Garcia will be replaced by Paul Meister, who is currently a member of the board of directors, and will now oversee the company’s operations on an intern basis.
Although the Revlon executive team attempted to calm investors with news that Garcia is due to stay on until the end of February to ensure a smooth transition, company shares dipped more than 5% on the NYE Stock Exchange to close the day at $20.85.
Targeting future growth
Garcia thanked colleagues and investors in a press statement and added his belief that the company will continue to succeed thanks to its long-term growth plan to return to its status as a “trendsetter and pioneer in the industry”.
“This has been a difficult year for us balancing the successful integration of Elizabeth Arden with the rise of e-commerce and specialty beauty stores. We are aggressively catching up to that rapid transformation and I want to thank Fabian for his leadership through this challenging and dynamic period,” said Ronald O. Perelman, Chairman of the Revlon Board of Directors.
“I look forward to continuing to realize the benefits of the Elizabeth Arden acquisition and evolving to grow in this exciting new way of business. The company has gained momentum and is now poised for future growth.”
Fourth quarter results
The company also announced its preliminary fourth quarter results, estimating that new sales were approximately $785m, compared to $801m in the corresponding quarter last year.
This means that estimated full year sales should be approximately $2.7bn, compared to $2.3bn in 2016, a disappointing performance considering Elizabeth Arden business became a part of the business in the last quarter of 2016.
The slow sales means that the company’s bottom ls expected to be hard hit, underlined by estimates that its reported net loss for the fourth quarter 2017 will be in a range of approximately $60 million to $80 million, compared to $36.5 million in the fourth quarter of 2016.
‘A profound shift in the sector’
“The sector is experiencing a profound shift, but we’re gaining momentum on our strategy to respond to the accelerating pace of innovation and increasing migration to digitally-focused consumer engagement,” said company COO and CFO Chris Peterson.
“We’re also pleased with our continued growth in e-commerce and look forward to expanding our share of this important category.”
Peterson also added that rumors of a material asset transfer were untrue, stressing that this strategy was not a consideration.