Revlon’s Growth Initiatives Might Start Positively Impacting Its Performance In Q3 2017

Revlon (NYSE: REV) is slated to release its Q3 2017 results on November 3rd. The company is desperate to see a breakthrough in its performance following quarter after quarter of lukewarm performance. However, since the second half of 2017 is set to be one of the strongest for Revlon in terms of new product launches, we can expect the company to show some positive results in the third quarter. Currently, Revlon is doing better in its international markets than the North American markets. Revlon’s growth in the international markets is mainly driven by the double digit growth in Asia and Latin America, and a solid growth in Europe. Its Elizabeth Arden brand seems to be performing well with new launches and a strong digital presence. Due to its Elizabeth Arden acquisition, the company is on track to attain integration synergies to the tune of $190 million by 2020, with approximately $14 million in synergies realized in the second quarter and around $24 million till August this year. We have a $17 price estimate for Revlon’s stock, which is around 20% lower than the current market price.

Revlon’s Plans For Revival Might Start Showing Positive Signs

It is expected that customers will see the complete makeover of all its brands across segments by Q1 2018. Some of its new launches have already taken place since the second half of 2017. The company is striving to make its products more relevant for the millennial beauty users, the most coveted group of customers that are the primary drivers of the beauty market sales. Towards this end, Revlon is also trying innovative launches, such as its recent ‘pizza cutter’ eyeliner, the first of its kind to be introduced by a beauty company, which seems to have already become a big hit among beauty users. Along with that it is trying to modernize some of its brands that do not appeal to the newer generations. It is also expanding the geographic reach of its products. Finally, the company is trying to cater to buyers with diverse purchasing power abilities.

Revlon is also trying to up its digital presence and towards that end it has partnered with a leading digital consulting firm. It has recently hired an expert from the beauty industry and partnered with third-party manufacturers to aid in enhancing its product development plan. We believe that these efforts undertaken by the company might be successful in showing some glimmer of growth in the third quarter.