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Revlon Shares Off After Loss Widens Amid Virus Pandemic

Revlon shares are down after the cosmetics company reported a wider second-quarter loss on 39% lower revenue.
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Revlon  (REV) - Get Revlon, Inc. Class A Report shares on Thursday fell after the beauty company reported a wider second-quarter loss amid the coronavirus pandemic.

The New York company reported a net loss of $126.8 million, or $2.37 a share, in the latest quarter, widening from a loss of $63.7 million, or $1.56, in the year-earlier period.

Revenue dropped 39% to $347.6 million from $570.2 million.

That includes $214 million of estimated negative impact from covid-19, which shut stores and kept consumers home. Excluding the Covid-19 impact, net sales on a constant-currency basis were essentially flat from a year earlier.

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In any case, e-commerce sales soared 58% from a year earlier, as consumers shopped on their online devices. Online sales accounted for 18% of total revenue in the latest quarter, up from 7% in the year-ago period.

Revlon shares recently traded at $7.08, down 8.8%. The stock has given up 67% this year through Thursday, compared with a 3.1% gain for the S&P 500.

On Wednesday, credit-rating company Moody's Investors Service said that Revlon’s July 27 announcement to exchange at a discount to par its $500 million of 5.75% unsecured notes due February 2021 for new 5.75% unsecured note issue due February 2024 will be considered “a distressed exchange.”

Moody’s said, “the transaction would favorably address the company's significant refinancing needs …, but would not materially reduce the very high debt burden.”

The credit rater “views this proposed transaction as a continuation of the default that occurred in May, when Revlon refinanced its $1.8 billion term loan, and not a separate default event.”