Why Revlon's Stock Fell 14% in August

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What happened

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Revlon (NYSE: REV) stock shed 14% last month, according to data provided by S&P Global Market Intelligence.

The decline added to big losses for shareholders, with the stock down over 40% so far this year compared to a 10% increase for the broader market.

So what

The August drop came following fiscal second-quarter earnings results that showed continued struggles for the beauty products giant. Organic revenue fell 5% and gross profit margin fell by over 3 percentage points to 62% of sales on weakness in the core U.S. selling market. Revlon generated an adjusted net loss of $24 million, compared to a gain of $13 million in the prior-year period.

In an early August press release, executives highlighted healthy demand in international markets as a key bright spot. "While our financial performance and sales results in the U.S. remained soft in a challenging retail environment," CEO Fabian Garcia said, "we are encouraged by the global growth of our iconic Revlon and Elizabeth Arden brands [and] our international sales which remain robust."

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Now what

Garcia and his team are aiming to improve their growth pace with help from new advertising campaigns for the Revlon and Elizabeth Arden franchises. Other key initiatives include a relaunch of the Almay brand, an aggressive product release calendar, and continued focus on faster-growing international geographies. Given the slumping share price, investors aren't showing much confidence that these moves will bring a quick end to Revlon's sales and profit slumps.

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.