|
Revlon profit grows pale
|
 |
October 28, 1998: 10:43 a.m. ET
After warning of slump, cosmetics maker posts 61 percent drop in 3Q
|
NEW YORK (CNNfn) - Strapped by declining world demand and drugstore consolidation, Revlon Inc. Wednesday reported a 61-percent drop in third-quarter earnings, ahead of recently-lowered targets at the cosmetics maker.
The New York-based company, an industry leader, said net income for the quarter fell to $12.7 million, or 25 cents per diluted share, from $33.1 million, or 65 cents a share, a year earlier.
Operating earnings were 24 cents a share compared with 67 cents a year ago.
Those results include a one-time gain of $7.1 million related to the sale of its non-core business, and $1 million from business consolidation a year ago.
Despite the sharp drop, Revlon's top executive expressed optimism about the company's ability to weather wild gyrations in the market.
"Our business fundamentals are strong and our outlook for the future continues to be positive," George Fellows, president and chief executive officer, said.
The consensus analyst estimates, according to First Call, were for Revlon to post profit of 7 cents a share. Its shares (REV) were up 1/8 to 19-1/8 early Wednesday.
Net sales slipped 5.6 percent to $548.6 million, due in part to slow growth in the mass-market color cosmetics category, a seasonal flattening of market share and delays in some product launches.
Market trouble in Russia, South America and other emerging markets combined with a stronger dollar to cut into sales, Revlon said.
And consolidation among U.S. drugstore chains led to reduced orders and shrinking inventories that hurt Revlon's bottom line.
Earlier this month, Revlon announced a restructuring plan and lowered its forecast to 7 cents a share from 73 cents a share.
Under its restructuring plan, Revlon will close three plants worldwide, reorganize its workforce, and launch other cost cutting moves.
The company, which did not disclose details of potential layoffs, estimated "annual benefits" of up to $30 million. 
|
|
|
|
|
|
Revlon
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
