Revlon reported that its fourth-quarter revenue dropped 1.8% and its net loss more than doubled as a sharp decline in North American sales was partly offset by strong international growth in the Elizabeth Arden business.
The beauty company’s revenue for the three months ended Dec. 31 fell to $786.6 million from $800.7 million in the year-ago period. Its net loss widened to $76.9 million, or $1.46 per share, from $36.5 million, or reflecting in part a $47.9 million expense associated with a reduction in deferred tax assets as a result of the U.S. corporate tax cuts.
Revlon had projected it would lose between roughly $60 million and $80 million in the fourth quarter. On an adjusted basis, it lost 86 cents per share compared to a profit of 43 cents a year earlier.
Following Revlon’s release of preliminary results in February, Standard & Poor’s downgraded the company’s credit rating further into junk territory, citing its mounting losses amid intense competition in the beauty products industry.
As USA Today reports, Revlon, like many traditional retail companies and brands, “has been facing headwinds from more nimble competitors like Sephora and Ulta, which are known for their engaging in-store experiences, as well as the success of online giant Amazon and other beauty sites.”
The company in January also announced that CEO Fabian Garcia would step down after a tenure of less than two years. “This has been a difficult year for us balancing the successful integration of Elizabeth Arden with the rise of e-commerce and specialty beauty stores,” Chairman Ronald Perelman said at the time.
In the fourth quarter, Elizabeth Arden was something of a bright spot, posting a 2.3% increase in net sales that was primarily driven by growth in branded skin care and fragrances internationally.
While Elizabeth Arden sales fell 9.4% in North America, the segment’s international sales jumped 20.7%. Revlon said it experienced “continuing declines across several beauty categories within the U.S. mass retail channel, partially offset by higher net sales of Revlon color cosmetics.”