THE WHAT? Revlon has reported its results for the first quarter of the current financial year. The US cosmetics firm saw sales dive 18.1 percent to US$453 million in the three months to March 31, 2020 compared to the prior year period.
THE DETAILS The negative impact of COVID-19 is thought to be approximately US54 million, Revlon said, meaning sales would have declined 6.5 percent on a constant currency basis excluding COVID-19 impacts.
Revlon was the worst hit with sales down 25.1 percent XFX, while higher net sales of Mitchum deodorant helped the Portfolio division report a more modest drop of 4.4 percent XFX. Elizabeth Arden sales dipped 12.3 percent due to the widespread closure of department stores, although Ceramide skin care sales were a highlight that helped mitigate sales losses.
“Although our business was significantly impacted during the first quarter of 2020 by the ongoing global COVID-19 pandemic, we have taken aggressive steps to mitigate these effects and feel confident that we will emerge well positioned to continue our transformation and maintain our leadership position within the beauty category. Beauty is a resilient industry and we are already seeing signs of a return to strong sales activity in China and other markets. Elizabeth Arden, e-commerce and our personal care products, including Revlon hair color, also maintained their strength despite the global closure of key markets. For the quarter, our e-commerce business grew approximately 47% and represented over 12% of our total net sales, almost doubling the scale of our e-commerce business since Q1 2019. With a streamlined operation, lower costs and a stronger balance sheet, we are confident that Revlon will be able to weather the pandemic crisis, continue to serve our consumers and customers and drive value for all our stakeholders,” said Debbie Perelman, Revlon’s President and Chief Executive Officer.
THE WHY? Revlon reported ‘significant impact’ from the ongoing GVC, although it was hardly thriving pre COVID-19 with sales routinely dropping in the high single digits prompting the company to announce a wide ranging restructuring and refinancing plan in March.