Revlon profits take a big hit by weaker US sales
Net sales for the period dipped by 2.2 per cent compared with last year, coming in at $319.0m, compared with $326.2m in the third quarter of 2009.
The figure reflected double digit increases in Europe and strong growth in Asia but these gains were weighed down by a big fall in the North American market and modest growth in Latin America.
In the US, the company’s biggest market, net sales fell by 9.3 per cent to $166.7m, a result that was largely affected by a poor performance from the company’s color cosmetics range and its Almay brand.
Colour cosmetic sales thrive in UK and South Africa
In Europe, Middle East and Africa net sales increased by 13.5 per cent to $50.6m, a figure that was driven by higher sales of colour cosmetics in both the UK and South African markets.
In Asia Pacific sales were up by 5.4 per cent to $54.5m, a figure that was largely attributed to the positive impact of currency translations. Lower sales in Australia and Japan were offset by other beauty care sales throughout the region.
However, despite the gains in other regions, the poor performance in the US market impacted the bottom line significantly, with net income falling from $23.1m to $12.5m in the current quarter.
Venezuela troubles impact Latin America
In the Latin America market the results were significantly impacted by currency devaluation and high inflation in the Venezuela market. This meant that net sales for the region edged up by just 3.0 per cent to $76.0m.
Excluding the Venezuelan results for the quarter, sales in the region increased by 31.8 percent to $24.1m.
Revlon reported the news about the Venezuela market on the same day that both Colgate-Palmolove and Avon reported that there Latin American results were hit by the same problems in Venezuela.
Sales essentially 'unchanged'
“Our net sales during the third quarter were essentially unchanged year over year; we delivered growth in many of our markets globally, offsetting a decline in the US,” said Revlon CEO Alan Ennis.
“We recently strengthened our senior management team, including the appointment of Julia Goldin as global chief marketing officer.”
Ennis went on to state that Goldin’s appointment was part of the company’s focus on the launch of a string of ‘consumer-preferred’ product lines throughout the financial year 2011 and beyond.
For the first nine months of the financial year, the company reported that group net sales were essentially lever at $952.2m, compared to $951.3 fro the same period in 2009. Net income was $31.1m, compared to $36.0m.