Revlon has named The Kaplan Thaler Group, a division of Publicis Group, to handle creative work on its $125 million cosmetics business. Aegis Group’s Carat has won media duties.
In other news, Revlon said Thursday that it had discovered a $1.2 million accounting error in its sales-return estimate and had identified a material weakness in its internal financial controls. The announcement caused shares to drop 5.1%. The company said in its annual report to the Securities and Exchange Commission that it had implemented additional controls to remedy the problem.
Last year, Revlon spent about $72 million on advertising.
The revelation comes just days after, Revlon, the maker of Revlon and Almay cosmetics, has posted its first quarterly profit in more than six years. However, the company’s CEO acknowledged that it still has a lot of work to do.
Net income for the quarter was $46.2 million, compared with a loss of $12.6 million one year ago. Sales rose 2.7% to $378.3 million, versus $369 million. The company said that the growth was primarily driven by North America, reflecting strong sell-in of new product for 2005 and favorable foreign currency translation. The quarter ended Dec. 31, 2004.
The color cosmetics category declined by 4.3% for the quarter and 2.5% for the full year, the company said, citing statistics from ACNielsen. Market share for the quarter for Revlon and Almay combined totaled 20.8%, compared to 21.2% in 2003.
“While we still have a lot of work to do, we are now a much stronger company, positioned to capitalize on the growth opportunities our strong brand portfolio and strengthened new product capability provide,” Stahl said.
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