“We ended the quarter on a strong trajectory with net sales growth up 3.5%, adjusted for foreign currency,” said Fabian Garcia, Revlon president and CEO. “Growth was driven by product innovation and strong performance by established brands in both the consumer and professional segments and in international territories. Among other growth drivers, we are delighted by the continued strength of Revlon’s flagship brand which has posted year-to-date consumption growth of 3.9%, outperforming the color cosmetic mass category.”
In his statement, Garcia noted that during the second quarter Revlon signed an agreement to acquire Elizabeth Arden, Inc. and that the company’s current growth trajectory would continue to provide a strong platform for a successful acquisition and integration. According to Garcia, the combined company will have the ability to enter or expand into faster growing categories, channels and territories, making Revlon a more diversified and stronger global player.
Revlon executive vice president and CFO Juan Figuereo said Revlon received a very strong and positive reaction from the debt markets, and has secured total financing commitments of approximately $2.7 billion, with favorable terms. As a result, Revlon still expects the deal to close by the end of 2016, subject to regulatory approval and customary closing conditions.
In Q2, consumer segment net sales increased 3.9%, primarily driven by higher net sales of Revlon color cosmetics, SinfulColors color cosmetics, Mitchum antiperspirant deodorants, and Cutex nail products, but the gains were partially offset by lower net sales of Almay color cosmetics. Consumer segment profit in the second quarter of 2016 decreased 2.5%, compared to the second quarter of 2015, primarily driven by the unfavorable impact of product mix and the impact of FX transaction within cost of sales.
Professional segment net sales were essentially flat. Higher net sales of Revlon Professional hair products and American Crew men’s grooming products throughout its international territories were offset by lower net sales of CND nail products due to the timing of product launches in the prior year quarter. Professional segment profit was essentially flat. The company’s “other” segment primarily includes the operating results of the CBB business, which generated $6.1 million in net sales in the second quarter of 2016, compared to $4.3 million in the second quarter of 2015.