Avon sales rise in all product sectors

Published: 4-May-2010

Direct sales giant’s Q1 revenue grows 14%


Avon Products Inc has reported first quarter 2010 sales of $2.5bn, up 14% on the prior year period. The company experienced revenue increases in all product sectors, in particular colour cosmetics, which grew 23%.

Although first quarter revenue dipped 2% in North America, business fared better elsewhere with Avon sales in central and eastern Europe up 28% and sales in western Europe, the Middle East and Africa up 23%.

Revenue growth in Latin America was adversely affected by a 30% decline in sales in Venezuela, a result of the country’s recent change in exchange rate (Avon’s constant-dollar revenue in Venezuela actually grew 41%). But sales in Brazil increased by 44%, meaning that revenue was up 22% for Latin America as a whole.

Meanwhile, Avon’s Asia Pacific sales rose 10%, with 19% growth in the Philippines offsetting weakness in Japan. However, first quarter revenue in China slid 31% compared to the same period of the previous year, a reflection of fundamental challenges in the company’s hybrid business model, according to Avon. The company was also forced to pay significant professional fees associated with the internal investigation resulting from an allegation of Foreign Corrupt Practices Act violations in China.

Overall, Avon’s net income in the quarter was $43m, compared with $117m in the year ago quarter.

“We are on track to deliver an expanded operating margin for the full year,” commented chairman and ceo Andrea Jung.

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