Revlon announces 4Q profit
NEW YORK Revlon announced on Thursday that for 2008 it recorded net income of $57.9 million as it reduced debt by $110 million.
“During the year, net sales growth in Revlon brand color cosmetics, which was driven by strong new product introductions and a more focused allocation of advertising and promotional expenditures, along with continued rigorous cost control, resulted in significantly improved financial performance,” stated David Kennedy, president and CEO. “Specifically, and as we forecasted, the company improved operating margins, profitability and generated positive free cash flow and net income. In addition, during 2008, we reduced debt by $110 million, improving our capital structure.”
Net income for 2008 totaled $57.9 million, or $1.13 per share, compared with a net loss of $16.1 million, or 32 cents per share, in the year-ago period. Net income in 2008 includes discontinued operations of $44.8 million, or 87 cents per share, of which $45.2 million, or 88 cents per share, relates to the gain on sale of discontinued operations.
Sales for the year totaled $1.35 billion compared with $1.37 billion last year. Higher net sales of color cosmetics were offset by lower net sales of beauty care and unfavorable foreign currency fluctuations, the company stated. Excluding foreign currency fluctuations, net sales of Revlon brand color cosmetics rose 9% driven largely by new product introductions.
For the fourth quarter, net sales were $334.2 million, a decrease of 10.5% compared with $373.3 million in the year-ago period. Foreign currency fluctuations negatively impacted net sales by $23.3 million.
Net income during the fourth quarter totaled $11.3 million, or 22 cents per share, compared with net income of $40.8 million, or 80 cents per share. Income from continuing operations during the quarter was $11.2 million compared with $40 million last year.
“While we expect economic conditions and the retail sales environment to remain uncertain around the world, we believe we are better positioned than in many years to maximize our business results in light of these conditions,” noted Kennedy. “Specifically, we have strong global brands, a highly capable organization, a sustainable, reduced cost structure and an improved capital structure.”
Emma Roberts signs on as Neutrogena brand ambassador
LOS ANGELES Neutrogena, a subsidiary of Johnson & Johnson, has signed actress Emma Roberts as its newest brand ambassador.
As a new face and voice of Neutrogena, she joins a list of beauty icons that includes Diane Lane, Jennifer Garner, Vanessa Hudgens, Hayden Panettiere, Gabrielle Union, Susie Castillo, Malin Ackerman and Natascha McElhone.
Roberts became a household name upon starring in the Nickelodeon television series “Unfabulous,” which was one of the highest rated tween shows on television. Her film career has included roles in the domestic and international box office successes “Aquamarine,” “Nancy Drew,” “Wild Child,” and in theaters now, “Hotel for Dogs.”
Estee Lauder outlines 4-year strategy, will cut jobs
NEW YORK Battling challenging global economic conditions, The Estee Lauder Cos. has unveiled a four-year strategy to drive sales, reduce costs and realign its organizational structure, a move that will result in the reduction of about 2,000 employees over the next two years.
“The factors that impacted our second-quarter results were challenging on multiple levels, and not different from what many other companies have experienced, especially those companies dependent on consumer spending,” stated William Lauder, CEO. “The current difficult environment, which is global in scale, is not expected to improve in the near term. This underscores how vital it is for us to execute on our long-term strategy, even as we address the short-term challenges.”
During the quarter ended Dec. 31, each of the company’s product categories and geographic regions were adversely impacted by the economy. The worldwide economic downturn has negatively affected consumer demand, according to the beauty company, resulting in weak retail sales and prompting significant inventory destocking by certain key retailers.
Net sales for the quarter were $2.04 billion compared with $2.31 billion in the year-ago period. Net earnings totaled $158 million compared with $224.4 million last year. Diluted net earnings per common share were 80 cents compared with $1.14 reported in the prior-year quarter.
Looking to build on its core strengths, sharpen its focus on execution capabilities and lower costs, the company has outlined a four-year strategic plan and set performance goals for fiscal year 2010 through fiscal 2013. The plan includes, but is not limited to:
- Generating more than 60% of sales outside the United States, making the company more balanced and diversified. The Asia/Pacific region is expected to lead growth, followed by Europe, the Middle East and Africa.
- Address underperforming brands by changing their business models to improve profitability within 18 to 24 months.
- Cut costs by $450 million to $550 million, including improvements in cost of goods, organizational resizing and regional realignments, benefits from the Strategic Modernization Initiative, reduction and management of SKUs, logistic optimization, indirect procurement savings and selective outsourcing opportunities.
- Reduce headcount over the next two years by about 2,000 employees, or 6% of the work force, institute an immediate companywide freeze on merit raises and a continuation of the current hiring freeze. Reductions would occur through a combination of normal attrition, reorganizations and job eliminations.
- Reinvest about $50 million to fuel growth and gain global share.