Revlon posts first profit in six years

Cosmetics maker Revlon Inc. posted its first quarterly profit in six years yesterday aided by new products and favourable exchange rates.

Net profit for the maker of Almay, Ultima and Charlie cosmetics was $46 million, or 12 cents per share, compared with a loss of $12.6 million, or 18 cents a share, a year earlier.

Analysts, on average, expected New York-based Revlon to earn 11 cents per share, according to Reuters Estimates.

Growth was driven mainly by North America, reflecting the arrival of new products at retail outlets, although it was offset by factors including higher discounts such as an increase in sales incentives.

"We are optimistic about our outlook for 2005 and beyond," Revlon chief executive Jack Stahl said in a statement, but did not provide any guidance on future results.

Revlon had been suffering from declining interest in its colour cosmetics such as lipstick and eyeshadow, with retailers returning more of its products and its market share shrinking amid fewer new launches.

By contrast, rival manufacturers Avon Products Inc. and Estee Lauder Cos Inc. have posted steady gains in profits and sales.

Revlon said net sales in the fourth quarter rose three per cent, to $378 million, including a contribution of about two percentage points from favourable foreign exchange rates.

In terms of its US performance, Revlon said quarterly market share for the Revlon and Almay brands combined totalled 20.8 per cent, compared with 21.2 per cent in 2003.

Mr Stahl said the company would increase marketing investment behind key brands and new products, particularly in the early part of the year.

Revlon shares were up 30 cents to $2.85 on the Inet trading system, from a close of $2.55 on Monday on the New York Stock Exchange.