QUOTE AND NEWS
Forbes  Jul 8  Comment 
For fiscal 2014, Revlon India expects to generate approximately (rupees ) 2.5 billion (~$42 million) in revenues. Although this is just 2% of overall revenues for Revlon, the professional products segment in India is expected to be worth 12...
SeekingAlpha  Jun 30  Comment 
By Bradd Kern: Previously, in November of 2013, we wrote a positive article about Revlon (REV). In that article, based on a conservative analysis, we valued REV at $35/share. Since November, in the notable absence of any sell-side coverage on...
The Hindu Business Line  Jun 16  Comment 
Taking an India-specific initiative, Modi Revlon is driving down prices by nearly 20 per cent by segmenting the mass market with a sub-brand – Street Wear Color Rich by Revlon. The new sub-...
TheStreet.com  May 13  Comment 
NEW YORK (TheStreet) -- Losses to Elizabeth Arden  stock following its third-quarter earnings report are dragging on fellow beauty companies Coty  and Revlon  over Tuesday's session. By late afternoon, Coty had fallen 2.3% to $15.47, while...
SeekingAlpha  Apr 30  Comment 
Revlon, Inc. (REV) Q1 2014 Earnings Conference Call April 30, 2014 9:30 am ET Executives Jessica Graziano - SVP, CAO & Corporate Controller Lorenzo Delpani - President & CEO Larry Alletto - EVP, CFO & CAO Analysts Ryan...
DailyFinance  Apr 3  Comment 
Filed under: Stock Picks, Retail, Industry News, Consumer Goods, Investing Radu Bercan/Shutterstock Who wouldn't love a company that has gorgeous margins and is always in demand? Beauty companies like Revlon (REV), Estee Lauder (EL) and Ulta...
Forbes  Mar 6  Comment 
Margins for TCG seem to be a little lower than Revlon’s organic business line. The company reported that TCG added close to $71 million in gross profits in fiscal 2013. Considering that the TCG business was incorporated in the fourth quarter,...
SeekingAlpha  Mar 5  Comment 
Revlon, Inc. (REV) Q4 2013 Earnings Conference Call March 5, 2014 9:30 am ET Executives Lorenzo Delpani - President and Chief Executive Officer, Revlon, Inc. Lawrence Alletto - Executive Vice President, Chief Financial Officer and...
StreetInsider.com  Mar 5  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Revlon%2C+Inc.+%28REV%29+Posts+Mixed+Q4+Results/9248018.html for the full story.
Forbes  Mar 4  Comment 
On an absolute basis, we do not expect meaningful reduction in interest payment for Revlon due to its early extinguishment of existing debt. On the flipside, Revlon upsized its term loan facility by $700 million which should increase interest...




 

Revlon (NYSE:REV) makes color cosmetics, fragrances, and anti-perspirants. The company sells its products to consumers through drug stores and mass market retailers such as Wal-Mart Stores (WMT). Sales to Wal-Mart accounts for 23% of the company's total sales.[1] The company earned $1.3 billion in sales and $950K in net income in 2009.[2]

Revlon's color cosmetics market share has been dropping since 1998, and the company has had only a single profitable quarter in the last 8 years. The company's profitability began to suffer in the late 90s when overall industry growth in color cosmetics sales to mass retailers began to decline and increasing competition and drugstore consolidation resulted in reduced shelf space for Revlon's products.[3] Since then, Revlon has struggled to keep up with major competitors as its slowing sales and large debt burden have constricted its ability to spend on either R&D or an effective turnaround strategy.[4]

Company Overview

Brands[5]

  • Revlon: The Revlon brand is used in the cosmetics, beauty tools, and hair categories.
  • Almay: The Almay brand is used in the cosmetics and anti-perspirant categories.
  • Revlon ColorSilk: hair
  • Charlie: fragrance
  • Jean Nate: fragrance
  • Mitchum: anti-perspirants
  • Gatineau: skincare
  • Ultima II: skincare

Business Growth

FY 2009 (ended December 31, 2009)[2]

  • Net sales fell 3.7% to $1.29 billion. Sales in the US fell 4.4% while sales internationall fell by 2.9%. The company attributes the loss to the weak global economy.
  • Net income fell 15% to $950K.

Trends and Forces

L'Oreal Dwarfs Revlon's R&D Spending

Revlon competes with several larger competitors that are able to invest much larger amounts in research and development. Over the last decade, Revelon's history of losses have left it with insufficient cash flow to invest sufficiently in R&D. In 2009, the company spent $23.9 million, or 1.8% of net sales on R&D.[6]

Revlon is Dependent Upon Wal-Mart for a Large Portion of Sales

Revlon's principal customers include large mass volume retailers and chain drug stores, including retailers like Wal-Mart Stores (WMT), Target (TGT), Sears Holdings (SHLD), Walgreen Company (WAG), Rite Aid (RAD), CVS (CVS), and Longs Drug Stores (LDG) in the U.S., Shoppers DrugMart in Canada, A.S. Watson & Co. retail chains in Asia Pacific and Europe, and Boots in the United Kingdom. Wal-Mart accounts for approximately 34% of Revlon’s worldwide sales.[1] In addition, WalMart's mass purchases give it significant negotiating power with regards to shelf placement, shelf space, and purchase price.

Competition

Revlon's primary competitors are Procter & Gamble Company (PG), L'oreal (LRLCY), Avon Products (AVP), and Estee Lauder Companies (EL). Revlon is smaller than both L'oreal and PG in terms of revenues and resources. However, Revlon has a more focused product offering than these companies and when one considers only color cosmetics sales they are much more comparable. Revlon is the second largest color cosmetics company in the US. Competitors Estee Lauder and Avon get the majority of their revenue outside the US.

References

  1. 1.0 1.1 REV 2009 10-K "Customers" pg. 7-8
  2. 2.0 2.1 REV 2009 10-K "Selected Financial Data" pg. 28
  3. Funding Universe, Revlon
  4. Wrinkles Under the Surface at Revlon
  5. REV 2009 10-K "Products" pg. 4-6
  6. REV 2009 10-K "Research and Development" pg. F-12
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