Revlon, Inc., a cosmetics company based in New York, has avoided filing for Chapter 11 bankruptcy after reaching a last-minute debt deal. The company had previously informed stakeholders that it might need to seek bankruptcy protection if $342.8 million in bonds remained outstanding by mid-November. However, 68.8% of these outstanding bonds, amounting to $236 million, have entered into an exchange offer with Revlon. The company provided them with the option of receiving 32.5 cents on the dollar in cash or a combination of cash and new debt.

This debt deal is seen as sufficient by Revlon, and it believes that bankruptcy proceedings are unnecessary at this time. Alongside this announcement, the company shared its financial results for the third quarter of 2020. During this period, net sales amounted to $477.1 million, reflecting a 20.1% decline compared to the same period in 2019. This decrease in sales can be attributed to the negative impact of the Covid-19 pandemic. However, Revlon did experience a 13% increase in sales from its e-commerce business, partially offsetting the overall decline.

The Revlon segment, which includes its flagship cosmetics brands, saw sales decrease by 23.6% to $166.0 million in the quarter. This drop was primarily driven by a 13.6% decline in North America and a 32.1% decrease in international revenues. The decline was largely influenced by decreased sales of color cosmetics and professional haircare products. The Elizabeth Arden segment also faced a decline in revenues, falling by 13.7% to $106.3 million, with North American and international sales decreasing by 3.4% and 19.1% respectively.

Revlon’s portfolio segment, which encompasses brands like Almay, SinfulColors, American Crew, and CND, reported net sales of $99.6 million, reflecting a 15.7% year-over-year decline. Additionally, the fragrances segment experienced a 23.8% decrease in revenues, amounting to $105.2 million. Despite these challenges, Revlon’s President and CEO, Debra Perelman, expressed satisfaction with the sequential improvement in net sales decline compared to the previous quarter, highlighting the ongoing impact of Covid-19 on the beauty industry.

In terms of financials, Revlon reported a net loss of $44.5 million, or $0.83 per diluted share, for the third quarter of 2020. This is slightly lower than the loss of $44.7 million, or $0.84 per diluted share, recorded in the same period last year. For the first nine months of the fiscal year, the company’s revenues totaled $1.28 billion, a decrease from $1.72 billion in the previous year. The net loss for the nine-month period was $385.2 million, or $7.22 per diluted share, compared to a loss of $183.5 million, or $3.46 per diluted share, in the same period last year.

Revlon has not provided any financial guidance for the fourth quarter or the full fiscal year at this time. Despite the challenges posed by the ongoing pandemic, the company remains hopeful for a recovery in the near future as they navigate these unprecedented times in the beauty industry. With the debt deal in place, Revlon is taking steps to overcome its financial struggles and continue providing its customers with high-quality cosmetics and beauty products.

Useful Links:
1. Revlon Official Website
2. Revlon News on Reuters