Fiscal 2011 Proves Fruitful for Revlon

Revlon, Inc. announced results for the year and the fourth quarter ended Dec. 31, 2011. For the year, net sales rose 4.5% to $1.38 billion, while operating income increased 2% to $203.3 million.

The increase was primarily driven by the inclusion of the net sales of Sinful Colors and higher net sales of Revlon and Almay color cosmetics and Revlon ColorSilk hair color. These increases were partially offset by lower net sales of Revlon beauty tools and lower net sales in Venezuela due to the June 2011 fire at the Company’s local facility.

However, net sales in the fourth quarter of 2011 slipped 2.5% to $359.8 million. In the United States, net sales fell 4.7% to $191.6 million. The decrease was primarily driven by lower net sales of Revlon color cosmetics, partially offset by higher net sales of Almay color cosmetics and Revlon ColorSilk hair color, and the inclusion of the net sales of Sinful Colors. Lower net sales of Revlon color cosmetics were unfavorably impacted by higher returns and higher promotional allowances.

“2011 was a year of many notable achievements. We delivered net sales growth of 4.5% and sustained highly competitive operating income margins. We delivered our fourth consecutive year of positive free cash flow and we improved our capital structure by refinancing and reducing our net debt,” said Revlon President and Chief Executive Officer Alan T. Ennis about the fiscal year in general. “From a marketplace perspective, our emphasis on effective brand communication and strong in-store execution drove our positive performance and we introduced a number of successful new, innovative, consumer-preferred products across our entire portfolio. We acquired the Sinful Colors brand and signed two of Hollywood’s most sought-after actresses, Emma Stone and Olivia Wilde, as Global Brand Ambassadors for the Revlon brand.”

For fiscal 2011, the results of operations related to Sinful Colors are included in the company’s consolidated financial statements commencing on the date of acquisition, March 17, 2011.

In the U.S., net sales in 2011 rose 3.9% to $757.4 million. The increase was primarily driven by the inclusion of the net sales of Sinful Colors and higher net sales of Almay color cosmetics and Revlon ColorSilk hair color. These increases were partially offset by lower net sales of Revlon beauty tools and Revlon color cosmetics.

In Asia Pacific, net sales rose 11.2% to $233.4 million, primarily due to higher net sales of Revlon color cosmetics in China and certain distributor markets, partially offset by lower net sales of Revlon color cosmetics in Japan and Australia. In Europe, Middle East and Africa, net sales jumped 4.1% to $208.7 million. The increase was primarily due to higher net sales of Revlon color cosmetics in South Africa and certain distributor markets, partially offset by lower net sales in Italy.

In Latin America, net sales in 2011 were $107.2 million, essentially unchanged year-over-year. Excluding the unfavorable impact of foreign currency fluctuations, net sales in Latin America increased $4.6 million, or 4.3%. The increase was primarily due to higher net sales of Revlon color cosmetics throughout the region and higher net sales of other beauty care products in Argentina. These increases were partially offset by lower net sales in Venezuela where the Company had not fully resumed business since the June 2011 fire.

In Canada, net sales in 2011 were $74.7 million, essentially unchanged year-over-year. Excluding the favorable impact of foreign currency fluctuations, net sales in Canada decreased $2.3 million, or 3.1%, primarily due to lower net sales of Almay color cosmetics.

Ennis concluded, “We continue to manage our business carefully, with an emphasis on maintaining our operating margins, as we remain focused on continuing to realize our strategic objective of profitably growing our business.”