THE WHAT? Revlon has announced its results for the second quarter of fiscal 2020. The US make-up giant saw net sales plummet 39 percent yoy to US$570.2 million. However, e-commerce was a bright spot, growing 58 percent versus the prior-year period to account for some 18 percent of sales, versus 7 percent in the same three months of 2019.
THE DETAILS Gross profit was also down some 38.8 percent (adjusted) to US$201.5 million.
Fragrance was the group’s hardest hit sector with sales dropping 46.6 percent, although the company’s namesake brand barely fared better with a loss of 45.1 percent. Elizabeth Arden was less impacted, to the tune of -29.6 percent.
“Although our business faced significant headwinds in the second quarter of 2020 as result of the ongoing global COVID-19 pandemic, we took aggressive steps to mitigate these effects, which enabled us to greatly reduce the pandemic’s impact to our profitability in the quarter,” said Debra Perelman, Revlon’s President and Chief Executive Officer.
“As a result, our Adjusted EBITDA declined a modest 3 percent versus the prior-year quarter. We continue to deliver against the objectives of our Revlon 2020 Restructuring Program, which include rightsizing our organization to drive improved profitability, cash flow and liquidity. We are managing the business to conserve cash and liquidity, as well as focusing on stabilizing the business, growing e-commerce and preparing the foundation for our future growth. The Exchange Offer that was announced on July 27, 2020 is consistent with this strategy to protect our liquidity during this uncertain time in the world and in our industry. Despite COVID-related business impacts, we continue to see pockets of resiliency in our business, including a strong 58 percent growth in e-commerce in the quarter. With our new streamlined operations and lower cost base, we are confident that Revlon is positioned to continue to serve our consumers and customers and drive value for all our stakeholders.”
THE WHY? Revlon attributed the decline to the GVC, with COVID-19 accounting for US$214 million of estimate negative impacts – without which, sales would have been essentially flat, the company said, meaning that it remains on track with its transformative restructuring program.