MAV Beauty Q4 impacted by haircare, drug channel sales
Canadian beauty group MAV Beauty Brands Inc. announced on Thursday it expects to report net revenue of $22.5 million to $24.5 million, and adjusted EBITDA of $3 million to $4 million for the fourth quarter.
During the three months ended December 31, 2020, the company, which owns the Marc Anthony True Professional, Renpure, Cake Beauty and The Mane Choice brands, said Covid-related factors negatively impacted fourth quarter results in certain categories.
Sales in the company’s drug channel were the most impacted, recording a low double-digit decline during the period. Meanwhile, the overall haircare category in U.S. food, drug, and mass retailers experienced a sales decline of single digits, representing the largest decline of any quarter in 2020.
Adjusted EBITDA in the fourth quarter was also affected by a reduced gross margin primarily driven by additional costs associated with annual retailer shelf resets and higher e-commerce holiday promotional activity.
Still, recent Q1 2021 haircare category sales are off to a better start and e-commerce sales remain robust, led by strong Amazon sales of several of the company's brands.
MAV Beauty Brands CEO, Tim Bunch, said the disruptions are expected to be “non-recurring” considering current trends recorded in the company’s first quarter.
“Covid-19 still presents risks in 2021 so we continue to monitor and adjust to the market, including taking active steps to minimize operational disruptions and increase inventory of core products to ensure supply sufficiency,” Bunch said.
The company also announced that its board has initiated a strategic review process to identify, review and evaluate potential strategic alternatives that may be available to the company.
The process includes “without limitation, the sale of all or substantially all of the company's securities and/or its assets.” The review will be overseen by a special ommittee who has engaged Jefferies LLC as its financial advisor.
MAV will report its complete audited financial results for the fourth quarter and full-year 2020 in late March.
Products from MAV’s brands are currently sold in more than 30 countries around the globe, in more than 100 of the world’s largest retailers.
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