Cosmetic Companies Post Prettier Profits

by , Jul 29, 2010, 4:03 PM
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Faltering economy or not, women love their lipstick, with beauty biggies Avon, Revlon and Shiseido all reporting higher sales.

At Avon Products, which hiked its ad spending 19%, second-quarter revenue rose 8% to $2.7 billion, with beauty sales climbing 9% and increasing in all categories. Fragrance sales leapt 15%, color cosmetics advanced 9%, skin care grew 2% and personal care rose 1%. Total advertising spending came in at $97 million, driven primarily by increased spending in Latin America.

Net income more than doubled to $168 million, from $83 million in the year-ago period. (After adjusting for the impact of Venezuelan special items and restructuring costs, net income was $209 million, compared with $166 million, in the same period a year ago.)

While results in most regions were positive, Avon faced downturns in both China and in North America, where sales fell 6%, and the number of active reps dipped 4%, a decline the company chalks up to tough comparisons with last year's record recruiting campaign. Units sold in North America dropped 6% compared with a year ago.

At Revlon, Inc., second quarter sales gained 2% to $327.7 million, compared to $321.8 million, while net income jumped to $16.4 million, compared to $0.2 million in the same period last year. Sales gains were propelled by color cosmetics and Revlon ColorSilk, but partially offset by lower sales of Almay cosmetics and Mitchum anti-perspirant deodorant.

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