Almay may be poised for a comeback.
The struggling brand, under Revlon Inc., has been bleeding shelf space — but now that it is being restaged with a larger shade assortment of Smart Shade foundations and new launches in the Clear Complexion and Truly Lasting Color franchises — retailers are giving it another go.
The new Almay “celebrates” individuality, inclusiveness and self-expression, Revlon chief executive officer Fabian Garcia said on the company’s earnings call Friday. The brand is debuting products in the second half of the year, and new displays are rolling out in the first quarter of 2018, he noted. “We have commitments to gain space for the brand when we do the restage,” said Revlon chief financial officer Chris Peterson. “We expect performance to turn to the positive,” Garcia said, of Almay.
Revlon, too, will have new displays rolling into retail in the first quarter of 2018, executives noted on the call. The brand is also expanding in Europe, where a new distributor relationship in Germany landed it in an additional 1,600 doors, Garcia said.
“In the U.S., we’re seeing improvements quarter to quarter in sales, and we’re holding share in what is a very competitive environment,” Garcia said.
Outside of retail, the business has a new focus on e-commerce, which Garcia characterized as “underdeveloped.” For Revlon, that means an increased focus on Amazon, which had an 80 percent consumption rate for the quarter, Garcia said. He described the channel as a “significant source of future net sales growth.”
On the product side, Revlon has partnered with third-party distributors to try to accelerate its speed to market, and is planning to rationalize stockkeeping units for some brands, Peterson said.
“There is a significant amount of opportunity to reduce the small and underperforming brands and sku’s,” Peterson said. “We expect this to be a cost savings improvement effort rather than an effort that’s going to materially affect the revenue of the company.”
Peterson also noted that Revlon is primarily focused on integrating Elizabeth Arden, he did say the company is considering smaller deals. “We continue to look at smaller, tuck-in acquisitions, but we don’t comment publicly on where we are on those going forward,” Peterson said.
Garcia and Peterson talked about the company’s transition after Revlon posted a $36.5 million loss for the second quarter. Net sales were up 32.1 percent year-over-year to $645.7 million because the prior-year period did not include sales from Elizabeth Arden. (The acquisition closed in September.) Revlon’s consumer segment posted a 6.6 decline in year-over-year sales for the quarter, with $335.7 million. Elizabeth Arden’s sales were slightly up, to $199.2 million. The company’s professional segment posted a 14.5 percent dip in sales, with $105.4 million.
Sales in Revlon’s consumer segment were impacted by “continuing softness in the consumption of core beauty categories in the mass retail channel in North America” the company said. Elizabeth Arden sales were boosted by the company’s fragrances, and the professional segment was dragged down by declines at CND and American Crew.
Revlon’s stock price closed down almost 7 percent Friday, at $16.60.