Revlon 2nd-quarter profit tops expectations
NEW YORK—Cosmetics maker Revlon Inc. said Thursday it posted a better-than-expected second-quarter profit as new products and strong international sales lifted results.
Revlon, which is controlled by financier Ron Perelman and markets such products as Almay cosmetics, posted profit of $19.9 million, or 4 cents per share, compared with a loss of $11.3 million, or 2 cents per share, a year ago.
Profit in the most recent quarter included a gain of $4.9 million on the sale of a facility in Mexico.
Analysts polled by Thomson Financial expected a penny per share profit.
Sales rose 8 percent to $376.4 million from $349.2 million. Excluding effects of the weaker dollar and other foreign currency fluctuations, sales increased 5.5 percent.
International sales rose 10 percent to $160 million from $145 million a year ago. All international regions posted sales growth and margin expansion, Revlon said.
In the U.S., sales rose 6 percent to $216.4 million because of higher shipments of Revlon color cosmetics and new product launches even amid a slowing consumer spending environment.
Chief Executive David Kennedy said the company remains focused on controlling costs and driving efficiencies to boost margins and cash flow. During the quarter, selling, general and administrative expenses declined 4.9 percent to $192.4 million.
In a conference call with analysts, Kennedy said new products and better advertising helped results in the second-quarter. Revlon has ramped up advertising and raised its profile by featuring celebrities like Jennifer Connelly and Halle Berry.
Looking ahead to later this year, Kennedy said the company plans on rolling out more color cosmetics for its Revlon brand.
SunTrust Robinson Humphrey analyst William Chappel, who rates the stock "Neutral," noted that domestic sales rose 6.6 percent from a year ago, even though U.S. consumer spending has softened. Humphrey said the company's turnaround appears on track.
"Encouraging to the Revlon story was the company's ability to maintain its respective color cosmetic brands market share during the second quarter, despite heightened competitive activity," Chappel wrote in a client note.
Shares of Revlon rose 7 cents, or 6.6 percent, to $1.13 in afternoon trading.
