Revlon Posts Loss In Third Quarter

Revlon Inc. reported a $22.1 million third quarter loss, hurt by unfavorable foreign exchange, higher marketing costs and a weak U.S. economy that cut into sales of fragrances and deodorants, according to executives. The company also warned that it may not meet one of the financial benchmarks in the fourth quarter required in its covenant with its creditors.

The maker of Revlon, Almay and Ultima cosmetics posted a net loss of $22.1 million, or $0.42 a share in the quarter, compared with a loss of $22.9 million, or $0.44 a share, a year ago. Sales rose to $323.2 million from $320.2 million a year ago, boosted by licensing fees.

However, Revlon’s loss from continuing operations grew to $17.9 million, or $0.34 a share, in the third quarter from $2.2 million, or $0.4, a year earlier. Results from continuing operations excluded restructuring items in both periods, executives pointed out.

Revlon has suffered from a heavy debt load and tough competition from Procter & Gamble Co., which owns the Cover Girl and Max Factor brands, and France’s L’Oréal, which owns May-belline. The company has been spending more money on advertising and marketing, especially on its Revlon brand, and executives said consumers are buying more Revlon color cosmetics, even as Almay consumption fell.

“Given the improvement in consumption we have seen as a result of more and better marketing support in the third quarter, we will increase brand support materially versus a year ago in the fourth quarter,” said Douglas Greeff, chief financial officer. He added that the company is “highly confident” that it can access liquidity needed to run its business.