Revlon’s $64m sales estimate is not the ERP project bill

What the company reported

Enterprise resource planning (ERP) is the software a company uses to run operations such as orders, inventory and finance. Revlon Consumer Products Corporation’s FY2018 filing links its February ERP launch to disruption at its Oxford, North Carolina factory. It estimated about $64 million in lower net sales and reported $53.6 million in incremental charges for 2018, mainly associated with remedial actions. [1]

The same filing says Oxford was operating at pre-SAP levels at 31 December. Retailer inventories were still being replenished, particularly internationally. Factory recovery and recovery across the customer network were therefore different measures. [1]

These disclosures describe a historical event. They do not establish a supplier’s contractual liability, describe today’s operations or explain Revlon’s later bankruptcy.

Keep the accounting categories visible

The obvious shortcut is to add the two headline figures and call the result the project cost. That would give a precise-looking number without a consistent definition.

One figure estimates sales that the business did not make. The other describes charges. Neither is a statement of the approved implementation budget. A sales shortfall also cannot be treated as the same amount of lost profit: the costs associated with those sales would need to be considered.

There is a further reason to retain the source’s labels. Revlon’s March 2019 results release, marked unaudited, includes $11.5 million of Oxford-related charges in its net-sales reconciliation. Calling every charge a cash recovery expense would simplify away an accounting distinction. [2]

Our proposed review therefore separates the observed accounting entries, cash payments and commercial estimates. It asks Finance to reconcile their treatment before anyone presents a total. It does not assume every item is additive or that an accounting charge has already been paid.

Five lines for the next programme review

The accompanying worksheet has five review areas, with fields for evidence, ownership and next actions. Start with one reporting period.

1. 1

   Implementation spending

   Record the approved scope and budget, expenditure to date and forecast to completion. Keep the reporting period and currency visible. Explain any change in scope before describing a variance as an overrun.

2. 2

   Operational service

   Choose a measure the business actually uses. For order fulfilment, that might be the percentage of orders shipped by the promised date. Define the denominator and treatment of partial shipments. Use the same definition before and after launch.

3. 3

   Incremental recovery expenses

   Support this row with identifiable entries and an agreed accounting treatment. Track cash payments separately where relevant. Check the components and possible overlaps before copying a published charges figure into an expense field.

4. 4

   Estimated commercial effect

   State what would probably have happened without the disruption and why. Separate cancelled orders from delayed orders and changes in demand where the evidence permits. If the estimate cannot be defended, leave it unavailable.

5. 5

   Recovery criterion

   Define who can accept that operations have stabilised, which threshold must be met and for how long. A factory output measure and customer availability can recover at different times. Your criterion should reflect the service your programme is responsible for restoring.

Take the review into your next meeting

Use the editable workbook, or print the two-page sheet. Both are blank working tools for your own programme. No registration is required, and nothing you enter in the downloaded files is sent to us.

Download Excel · 37 KBDownload PDF · 38 KB

Make the review produce a decision

Before the next meeting, ask the programme lead and Finance owner to populate one reporting period. Give each row a named owner and a reference to the underlying report. The business owner should agree the recovery criterion before it is used to close the issue.

At the meeting, resolve missing definitions first. Then decide whether to continue the current recovery work, change it or close a specific issue. Record the action owner and next review date. An empty cell is an information gap; it is not a zero.

This is our proposed review method, not a reconstruction of Revlon’s internal steering committee. The practical test is whether someone outside the project can follow each number back to its evidence and understand which decision it supports.

Bring one question to the meeting: which business measure must recover before this programme can leave stabilisation?

Sources and method

1. Revlon Consumer Products Corporation, FY2018 Form 10-K, filed 28 March 2019. Item 1A, printed pages 24–25; Item 7, ERP implementation discussion. Primary source for the case figures and recovery status.
2. Revlon, Inc., fourth-quarter and full-year 2018 results, 18 March 2019, Exhibit 99.1. Unaudited release; see the adjusted net-sales and gross-profit reconciliations.

Sources checked 28 October 2026. The five-area review method and worksheet are ERP LEADERS’ analysis. Figures retain the source’s currency, period and category. We have not reconstructed a total programme cost or a component-by-component cash reconciliation.