First of a kind – too much competition for the 50-plus dollar

Revlon has just warned that its sales growth in 2006 will be lower than expected. This removed 2.5% of the company’s stock market valuation.

Why?

"Our initiatives are delivering significant incremental revenue growth in 2006, although they are requiring significant levels of investment to build consumer awareness and trial particularly of Vital Radiance - due in part to the heightened competitive environment,” said Revlon president and CEO Jack Stahl.

Translated into English this says we are not selling as much as we thought; our costs are higher than expected and we are feeling the competitive heat.

This quote from the press, adds a bit more detail:

Revlon was pinning particularly big hopes on its Vital Radiance cosmetics line as it targets women in the 50-plus category – currently a huge growth market. However, increased competition from all the big players in this category has meant that the line's anticipated success has not been fulfilled.

In recent months big names such as L'Oreal's Maybelline and Paris lines, together with brands from Lancome and Coty all chasing this market have all gone into overdrive marketing cosmetic products specifically at older women, creating an ultra-competitive market.

How interesting. Dick Stroud