How Do We Expect Revlon’s Skin Care Division To Grow?

+245.91%
Upside
3.90
Market
13.49
Trefis
REV: Revlon logo
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Revlon

Revlon’s skin care division contributes to around 12% of its revenues and around 11% of our stock price valuation for the company. Though Revlon is not a primary player in the skin care segment, its recent acquisition of Elizabeth Arden might help the company in gaining a larger prominence in the skincare segment. The U.S. prestige beauty market grew by 7% Y-o-Y to reach $16 billion in 2015. Arden sells premium makeup, skincare, and a range of licensed prestige fragrances. In fact, skin care might have a 7% share in the combined entity’s category mix as opposed to a mere 1% contribution in the category mix prior to the acquisition. Also, Arden’s geographic reach in important regions such as Asia Pacific will further boost Revlon’s global footprints.

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(Source: Revlon’s 8-K Filing)

Revlon’s Elizabeth Arden acquisition made the combined entity one of the top 20 beauty companies in the world. We expect Revlon’s skin care revenues to increase by a CAGR of ~6% over the next 7 years.

skincare trends

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Revlon