Revlon, Inc. (NYSE:REV) Q2 2019 Earnings Conference Call - Final Transcript

Aug 08, 2019 • 08:30 am ET

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Revlon, Inc. (NYSE:REV) Q2 2019 Earnings Conference Call - Final Transcript

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Operator
Operator

Hello, and welcome to the Revlon Earnings Call. My name is Lydia, and I will be your coordinator for today's event. Please note, this conference is being recorded and for the duration of the call your lines will be on listen-only. However, there will be an opportunity to ask questions at the end. [Operator Instructions]. I will now hand you over to your host, Eric Warren, Vice President, Treasurer and Head of Investor Relations, to begin today's conference. Thank you.

Executive
Eric Warren

Thank you, Lydia, and good morning, everyone, and thank you for joining the call. Earlier today, the company released its financial results for the quarter ended June 30, 2019. If you've not already received a copy of the earnings release, a copy can be obtained on the company's website at revloninc.com. On the call this morning are Debbie Perelman, our President and Chief Executive Officer; and Victoria Dolan, our Chief Financial Officer.

The discussion today might include forward-looking statements that are based on current expectations and are provided pursuant to the Private Securities Litigation Reform Act of 1995. Information on factors that could affect actual results and cause them to differ materially from such forward-looking statements is set forth in the company's SEC filings, including its Q2 2019 Form 10-Q. The company undertakes no obligation to publicly update any forward-looking statements, except for the company's obligations under the US federal securities laws.

Remarks today will include a discussion of certain GAAP and non-GAAP results. Consistent with past reporting practices, non-GAAP results exclude certain non-operating items that are not directly attributable to the company's underlying operating performance. These adjusted measures are defined in the earnings release and are also reconciled in the financial tables at the end of the release. Please also note that certain amounts provided throughout this call have been rounded.

The call today should not be copied or recorded. And with that, we'll turn the call over to Debbie.

Executive
Debra G. Perelman

Thank you, Eric. Good morning, everyone, and thank you for joining us. Our second quarter 2019 results reflect both the continued momentum and growth in many of our key markets and brands as well as the ongoing challenges facing the US mass color cosmetics industry. Though our total company net sales declined 3.3% on a constant currency basis, profitability remained strong, with adjusted EBITDA growing 28% versus prior year quarter from $37 million in second quarter 2018 to $47 million. Removing the impact of foreign exchange, adjusted EBITDA grew 32% versus second quarter 2018. This was our fourth consecutive quarter of quarter-over-quarter adjusted EBITDA growth.

Our international business continues to show strong net sales growth with our two largest brands, Revlon and Elizabeth Arden, both posting double-digit growth during the second quarter. Revlon net sales grew 12% on a constant currency basis primarily driven by our Revlon color cosmetics business, which grew an impressive 19%. Growth was driven by new product innovation in the market, strong in-store activation as well as retail sales growth in key markets. Continuing to highlight