.