Revlon posts strong Q2 results
NEW YORK Revlon experienced strong results for the second quarter of this year, according to a statement released Thursday.
The New York-based beauty products manufacturer had a net sales increase of 7.8 percent, to $376.4 million, compared to $349.2 million in the second quarter last year. Net sales in the United States grew by 6 percent, to $216.4 million, compared to $204.2 million in 2007. Meanwhile, operating and net income were $59.4 million and $19.9 million, respectively.
U.S. growth came mostly from new product launches for 2008, particularly in color cosmetics. These include the Almay brand TLC Foundation and Smart Shade Blush and Bronzer, which the company launched earlier this year and late in 2007, respectively, as well as Revlon brand Custom Creations foundation and ColorStay Mineral foundation, both launched early this year. The company also attributed growth to initial releases of new products for the second half of 2008.
“We believe we’ve got a competitive level of brand support behind all these new product launches,” President and chief executive officer David Kennedy said in a conference call with investors Thursday.
Energizer growth driven by personal care segment
ST. LOUIS Energizer Holdings’ stronger foothold in the personal care segment following last year’s acquisition of Playtex appears to be paying off as the personal care segment proved to be the growth driver during the third quarter.
For the quarter, total net sales increased $266.7 million, or 33 percent, to $1.07 billion due primarily to the acquisition of Playtex on Oct. 1, 2007, which added $246 million to net sales. Net sales in the legacy personal care business rose $31.4 million while net sales in the household products business dropped $10.7 million.
Net earnings for the quarter were $66.7 million, or $1.13 per diluted share, versus net earnings of $62.5 million, or $1.06 per diluted share, in the year-ago period. The current quarter includes an after-tax expense of $1.9 million, or 3 cents per diluted share, related to Playtex integration costs and a $4 million expense for income taxes, or 7 cents per diluted share, to adjust prior year tax accruals.
“General economic conditions continue to impact our battery business, and it remains to be seen if category softness will impact the upcoming holiday season,” stated Ward Klein, chief executive officer. “Within personal care, wet shave showed good growth behind the Quattro family of products, which was due in part to new product introductions earlier this year. In addition, we are pleased with Playtex’s solid business performance given our significant integration efforts, which remain on schedule. Finally, we were able to make good progress on reducing our leverage ratio and expect to be under 3.5 by the end of calendar 2008, if not sooner.”
On a constant currency basis, sales rose 4 percent in the personal care segment driven by higher wet shave and sun care sales, partially due to the inclusion of Hawaiian Tropic for the full quarter. Wet shave sales rose 4 percent due to $19.1 million in higher sales volumes spread across all geographic regions driven by the Quattro brand. Skin care net sales rose 11 percent due to higher sun care sales due partially to the inclusion of Hawaiian Tropic for the full quarter. Excluding Hawaiian Tropic, skin care net sales rose 7 percent. Feminine care net sales slipped 4 percent due primarily to the discontinuation of Beyond along with declines in plastic applicator tampons as the prior year quarter included the launch volume of the large count Sport product.
Segment profit rose $15.2 million to $83.2 million for the quarter. On a constant currency basis, segment profit rose $9 million.
Allegro plans combined showroom/design space
EL SEGUNDO, Calif. Allegro Manufacturing, a cosmetic bag designer and manufacturer, is opening in October a new showroom and design space based here.
According to Allegro senior vice president PJ Brice, the new Allegro Creative space will be a one-stop-shop for retailers. The fully staffed sample room will be capable of producing same-day, handmade samples. The space will also house a fabric library with materials sourced from around the world. The company’s marketing, sales and design teams will relocate to the space.
“This expansion is the next step toward positioning Allegro as a true design house and will serve as the showcase for our International Trend Service,” stated Brice. “The Allegro design and product development team attends fashion and fabric shows throughout the world’s trend capitals—from New York to Paris and Milan—and constantly monitor fabrics, colors and shapes to ensure up-to-the-minute information for our twice yearly trend report.”
In designing the 27,000-square-foot space, the company selected eco-conscious bamboo to floor the showrooms.
Brice noted that the expansion was made possible by Allegro’s acquisition by personal care company Conair in 2007.
“The investment Conair has made with the purchase of our new space is a wonderful indication of the support they put behind us,” stated Brice. The alliance has also opened doors for Allegro through cross-promotion, utilizing the strength and familiarity of the Conair brands.
Allegro posted sales of $48 million in 2005 and is projected to garner sales of $80 million in 2008, earning the company an 85 percent share of the soft-sided cosmetic storage market in North America.
With offices in Los Angeles and the United Kingdom, Allegro trades in more than 30 cities and maintains sales and distribution offices in London, Paris, Mexico City, Toronto, Sydney and Shenzhen. In addition, the company maintains two wholly owned manufacturing facilities in China and the Philippines and outsources to more than 25 factories in China. The company’s brands, including Trina, Celebrity and Modella, are retailed in more than 35,000 doors worldwide.