Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Revlon, Inc. Is Getting Crushed Today

By Bradley Seth McNew – Updated May 5, 2017 at 6:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The beauty company isn't looking so hot after its first-quarter miss. Can it turn things around?

What happened

Shares of the makeup company Revlon, Inc. (REV 4.01%) fell nearly 24% today, after the company released its first-quarter earnings showing a swing to a net loss.

So what

Revlon seems to have been struggling in recent quarters amid a decline in mall and department-store traffic. That seems to be much of the reason that Revlon swung to a net loss of $37.4 million this quarter, or $0.71 per share. Reported revenue did rise around 35%, year over year, due to the September 2016 acquisition of the Elizabeth Arden brand, but pro forma revenue still fell around 6%. After today's drop, the stock is now down around 45% over the last year.

The singer Ciara standing in front of a heart made of flowers and a Revlon sign

Singer Ciara was announced as a Revlon global ambassador in October 2016. Image source: Revlon, Inc.

Now what

Revlon CEO Fabian Garcia said in the release that while the company is disappointed with the results in the U.S., management is confident in its ability to turn things around. He continued:

We remain committed to our long-term strategy to restore brand growth in the U.S. by enhancing our brands' relevance with differentiated innovation, elevating in-store and online experiences and digital-first engagements, and building our presence in fast growing channels, as well as accelerating our international expansion, with a focus on Asia and Latin America.

While the U.S. mall and retail environment is unlikely to return to its former glory, the beauty market itself doesn't seem to be waning, and companies that have figured out a new distribution strategy still seem to be performing well. Garcia's comments above are part of a larger strategy update announced recently, including a focus on smarter distribution. We'll see in the quarters ahead if Revlon can use its respected brand portfolio to continue growing regardless of retail pressures.

Seth McNew has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Revlon Stock Quote
$1.04 (4.01%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.