March 18, 2019 / 10:11 PM / a month ago

Revlon finds 'material weakness' in financial reporting; shares slide

(Reuters) - Cosmetics maker Revlon Inc said on Monday it had identified a “material weakness” in its financial reporting related to the implementation of its SAP enterprise resource planning system in the United States, sending its shares down over 10 percent in extended trading.

Revlon does not expect any changes to its previously reported preliminary financial results, including fourth-quarter results, it said in a filing.

Enterprise resource planning, or ERP, systems are back-end technology that companies use to automate or help implement everything from inventory management to customer services.

Revlon said it expects to disclose material weakness in its internal control over financial reporting as of year-end 2018, in a delayed annual regulatory filing.

In the fourth quarter, Revlon’s net sales dropped nearly 6 percent due to lower demand for its namesake cosmetics brand and the expiration of some of its fragrance brand licenses.

Expenses of $54 million related to fixing an ERP disruption at Revlon’s Oxford, North Carolina manufacturing facility added to the company’s woes in the quarter.

Reporting by Uday Sampath in Bengaluru; editing by Shailesh Kuber and James Dalgleish

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