NEW YORK–(BUSINESS WIRE)–Revlon, Inc. (NYSE: REV) today announced its results for the quarter ended September 30, 2021.
Quarter ended September 30, 2021 summary developments:1
- As Reported net sales were $521.1 million in the third quarter of 2021, compared to $477.1 million during the prior-year period, an increase of $44.0 million, or 9.2%. The Company achieved revenue growth across all of its reporting segments.
- As Reported operating income was $34.1 million in the third quarter of 2021, compared to a loss of $9.7 million during the prior-year period, an improvement of $43.8 million. The higher operating income was driven primarily by $44.0 million in higher net sales, and a gross margin improvement of 670 basis points over the prior-year period, offset by $9.7 million in higher restructuring charges and $2.7 million in higher selling, general and administrative expenses (SG&A). Adjusted operating income in the third quarter of 2021 increased by $33.0 million to $47.3 million from $14.3 million of Adjusted operating income in the prior-year period.
- Adjusted EBITDA(a) in the third quarter of 2021 was $82.4 million, versus $54.5 million in the prior-year period. The higher Adjusted EBITDA was driven primarily by the higher Adjusted income.
- As Reported net loss was $53.1 million in the third quarter of 2021, versus a $44.5 million net loss in the prior-year period. The higher net loss was primarily due to a $31.2 million gain from the early extinguishment of debt in 2020, and $19.7 million of unfavorable variance in foreign currency year-over-year. Excluding these impacts, As Reported net loss would have improved by $42.3 million.
- As of September 30, 2021, the Company had total liquidity of $121.9 million.
Debra Perelman, Revlon’s President and Chief Executive Officer, stated: “Our results this quarter demonstrate that our strategy is working. The top-line growth in our brands and strong EBITDA performance are evidence of the sustained positive momentum we are seeing in our business as we continue to execute. For the second consecutive quarter, all our reporting segments increased revenue compared to the prior year, and our e-commerce segment posted double-digit growth. We are also well into the implementation phase of our Revlon Global Growth Accelerator program, which was put in place to support our long-term profitable growth.
“In terms of the macro environment, we continue to navigate global supply chain pressures, including increased prices on key ingredients and components, logistics challenges across all modes of transportation, and persistent labor shortages. As touched on last quarter, we are taking the appropriate steps to address these issues, including aggressively managing costs and implementing select price increases. While we expect these challenges to persist well into 2022, we are prepared to dynamically manage our business until the situation stabilizes.”
1 The results discussed include the following measures: U.S. GAAP (“As Reported”); and non-GAAP (“Adjusted”), which excludes certain Non-Operating Items and EBITDA Exclusions (as defined in Footnote (a)) from As Reported results. See footnote (a) for further discussion of the Company’s Adjusted measures. Reconciliations of As Reported results to Adjusted results are provided as an attachment to this release. In addition, where indicated, the Company analyzes and presents its results excluding the impact of foreign currency translation (“XFX”). Unless otherwise noted, the discussion is presented on an As Reported basis.
Third Quarter 2021 Results
Total Company Results
In calculating Adjusted results, adjustments were made for the Non-Operating Items and the EBITDA Exclusions in the case of Adjusted EBITDA, in each case as described in footnote (a).
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Three Months Ended September 30, |
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2021 |
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2020 |
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As |
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Adjusted |
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(USD millions, except per share data) |
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As |
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Adjusted |
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As |
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Adjusted |
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% Change |
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% Change |
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Net Sales |
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$ |
521.1 |
|
|
$ |
521.1 |
|
|
$ |
477.1 |
|
|
$ |
477.1 |
|
|
9.2 |
% |
|
9.2 |
% |
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Gross Profit |
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|
299.9 |
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|
300.0 |
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|
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242.8 |
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248.4 |
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23.5 |
% |
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20.8 |
% |
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Gross Margin |
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57.6 |
% |
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57.6 |
% |
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50.9 |
% |
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52.1 |
% |
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670bps |
|
550bps |
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Operating Income (loss) |
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$ |
34.1 |
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$ |
47.3 |
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$ |
(9.7 |
) |
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$ |
14.3 |
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451.5 |
% |
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230.8 |
% |
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Net Loss |
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(53.1 |
) |
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(40.2 |
) |
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(44.5 |
) |
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(30.8 |
) |
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(19.3 |
)% |
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(30.5 |
)% |
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Adjusted EBITDA |
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82.4 |
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54.5 |
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51.2 |
% |
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Diluted (Loss) Income per Common Share |
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$ |
(0.98 |
) |
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$ |
(0.74 |
) |
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$ |
(0.83 |
) |
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$ |
(0.58 |
) |
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(18.1 |
)% |
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(27.6 |
)% |
(*) Refer to footnote (a) to this Earnings Release for a discussion and reconciliation of the Company’s non-GAAP measures, including Adjusted Net Sales, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Operating Income (Loss), Adjusted Net Income (Loss), Adjusted EBITDA and Adjusted Diluted Loss per Common Share.
