Total revenues grew 30% from $1.49B in 2013 to $1.94B in 2014, demonstrating significant top-line momentum (p. 4, Exhibit 5).
The acquisition of Colomer Group dramatically increased Professional division revenues from $117M to $502M, diversifying the company's revenue base (p. 3, Exhibit 2).
Founded in 1932, Revlon has a long history and remains famous for iconic products like lipstick and its ColorStay line (p. 1, History).
56% of U.S. sales are derived from mass merchandisers, with key customers including Walmart, CVS, and Walgreens, ensuring wide product availability (p. 2, para. 3).
Revlon has a track record of using high-profile models and actors like Claudia Schiffer, Halle Berry, and Emma Stone to effectively promote its products (p. 1, History).
The core Consumer division, representing 74% of revenue, remains profitable, reporting profits of $347 million in 2013 (p. 3, para. 2, 4).
The company hired a new CEO, Lorenzo Delpani, in 2014, bringing in fresh leadership to develop a clear strategic plan for the future (p. 1, para. 4).
Revlon markets a wide range of products including cosmetics, hair color, skincare, and fragrances under multiple brands like Almay and Mitchum (p. 1, para. 1).
Revlon "sells products worldwide" and the Colomer acquisition added significant sales from Europe, the Middle East, and Africa (p. 1, para. 1; p. 3, para. 1).
The company has its own R&D locations and factories, giving it direct control over product development and production quality (p. 2, para. 4).
A history of incurring losses has resulted in a retained earnings deficit of -$1.411 billion in 2014, indicating long-term unprofitability (p. 5, Exhibit 6).
With $2.588 billion in total liabilities and negative total equity of -$644 million, the company is exceptionally leveraged and financially risky (p. 5, Exhibit 6).
Net income is volatile, dropping from $14.6M to $6.2M in Q3 2015, and the stock price declined 12% in 2015, concerning investors (p. 1, para. 3).
Despite adding nearly $400M in revenue, the newly acquired Professional division generated only $5.2 million in profit, indicating very low margins (p. 3, para. 5).
The absence of a COO in the top management team creates a potential leadership gap between the CEO and the two divisional presidents (p. 2, para. 2).
Revlon divested all of its Chinese operations in 2014, exiting a market worth an estimated $20 billion and ceding ground to rivals (p. 2, Strategy).
Revlon's revenue of $1.9B is dwarfed by competitors like L'Oreal ($26.88B) and Avon ($9.18B), giving it a significant disadvantage in resources and marketing spend (p. 5, Exhibit 7).
Having a few large customers like Walmart and CVS account for a majority of sales (56%) creates high buyer power and risk if a key account is lost (p. 2, para. 3).
The "Love is On" campaign was the firm's "first global marketing campaign in over 10 years," suggesting a historical underinvestment in building a unified global brand image (p. 2, para. 3).
Although profitable, the core Consumer division saw profits decline from $363 million to $347 million, a worrying trend in the company's main earnings driver (p. 3, para. 4).