BEAUTY CARE

Bare Escentuals slips in Q2

BY Antoinette Alexander

SAN FRANCISCO Bare Escentuals, a manufacturer of mineral-based cosmetics, posted a dip in second-quarter sales and profits.

Sales for the second quarter ended June 28 totaled $132.5 million, a decrease of 4% from $138.5 million in the year-ago period.

Net income for the quarter totaled $19.8 million, or 21 cents per diluted share, in line with at least one analyst’s estimate and a penny above the Street. This compares with $24.7 million, or 26 cents per share, in the year-ago period.

“Despite the overall revenue shortfall, we were actually impressed with the 5.2% year-over–year growth in the North American retail segment (59% of revenue).  Not only was this better than our estimate (essentially flat), but it was also substantially better than the 8% decline for the entire prestige cosmetics category during the quarter,” stated analyst William Chappell of SunTrust Robinson Humphrey in a research note. “We believe this growth was driven by: 1) the relative stability of the foundation segment of the category which represents a large part of Bare’s revenue base; 2) enhanced marketing programs such as 500K sample shipments during the quarter; and 3) the success of the lower price point kits which have gained traction with more price conscious consumers.”

As a result, Chappell raised the earnings per share estimates slightly by a penny for 2009 and 2010 to 86 cents and 96 cents, respectively.

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Maybelline New York kicks up its heels with Broadway cast at NYC Rite Aid

BY Antoinette Alexander

NEW YORK Beauty mavens and Broadway fans flocked to New York City’s Grand Central Station on Thursday to take part in an event hosted by Rite Aid and Maybelline New York to celebrate the launch of Maybelline New York’s new Color Sensational Lipcolor.

Highlighting the event, which attracted a steady stream of attendees, were live musical performances by the cast of Broadway’s “Chicago.”

In addition, professional makeup artists provided lip-scriptions to help women find their perfect lip shades and to offer mini Sensational Lipcolor makeovers. Attendees also received gift bags filled with sample size products and 50% off discounts for “Chicago” available on a first-come, first-serve basis.

Rite Aid regional VP, Paul Perinetti, attended and said it was the first time Rite Aid has hosted such an event.

“We will try to do something like this again,” Perinetti told Drug Store News, noting that coupons for the new Color Sensational Lipcolor being handed out at the event will help drive in-store traffic at local Rite Aid stores.

In addition, visitors could enter to win free tickets to “Chicago,” with Maybelline New York giving away a free pair of tickets every hour between 3 p.m. and 7 p.m.

With any purchase of Maybelline New York Color Sensational lipcolor, New York customers also can enter to win a “Chicago” prize package with a grand prize of two free show tickets, a post-show backstage tour and a “Chicago” gift basket including a CD/DVD package, stockings, t-shirts and souvenir books. Ten runners-up prizes include two free show tickets. Details are available inside Rite Aid stores.

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Revlon reports 12.2% drop in net sales for Q2

BY Antoinette Alexander

NEW YORK Revlon announced on Thursday a 12.2% decrease in second-quarter net sales due to lower sales of Revlon and Almay color cosmetics and Revlon Beauty Tools.

“In the second quarter of 2009, while the mass color cosmetics category in the United States, according to ACNielsen, continued to grow, the rate of growth slowed and certain retailers reduced inventory levels versus the year-ago period,” stated Alan Ennis, Revlon president and CEO. “These factors, along with the unfavorable effect of foreign currency fluctuations, impacted our second-quarter results.”

Net sales for the quarter totaled $321.8 million, compared with $366.5 million in the year-ago period, a decrease of 12.2%. Excluding unfavorable foreign currency fluctuations, net sales decreased 7.6%. The company noted that the drop in net sales was driven by lower net sales of Revlon and Almay color cosmetics and Revlon Beauty Tools, partially offset by higher net sales of Revlon ColorSilk hair color.

Net income for the quarter totaled $0.2 million, or nil per diluted share, which included $18.3 million, or 36 cents per diluted share, of restructuring charges. This compares with $19.9 million, or 39 cents per share, in the year-ago period.

In late May, the beauty company announced a worldwide organizational restructuring that involved consolidating certain functions; reducing layers of management to increase accountability and effectiveness; streamlining support functions; and further consolidating the company’s office facilities in New Jersey. The moves resulted in the elimination of roughly 400 positions worldwide, including about 325 current employees and 75 open positions.

The restructuring, which has been fully implemented, is reducing Revlon’s annualized costs by $30 million, of which $15 million is expected to benefit results in the second half of 2009, according to Ennis.

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