Revlon‘s (NYSE: REV) top line declined to $606.8 million, down 6% on a y-o-y basis in the recent Q2 earnings, primarily driven by net sales declines in the Revlon, Portfolio, and Fragrances segments, with a slight offset by net sales growth within the Elizabeth Arden segment.
Revlon operates under four global brand teams reporting its results under four new segments: Revlon, Elizabeth Arden, Portfolio brands, and Fragrances. Of these 4 segments, EA and the Portfolio segment have been profitable for Revlon and are gradually getting stronger contributors in the top line of the Company.
During recent earnings of Q2 FY2018, the Elizabeth Arden segment reported sales of $106.1 million, increased 4.9% y-o-y driven by Elizabeth Arden skin care products, including Ceramide and Prevage, largely in international markets and is likely to get stronger. Portfolio brands reported sales of $147.6 million, a 2.9% increase over 2017, driven by higher net sales of Almay color cosmetics following the brand’s relaunch, as well as higher net sales of CND nail products due to shellac innovation. On the other hand the Revlon segment decreased by 10.8% y-o-y to $258.3 million, driven by a downturn in the net sales of Revlon color cosmetics and Revlon ColorSilk hair color and Fragrance sales decreased 15.1% to $94.8 million due largely to loss of licenses.
Revlon is getting more aggressive in digital and e-commerce initiatives by setting up a new team of digital professionals realizing the importance of digital progress and social media in a brand’s reach and popularity among its clientele. Along with increasing ad investments, the company is also shifting most of its campaigns to the digital platform. Recently, Revlon collaborated with a leading digital consultancy, Sapient Razorfish, to create a stronger digital presence. These factors are positively working in its favor as an increasing number of customers are buying beauty products online.
For Q3 2018, Revlon continues to focus on strengthening their brands and enhancing the avenues through which they communicate and connect with their consumers. They are focused on ensuring broad availability of their products where the consumer shops in both brick and mortar and online. With the appointment of Debra G. Perelman as as their new CEO, Revlon is sure to get new energy and will advance on the path of brand transformation and will come out stronger in the coming years.
We have created an interactive dashboard What Are Revlon’s Key Sources of Revenues that shows Revlon’s key revenue sources and the expected performance in 2018. You can adjust the revenues to see the impact on earnings.
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