Revlon’s Second Quarter Sales Down 2.4%

Revlon, Inc. announced net sales from ongoing operations for the second quarter fell 2.4% to $308.2 million, compared with $315.8 million last year, for the second quarter ended June 30. For the first six months, net sales from ongoing operations of $583.6 million were down 5.8%, including the impact of unfavorable foreign currency translation. The decline was due to unfavorable foreign currency translation in Latin America, which more than offset a modest gain in sales in North America. Excluding the unfavorable impact of foreign currency translation, net sales in the quarter were substantially even with last year.

In North America, net sales grew 0.4% to $217 million for the quarter, slightly up from $216.2 million in the second quarter 2001. International net sales of $91.2 million in the quarter were down 8.4% versus $99.6 million in the second quarter of 2001, again reflecting the unfavorable impact of foreign currency translation. Excluding the unfavorable impact of foreign currency translation, international net sales were down 1.5% in the quarter.

Operating income for the quarter was $7.9 million versus $19.5 million in the same period last year, due to accelerated amortization and other charges of approximately $11 million and higher departmental and other general and administrative expenses during the quarter, partially offset by lower investment in brand support during an intensive marketing mix review.

In terms of U.S. marketplace performance, ACNeilsen said Revlon brand color cosmetics registered a 0.4% increase in dollar consumption for the quarter, marking its second consecutive quarterly consumption gain. For the first six months of 2002, dollar consumption for the Revlon brand color cosmetics was up 1.6%. Conversely, Almay color cosmetics dollar consumption decreased 4.4% in the second quarter, driving the company’s total color cosmetics consumption for the quarter down 2.3% versus last year.

The company’s color cosmetics dollar market share for the second quarter of 22.3% was approximately the same as the first quarter of this year. Importantly, Revlon continues to narrow its color cosmetics share. In the hair color category, Revlon showed continued strength during the quarter, and market share gains were also registered in the antiperspirant/deodorant and face creams and lotions categories, while market share declined for implements.

“During the quarter, we made solid progress across a number of dimensions,” commented Jack Stahl, president and chief executive officer. “We have further strengthened our management team, we have identified a clear strategic path and detailed action plans for the business, and we are beginning to roll out new marketing and merchandising initiatives that will become evident in the marketplace as we move forward. We are confident that the strategies and plans we have developed and the ongoing improvements we are making in day-to-day execution will greatly improve our performance over time.”