Shares of Revlon Inc. (REV) were looking pretty on Friday, as they shot up nearly 26% after the makeup company released third quarter results.
Investors were smitten with its adjusted third-quarter earnings of 14 cents a share, which exceeded Zacks consensus estimate a 40 cent per share loss. It also improved from the loss of 38 cents a share last year.
There were rough spots in the earnings report, as net sales were down at $655.4 million, compared to $666.5 million last year. But operating income came in at $2.3 million, compared to operating loss of $5.4 million at the same time last year.
Reasons for the better performance in the quarter included lower administrative expenses, lower acquisition and integration costs, and strong growth in North America for Revlon and Elizabeth Arden brands.
The company also stemmed its net income losses by nearly a third -- $11.1 million compared to $32.4 million last year -- thanks to its higher operating income and a big tax break.
Revlon's business strategy and work to stabilize operations is paying off, said CEO Debra Perelman, adding that "we are now 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."
Signalling layoffs to come, the CEO also said, "While this will lead to some headcount reductions, it is essential that we maximize the productivity of our resources across our businesses so that we can fully realize the benefits of our growth strategy in the future."