Beauty Packaging Staff03.10.20
Revlon has announced it is implementing a Transformative 2020 Business Optimization Program, in an effort to improve profits and cash flow -- and it will cost nearly 1,000 jobs, Nasdaq reports.
Revlon's restructuring plan is expected to generate $200-$230 million in annualized cost reductions by the end of 2022, the company said in a statement -- with 60% of these cost reductions to be realized from headcount reductions occurring in 2020.
The goal of the 2020 Program is to build a stronger global business operation, enhance the company’s cost efficiency, and improve operating margin to continue accelerating the growth in operating income and profitability that the Company saw in 2019.
In addition, Jefferies Finance is helping to significantly enhance Revlon's capital structure by refinancing the company’s Senior Notes due February 2021 and 2019 Term Loan, extend the Company’s near-term maturities and deliver new funding for the business.
Debra Perelman, President and CEO of Revlon, states, "With an improved capital structure, increased liquidity, and more efficient and streamlined business, I am more confident than ever in our ability to take on the opportunities within our industry and continue to deliver for our key stakeholders, global customers and most importantly our deeply dedicated consumers."
Fourth Quarter & Full Year 2019 Financial Results: Elizabeth Arden's Skincare Sales Rose
Revlon has also released preliminary and unaudited fourth quarter and full-year 2019 financial results. The company operates in four reporting segments: Revlon; Elizabeth Arden; Portfolio; and Fragrances.
The Revlon segment's net sales decreased by 7.2% in the fourth quarter of 2019, compared to the prior year period, to $242.7 million. Revlon segment profit in the fourth quarter of 2019 was $42.7 million, compared to $54.0 million in the prior-year period.
The Elizabeth Arden segment increased by 7.5% in the fourth quarter of 2019 from the prior year period, to $168.0 million. Net sales of Elizabeth Arden skin care products, including Ceramide and Prevage, primarily internationally, drove this increase. The Elizabeth Arden segment profit was down during this quarter, however, due to the segment's higher brand support and lower gross profit margin, partially offset by higher net sales. Profit was $20.5 million compared to $22.1 million in the prior year period.
The Portfolio segment net sales of $133.7 million in the fourth quarter of 2019 decreased by 7.2% compared to the prior-year period, driven primarily by the segment's lower net sales of Mitchum products -- partially offset by higher net sales of American Crew and Creme of Nature products. Portfolio segment profit in the fourth quarter of 2019 improved to $20.0 million, compared to $13.7 million in the prior-year period. This was primarily as a result of lower overhead costs and brand support, as well as improved gross profit margin, partially offset by lower segment net sales.
The Fragrances Segment net sales of $155.0 million in the fourth quarter of 2019 decreased by 13.8% compared to the prior-year period, driven primarily by the overall softness in the U.S. mass fragrance category as well as the segment's lower net sales of Juicy Couture and Elizabeth Taylor fragrances. This was due in part to door closures and timing of innovation, and partially offset by higher net sales of Christina Aguilera fragrances. The Fragrances segment profit in the fourth quarter of 2019 was $28.7 million, compared to $34.8 million in the prior-year period.
Photo: screenshot via RevlonInc