Segment Results
The Company operates in four reporting segments: Revlon; Elizabeth Arden; Portfolio; and Fragrances:
- Revlon – The Revlon segment is comprised of the Company’s flagship Revlon brands. Revlon segment products are primarily marketed, distributed and sold in the mass retail channel, large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, professional hair and nail salons, one-stop shopping beauty retailers and specialty cosmetic stores in the U.S. and internationally under brands such as Revlon in color cosmetics; Revlon ColorSilk and Revlon Professional in hair color; and Revlon in beauty tools.
- Elizabeth Arden – The Elizabeth Arden segment is comprised of the Company’s Elizabeth Arden branded products. The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics primarily to prestige retailers, department and specialty stores, perfumeries, boutiques, e-commerce sites, the mass retail channel, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and elizabetharden.com e-commerce website, in the U.S. and internationally, under brands such as Elizabeth Arden Ceramide, Prevage, Eight Hour, SUPERSTART, Visible Difference and Skin Illuminating in the Elizabeth Arden skin care brands; and Elizabeth Arden White Tea, Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue and Elizabeth Arden Green Tea in Elizabeth Arden fragrances.
- Portfolio – The Company’s Portfolio segment markets, distributes and sells a comprehensive line of premium, specialty and mass products primarily to the mass retail channel, hair and nail salons and professional salon distributors in the U.S. and internationally and large volume retailers, specialty and department stores under brands such as Almay and SinfulColors in color cosmetics; American Crew in men’s grooming products (which are also sold direct-to-consumer on its americancrew.com website); CND in nail polishes, gel nail color and nail enhancements; Cutex in nail care products; and Mitchum in anti-perspirant deodorants. The Portfolio segment also includes a multi-cultural hair care line consisting of Creme of Nature hair care products, which are sold in both professional salons and in large volume retailers and other retailers, primarily in the U.S.; and a hair color line under the Llongueras brand (licensed from a third party) that is sold in the mass retail channel, large volume retailers and other retailers, primarily in Spain.
- Fragrances – The Fragrances segment includes the development, marketing and distribution of certain owned and licensed fragrances, as well as the distribution of prestige fragrance brands owned by third parties. These products are typically sold to retailers in the U.S. and internationally, including prestige retailers, specialty stores, e-commerce sites, the mass retail channel, travel retailers and other international retailers. The owned and licensed fragrances include brands such as: (i) Juicy Couture (which are also sold direct-to-consumer on its juicycouturebeauty.com website), John Varvatos and AllSaints in prestige fragrances; (ii) Britney Spears, Elizabeth Taylor, Christina Aguilera, Jennifer Aniston and Mariah Carey in celebrity fragrances; and (iii) Curve, Giorgio Beverly Hills, Ed Hardy, Charlie, Lucky Brand, ‹PS› (logo of former Paul Sebastian brand), Alfred Sung, Halston, Geoffrey Beene, and White Diamonds in mass fragrances.
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Three Months Ended September 30, |
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Net Sales |
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As Reported |
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As Reported |
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(USD millions) |
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2021 |
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2020 |
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% Change |
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XFX |
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Revlon |
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$ |
173.0 |
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$ |
166.0 |
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4.2 |
% |
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3.0 |
% |
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Elizabeth Arden |
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122.8 |
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|
106.3 |
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15.5 |
% |
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12.3 |
% |
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Portfolio |
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112.7 |
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|
99.6 |
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13.2 |
% |
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11.8 |
% |
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Fragrances |
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112.6 |
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105.2 |
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7.0 |
% |
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6.0 |
% |
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Total |
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$ |
521.1 |
|
$ |
477.1 |
|
9.2 |
% |
|
7.6 |
% |
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Three Months Ended September 30, |
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Segment Profit |
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As Reported |
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As Reported |
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(USD millions) |
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2021 |
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2020 |
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% Change |
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XFX |
||||
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Revlon |
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$ |
16.1 |
|
$ |
13.5 |
|
19.3 |
% |
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14.8 |
% |
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Elizabeth Arden |
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21.3 |
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3.4 |
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N.M. |
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N.M. |
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Portfolio |
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22.1 |
|
|
12.2 |
|
81.1 |
% |
|
78.7 |
% |
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Fragrances |
|
|
22.9 |
|
|
25.4 |
|
(9.8 |
)% |
|
(11.0 |
)% |
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Total |
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$ |
82.4 |
|
$ |
54.5 |
|
51.2 |
% |
|
47.3 |
% |
Revlon Segment
Revlon segment net sales in the three months ended September 30, 2021 were $173.0 million, a $7.0 million, or 4.2%, increase, compared to $166.0 million in the three months ended September 30, 2020. Excluding the $2.1 million favorable FX impact, total Revlon segment net sales in the three months ended September 30, 2021 increased by $4.9 million, or 3.0%, compared to the three months ended September 30, 2020. The Revlon segment XFX increase in net sales of $4.9 million in the three months ended September 30, 2021 was driven by higher net sales of Revlon ColorSilk and Revlon color cosmetics, both in North America and in International regions, higher net sales of Revlon-branded professional hair care products in International regions, and, to a lower extent, higher net sales of Revlon-branded beauty tools both in North America and in the International regions. This increase was due, primarily, to retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic, as well as salons’ increased activity in connection with progressive and/or temporary lifting of restrictions related to the ongoing COVID-19 pandemic, partially offset by decreased net sales in North America of Revlon-branded hair-care products.
