Avon reports ‘disappointing’ sales in Q4 2010

Skin care sales slump 12%

Avon Products Inc experienced a somewhat subdued fourth quarter in 2010, reporting total revenue of $3.2bn, a 1% increase on the same period of 2009. Despite this however full year sales for 2010 reached $10.9bn, 6% higher than in 2009.

In the fourth quarter, fragrance proved the most dynamic of Avon’s beauty sectors, up 4% on the prior year period on a reported basis. Personal care grew by 2% but colour cosmetics dropped 2% and skin care slid 12%.

The company’s transition away from a hybrid to a purely direct sales model in China meant that fourth quarter revenue in China decreased 45%, while Avon’s business in central and Eastern Europe declined 6%. However, Avon enjoyed sales growth in western Europe, Middle East & Africa (9%) and Latin America (5%).

“As we closed the year we continued to experience disappointing sales results which were negatively impacted by service disruptions in Brazil and weak performance in Russia,” said Avon chairman and ceo Andrea Jung. “Looking ahead we are aggressively addressing execution challenges which dampened our second half 2010 performance. Our business fundamentals remain solid and we believe our strong field programmes and innovation pipeline that begin in the second quarter of 2011 should drive another year of mid-single digit constant dollar revenue growth.”

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