Avon achieves 4% sales gains in 2011, despite weak Q4
But more and more representatives are leaving the company
Avon Products Inc has reported total revenue of $11.3bn for 2011, an increase of 4% (1% in constant dollars). However poorer than expected fourth quarter sales across all regions suggest that the company is facing a tough start to 2012.
Total revenue for the quarter was $3bn, a decrease of -4% on the prior year period (-1% in constant dollars), while total unit sales declined -2%. In addition, the number of Avon’s active representatives slid -3% in the fourth quarter (as compared to just -1% for the year as a whole).
Commenting on the results, outgoing ceo Andrea Jung remained optimistic: “Despite a challenging fourth quarter, 2011 revenue was up 4% (1% in constant dollars) to $11.3bn. Adjusted operating profit for the year was $1.16bn and cash from operations was $656mn.”
But Jung stressed that recovery would not be likely in 2012, which would be a ‘transitional’ period for Avon and reiterated that an assessment of Avon’s operations and finances would take place once the new ceo had assumed their position.
“While 2012 is a year of transition and we are not planning for margin recovery, our priorities are to improve top line performance, cost management and cash generation,” she commented. “Additionally, the company plans to maintain its annual $0.92 dividend in 2012.
“As previously announced, the company is conducting an operational and financial assessment of the business. We will update investors at the appropriate time after a new ceo is on board.”