Revlon posts Q2 results

Larry Alletto appointed as CFO

NEW YORK — Beauty company Revlon announced on Wednesday that net sales were essentially flat during the second quarter due, in part, to continued softness in its Almay brand.

During its conference call with analysts Wednesday morning, the company also announced that Bob Kretzman, chief administrative officer, will retire at the end of September, following a 25-year career at Revlon. Kretzman will join Revlon's board of directors, effective Oct. 1.

Larry Alletto will join the company as EVP, CFO and will assume the role of chief administrative officer upon Kretzman's retirement. Alletto, who has a 26-year career in the financial services industry, most recently was managing director and global head of financial sponsors group at JPMorgan Chase & Co.

As previously reported by Drug Store News, Revlon’s EVP and CFO, Steve Berns, resigned from the company, effective July 19, to become EVP and CFO of Tribune Co., a multimedia company.

Net sales for the quarter ended June 30 were $350.1 million compared with $357.1 million in the year-ago period, a decrease of 2%. Excluding unfavorable foreign currency fluctuations of $6.4 million, second quarter 2013 net sales were essentially unchanged year-over-year.

The company stated that lower net sales in Venezuela and lower net sales of Almay color cosmetics were offset by higher net sales of SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice. The decrease in net sales of Almay color cosmetics was driven primarily by a reallocation of brand support in the United States from advertising to promotional allowances, which are a deduction in arriving at net sales.

Net income for the quarter totaled $24.7 million, or 47 cents per diluted share, compared with $11.1 million, or 21 cents per diluted share, in the year-ago period.

"Our net sales in the second quarter of 2013 were essentially unchanged year-over-year as we benefited from the inclusion of our Pure Ice acquisition offset by continued softness in our Almay brand and the negative impact of business conditions in Venezuela. We continue to support our brands at appropriate levels and are pleased with a number of our new product launches in 2013. As always, we remain focused on our strategic goal of driving profitable growth," stated Revlon president and CEO Alan Ennis.

In 2011, a fire destroyed the company’s facility in Venezuela. Operating income in 2013 included an $18.1 million insurance gain related to the fire, a $4.5 million charge for estimated costs to clean up of the Venezuela facility, as well as a $3.3 million charge associated with the restructuring and related actions announced in September 2012.

In the United States, net sales totaled $203.9 million, essentially unchanged year-over-year. Higher net sales of SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice were offset by lower net sales of Revlon and Almay color cosmetics.

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