Direct selling beauty giant Avon is remaining positive amid another set of concerning results.
The company's revenue plummeted 18% in Q1 2015, falling to $1.8bn, although it increased 1% in constant dollars, driven by "strong growth" in the EMEA region, according to the company.
Revenues were down across all of Avon's regions including Latin America, EMEA, North America and Asia Pacific. However, in EMEA, revenue was up 9% in constant dollars, primarily driven by an increase in active representatives, led by strength in Russia.
Meanwhile, gross margin stood at 60.6%, up 440 basis points, although adjusted gross margin was 61.4% down ten basis points. Avon said this was "primarily due to the unfavourable impact of foreign exchange, partially offset by lower supply chain costs".
However, there was some reprieve for the company. Net loss improved compared with Q1 2014, when it stood at $167m. In Q1 2015, it had pulled back a little to $146m, which represented a loss of $0.33 per diluted share.
CEO Sheri McCoy said: "Overall, the first quarter was in line with our expectations despite currency pressures that were greater than anticipated. Continuing on the momentum we saw in the second half of 2014, I'm encouraged to see improvement in our active representative trends and constant-dollar revenue growth in the majority of our top markets. Despite continued foreign exchange pressure, I'm really impressed with how well our teams in market are managing in this volatile environment. This is a pay-off for the work we've done over the past two years on strengthening our talent and improving core processes."
Looking ahead to its full-year results, Avon hopes to see constant-dollar revenue to be up "modestly" in 2015 compared with 2014. However, it does foresee that revenue in reported dollars will be negatively impacted by foreign currency translation, which is expected to have an approximate 17 point negative impact.
