Revlon Sees Lower 2006 Sales

Revlon Inc., the cosmetics company controlled by financier Ronald Perelman, forecast lower growth in 2006, due to weaker-than-expected sales growth amid disappointing performance of its Almay and Vital Radiance brands. The company also said it would delay a planned $75 million stock sale and refinancing of its credit facility, and slash costs across the business. Revlon projected 2006 adjusted earnings before interest, taxes, depreciation, amortization and other one-time items at or below 2005 levels, with most of the impact occurring in this year’s second quarter. The company reported 2005 adjusted EBITDA of $167 million and sales of $1.33 billion. This year’s weaker-than-expected sales was due to “less robust growth” from Vital Radiance and Almay due to increased competition, Revlon said. Revlon launched Vital Radiance, a cosmetics line aimed at women over 50 sold in mass retailers, in late 2005. The company said it was looking into revamping how it displays Vital Radiance in stores. Revlon said it would push back the stock sale to later this year or early 2007, and defer consideration of a proposed refinancing of its credit facility. Its current revolving credit facility and term loan expire in 2009 and 2010, respectively. The company also said it would achieve the cost cuts through outsourcing, cutting back on discretionary spending, and other moves. Revlon also said it wouldn’t meet its goal of a 12% operating margin by the end of 2008.