Revlon segment profit in the three months ended September 30, 2021 was $16.1 million, a $2.6 million, or 19.3%, increase, compared to $13.5 million in the three months ended September 30, 2020. Excluding the $0.6 million favorable FX impact, Revlon segment profit in the three months ended September 30, 2021 increased by $2.0 million, or 14.8%, compared to the three months ended September 30, 2020. This increase was driven primarily by the Revlon segment’s higher net sales, as described above, partially offset by moderately lower gross profit margin.
Elizabeth Arden Segment
Elizabeth Arden segment net sales in the three months ended September 30, 2021 were $122.8 million, a $16.5 million, or 15.5%, increase, compared to $106.3 million in the three months ended September 30, 2020. Excluding the $3.4 million favorable FX impact, Elizabeth Arden segment net sales in the three months ended September 30, 2021 increased by $13.1 million, or 12.3%, compared to the three months ended September 30, 2020. The Elizabeth Arden segment XFX increase in net sales of $13.1 million in the three months ended September 30, 2021 was driven primarily by higher net sales of Green Tea and White Tea fragrances, as well as certain other Elizabeth Arden-branded fragrances and skin care products, primarily in International regions. This increase was due, primarily, to growth in e-commerce net sales, as well as an increase in the travel retail business, while there are also signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets, primarily internationally.
Elizabeth Arden segment profit in the three months ended September 30, 2021 was $21.3 million, a $17.9 million increase, compared to $3.4 million in the three months ended September 30, 2020. Excluding the $0.9 million favorable FX impact, Elizabeth Arden segment profit in the three months ended September 30, 2021 increased by $17.0 million, compared to the three months ended September 30, 2020. This increase was driven primarily by the Elizabeth Arden segment’s higher net sales and higher gross profit margin, partially offset by higher brand support and other SG&A expenses to support the increase in sales activity.
Portfolio Segment
Portfolio segment net sales in the three months ended September 30, 2021 were $112.7 million, a $13.1 million, or 13.2%, increase, compared to $99.6 million in the three months ended September 30, 2020. Excluding the $1.3 million favorable FX impact, total Portfolio segment net sales in the three months ended September 30, 2021 increased by $11.8 million, or 11.8%, compared to the three months ended September 30, 2020. The Portfolio segment XFX increase in net sales of $11.8 million in the three months ended September 30, 2021 was driven primarily by higher net sales of American Crew men’s grooming products, Almay color cosmetics and CND nail products in North America, and higher net sales of Mitchum anti-perspirant deodorants in International regions, primarily in connection with the mass retail channel continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic. This increase was partially offset, primarily, by lower net sales of previously sold brands and of certain local and regional skin care products brands.
Portfolio segment profit in the three months ended September 30, 2021 was $22.1 million, a $9.9 million, or 81.1%, increase, compared to $12.2 million in the three months ended September 30, 2020. Excluding the $0.3 million favorable FX impact, Portfolio segment profit in the three months ended September 30, 2021 increased by $9.6 million, or 78.7%, compared to the three months ended September 30, 2020. This increase was driven primarily by the Portfolio segment’s higher net sales and higher gross profit margin, partially offset by higher brand support expenses to support the increase in sales activity.
