$420m acquisition cost cuts Revlon’s profits despite increased revenue
Revlon has shared its financial results for the third quarter of 2016, reporting a drop in profits following its acquisition of Elizabeth Arden.
The purchase completed on 7 September, dropping Revlon’s profits to a net loss of $4.7m despite increased revenue.
We remain enthusiastic about the significant value creation opportunity presented by the combination of our companies and brands.”
Reported net sales reached $604.8m in the quarter, a 28.3% increase on the same period in 2015.
Fabian Garcia, CEO and President at Revlon, said that the company was making “good progress” on integrating the two companies. He also said that the company expects to deliver at least $140m in “synergies” and cost-reduction related to the transaction in the coming years.
Garcia said: “We remain enthusiastic about the significant value creation opportunity presented by the combination of our companies and brands.”
Following the merger, all four of Revlon’s business divisions reported sales growth.
Consumer sales remained relatively flat, as higher sales of Revlon beauty tools and colour cosmetics were offset by a drop in sales of the SinfulColors range.
Sales increased 4.5% in the professional sector, thanks to the strength of Revlon Professional hair products including the launch of Revlon Professional Be Fabulous.
At Elizabeth Arden, sales of Britney Spears and Juicy Couture fragrances as well as colour cosmetics helped deliver a 4.5% increase in sales. An improved product and channel mix also delivered a 46.7% increase in profits at Elizabeth Arden Pro.