Revlon Inc.'s sales growth bodes well for other cosmetics companies, an analyst said Thursday, after the cosmetics maker posted a preliminary second-quarter profit that topped expectations for a loss.
The shares rose 10 cents, or 14.5 percent, to close at 79 cents. So far this year, the stock has declined about 40 percent.
Revlon, which is restructuring its operations, said strong sales of new products boosted quarterly profit above the estimates of Wall Street analysts, who expected a loss.
Revlon said shipments of color cosmetics rose, mostly because of new product launches.
BMO Capital Markets analyst Connie Maneaty, who rates the stock "Market Perform," said sales growth and implied stability in gross margin hint at good news for other cosmetics companies like Avon Products Inc. and Estee Lauder Cos., which are slated to post quarterly results in coming weeks.
Maneaty said Revlon's expectation for 8 percent higher sales topped her estimate for 3.5 percent growth.
Still, Maneaty warned that Revlon remains burdened by "excessive" debt.
The company, which is controlled by financier Ron Perelman, is scheduled to post quarterly results on July 31.
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