Fragrances Segment
Fragrances segment net sales in the three months ended September 30, 2021 were $112.6 million, a $7.4 million, or 7.0%, increase, compared to $105.2 million in the three months ended September 30, 2020. Excluding the $1.1 million favorable FX impact, total Fragrances segment net sales in the three months ended September 30, 2021 increased by $6.3 million, or 6.0%, compared to the three months ended September 30, 2020. The Fragrances segment XFX increase in net sales of $6.3 million in the three months ended September 30, 2021 was driven primarily by higher net sales of Juicy Couture and John Varvatos fragrances, partially offset by lower net sales in North America of other branded and distributed fragrances, primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.
Fragrances segment profit in the three months ended September 30, 2021 was $22.9 million, a $2.5 million, or 9.8%, decrease, compared to $25.4 million in the three months ended September 30, 2020. Excluding the $0.3 million favorable FX impact, Fragrances segment profit in the three months ended September 30, 2021 decreased by $2.8 million, or 11.0%, compared to the three months ended September 30, 2020. This decrease was driven primarily by the Fragrances segment’s higher brand support and SG&A expenses, partially offset by higher net sales and moderately higher gross profit margin.
Geographic Net Sales
The following tables provide a comparative summary of the Company’s North America and International net sales for the periods presented:
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Three Months Ended September 30, |
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(USD millions) |
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2021 |
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2020 |
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As Reported |
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As Reported |
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Net Sales: |
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||||
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Revlon |
|
|
|
|
|
|
|
|
||||
|
North America |
|
$ |
88.4 |
|
$ |
86.4 |
|
2.3 |
% |
|
1.5 |
% |
|
International |
|
|
84.6 |
|
|
79.6 |
|
6.3 |
% |
|
4.5 |
% |
|
Elizabeth Arden |
|
|
|
|
|
|
|
|
||||
|
North America |
|
$ |
32.3 |
|
$ |
30.5 |
|
5.9 |
% |
|
5.2 |
% |
|
International |
|
|
90.5 |
|
|
75.8 |
|
19.4 |
% |
|
15.2 |
% |
|
Portfolio |
|
|
|
|
|
|
|
|
||||
|
North America |
|
$ |
75.2 |
|
$ |
59.9 |
|
25.5 |
% |
|
25.2 |
% |
|
International |
|
|
37.5 |
|
|
39.7 |
|
(5.5 |
)% |
|
(8.3 |
)% |
|
Fragrances |
|
|
|
|
|
|
|
|
||||
|
North America |
|
$ |
81.5 |
|
$ |
79.2 |
|
2.9 |
% |
|
2.5 |
% |
|
International |
|
|
31.1 |
|
|
26.0 |
|
19.6 |
% |
|
16.5 |
% |
|
Total Net Sales |
|
$ |
521.1 |
|
$ |
477.1 |
|
9.2 |
% |
|
7.6 |
% |
|
|
|
|
|
|
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|
|
|
||||
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Total Net Sales Summary |
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North America |
|
$ |
277.4 |
|
$ |
256.0 |
|
8.4 |
% |
|
7.8 |
% |
|
International |
|
|
243.7 |
|
|
221.1 |
|
10.2 |
% |
|
7.3 |
% |
Revlon Segment
In North America, Revlon segment net sales in the three months ended September 30, 2021 increased by $2.0 million, or 2.3%, to $88.4 million, compared to $86.4 million in the three months ended September 30, 2020. Excluding the $0.7 million favorable FX impact, Revlon segment net sales in North America in the three months ended September 30, 2021 increased by $1.3 million, or 1.5%, compared to the three months ended September 30, 2020. The Revlon segment’s $1.3 million XFX increase in North America net sales in the three months ended September 30, 2021 was due to higher net sales of Revlon ColorSilk hair color products and Revlon color cosmetics, and to a lower extent, Revlon-branded beauty tools due, primarily, to retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic, partially offset by lower net sales of Revlon-branded hair-care products.
Internationally, Revlon segment net sales in the three months ended September 30, 2021 increased by $5.0 million, or 6.3%, to $84.6 million, compared to $79.6 million in the three months ended September 30, 2020. Excluding the $1.4 million favorable FX impact, Revlon segment International net sales in the three months ended September 30, 2021 increased by $3.6 million, or 4.5%, compared to the three months ended September 30, 2020. The Revlon segment’s $3.6 million XFX increase in International net sales in the three months ended September 30, 2021 was driven primarily by higher net sales of Revlon-branded professional hair care products, and, to a lower extent, Revlon-branded beauty tools, across all of the Company’s International regions, due, primarily, to salons’ increased activity in connection with progressive and/or temporary lifting of restrictions related to the ongoing COVID-19 pandemic and to retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic.
