Revlon, Inc., the New York City-based cosmetics conglomerate, has announced a significant decline in its first-quarter revenues, as sales dropped by 18.1%. The decrease in sales can largely be attributed to the closure of physical stores due to the Covid-19 pandemic. Although Revlon experienced growth in e-commerce sales, it was not enough to offset the decline caused by the temporary closure of brick-and-mortar stores.

For the first quarter, which ended on March 31, 2020, Revlon reported net sales of $453.0 million, compared to $553.2 million during the same period the previous year. The company estimates that the coronavirus crisis had a negative impact of approximately $54 million on its sales during this period.

Revlon’s flagship brand, Revlon, experienced a 26.5% decline in quarterly sales, with revenues of $181.8 million. The Elizabeth Arden segment also saw a 14.5% drop in net sales, totaling $95.2 million. However, the decline in skincare and color cosmetics revenues was partially offset by an increase in Ceramide skincare sales.

The portfolio segment, which includes brands like Almay, SinfulColors, American Crew, CND, and Cutex, saw a decrease in net sales of 6.1%, totaling $110.0 million. The higher revenues from Mitchum anti-perspirant deodorants and Cutex nailcare products helped compensate for the declines in color cosmetics and men’s grooming. Sales in the fragrance segment amounted to $66.0 million, a 14.6% decrease compared to the previous year.

From a geographical standpoint, Revlon reported a revenue drop of 16.2% in North America, where sales totaled $233.5 million, down from $278.7 million. International sales also fell by 20.0%, from $274.5 million to $219.5 million.

Despite the challenges posed by the pandemic, Revlon’s president and CEO, Debbie Perelman, highlighted the progress made in the company’s e-commerce business. In a press release, Perelman emphasized that e-commerce sales had grown by 47% year over year, accounting for more than 12% of the total sales for the first quarter.

However, Revlon’s net loss for the quarter widened to $213.9 million, or $4.02 per diluted share, compared to a net loss of $75.1 million, or $1.42 per diluted share, during the same period the previous year.

Perelman remains optimistic about the future of the company, stating that despite the significant impact of the pandemic, Revlon has taken aggressive measures to mitigate the effects and is confident in its ability to emerge well-positioned to maintain its leadership position within the beauty category. She also acknowledged the resilience of the beauty industry and noted signs of strong sales activity in China and other markets.

To maintain liquidity during this challenging time, Revlon secured a new $880 million term loan facility on May 7, 2020, and used part of the funding to retire its $200 million 2019 term loan facility. The company currently has approximately $600 million in total available liquidity.

Revlon’s first-quarter results reflect the widespread impact of the Covid-19 pandemic on the beauty industry. As companies like Revlon navigate through these difficult times, they are taking strategic measures to weather the storm and position themselves for future success.

Useful links:
Revlon Official Website
Cosmetics Business