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Beauty giant Revlon stock jumps on higher 3Q revenue and plan to sharply cut costs

Cost reductions by the company will range from $125 million to $150 million by the end of 2019
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Revlon is an American multinational cosmetics, skin care, fragrance, and personal care company.

Shares of beauty products icon Revlon Inc (NYSE:REV) soared on Friday after it reported a beat on third quarter revenue and unveiled a plan to slash costs by up to $150 million in 2019.

The company said revenue came in at $655.4 million, surpassing the consensus expectation of $639.6 million. In the same period a year ago, revenue reached $666.5 million. EPS came in at $0.14, from a loss of $0.38 in the same period a year ago.

“We are very pleased with our third quarter 2018 results and believe that they are reflective of the strength of our business strategy and efforts to stabilize our business operations," said Debra Perelman, Revlon's President and CEO.

She said the company's optimization plan is "re-allocating and re-aligning our resources to build new capabilities in higher-priority growth areas, as well as driving operational efficiencies to reduce our cost base."

Cost reductions will be in the range of $125 million to $150 million by the end of 2019.

READ: Revlon boss Fabian Garcia to go after losses widen

This will lead to "some headcount reductions," said Perelman, but they are needed to maximize productivity to "fully realize the benefits of our growth strategy in the future,"

Shares of Revlon jumped more than 28% to a session high of $27.91 during Friday's session.

The company is reporting results in four segments. They are Revlon, Elizabeth Arden, Portfolio Brands and Fragrances.

Quarterly sales of Revlon reached $249.5 million, off by 2% from $254.5 million in the same period of 2017. Profit in the segment for the third quarter stood at $36.8 million, against the profit in the same period a year ago of $22.4 million.

Elizabeth Arden revenue in the third quarter reached $122.1 million, while Portfolio Brands revenue was at $138.4 million and Fragrances at $145.4 million, the company said.

Revlon is an American multinational cosmetic, skin care, fragrance, and personal care company founded in 1932. 

The company is based in New York City.

Reporting by Rene Pastor, contactable on [email protected]

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