Elizabeth Arden Segment
In North America, Elizabeth Arden segment net sales in the three months ended September 30, 2021 increased by $1.8 million, or 5.9%, to $32.3 million, compared to $30.5 million in the three months ended September 30, 2020. Excluding the $0.2 million favorable FX impact, Elizabeth Arden net sales in North America in the three months ended September 30, 2021 increased by $1.6 million, or 5.2%, compared to the three months ended September 30, 2020. The Elizabeth Arden segment’s $1.6 million XFX increase in North America net sales in the three months ended September 30, 2021 was driven primarily by higher net sales of certain Elizabeth Arden-branded fragrances and other skin care products due, primarily, to signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets. This increase was partially offset by lower net sales of certain other Elizabeth Arden-branded skin care products.
Internationally, Elizabeth Arden segment net sales in the three months ended September 30, 2021 increased by $14.7 million, or 19.4%, to $90.5 million, compared to $75.8 million in the three months ended September 30, 2020. Excluding the $3.2 million favorable FX impact, Elizabeth Arden segment International net sales in the three months ended September 30, 2021 increased by $11.5 million, or 15.2%, compared to the three months ended September 30, 2020. The Elizabeth Arden segment’s $11.5 million XFX increase in International net sales in the three months ended September 30, 2021 was driven primarily by higher net sales of Green Tea and White Tea fragrances, as well as certain other Elizabeth Arden-branded fragrances and skin care products. This increase was due, primarily, to growth in e-commerce net sales, as well as an increase in the travel retail business, while there are also signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets, and it was partially offset by lower net sales of Prevage.
Portfolio Segment
In North America, Portfolio segment net sales in the three months ended September 30, 2021 increased by $15.3 million, or 25.5%, to $75.2 million, compared to $59.9 million in the three months ended September 30, 2020. Excluding the $0.2 million favorable FX impact, Portfolio segment North America net sales in the three months ended September 30, 2021 increased by $15.1 million, or 25.2%, compared to the three months ended September 30, 2020. The Portfolio segment’s $15.1 million XFX increase in North America net sales in the three months ended September 30, 2021 was driven primarily by higher net sales of American Crew men’s grooming products, Almay color cosmetics, CND nail products, and also, to a lower extent, higher net sales of Cutex nail care products, partially offset by lower net sales of certain local and regional skin care products. This increase is primarily in connection with retail channels starting to show signs of improvement from the effects of the ongoing COVID-19 pandemic.
Internationally, Portfolio segment net sales in the three months ended September 30, 2021 decreased by $2.2 million, or 5.5%, to $37.5 million, compared to $39.7 million in the three months ended September 30, 2020. Excluding the $1.1 million favorable FX impact, Portfolio segment International net sales decreased by $3.3 million, or 8.3%, in the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The Portfolio segment’s $3.3 million XFX decrease in International net sales in the three months ended September 30, 2021 was driven primarily by lower net sales of previously sold brands and of certain local and regional skin care products brands. This decrease was partially offset by higher net sales of Mitchum anti-perspirant deodorants, primarily in connection with retail channels starting to show signs of improvement from the effects of the ongoing COVID-19 pandemic.
Fragrances Segment
In North America, Fragrances segment net sales in the three months ended September 30, 2021 increased by $2.3 million, or 2.9%, to $81.5 million, as compared to $79.2 million in the three months ended September 30, 2020. The segment’s $2.0 million XFX increase in North America net sales in the three months ended September 30, 2021 was driven primarily by increases in net sales of Juicy Couture fragrances, partially offset by lower net sales of other distributed fragrances, primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.
Internationally, Fragrances segment net sales in the three months ended September 30, 2021 increased by $5.1 million, or 19.6%, to $31.1 million, compared to $26.0 million in the three months ended September 30, 2020. Excluding the $0.8 million favorable FX impact, Fragrances segment International net sales increased by $4.3 million, or 16.5%, in the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The Fragrances segment’s $4.3 million XFX increase in International net sales during the three months ended September 30, 2021 was driven primarily by higher net sales of certain licensed fragrance brands primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.
Cash Flow
Net cash used in operating activities in the first nine months of 2021 was $86.7 million, compared to $256.9 million in the prior-year period. The decrease in cash used in operating activities was primarily driven by a lower As Reported net loss, and a decrease in the amount of cash used by working capital. Free cash flow(a) used in the first nine months of 2021 was $93.0 million, compared to $264.3 million used in the prior year.
Liquidity Update
As of September 30, 2021, the Company had approximately $121.9 million of available liquidity, consisting of $73.3 million of unrestricted cash and cash equivalents, as well as $53.2 million in available borrowing capacity under the Product Corporation’s Amended 2016 Revolving Credit Facility (which had $316.2 million drawn as of such date), less float of approximately $4.6 million.
