Avon Swings to Profit
November 03 2016 - 8:30AM
Dow Jones News
Avon Products Inc. swung to a profit in the latest quarter but
posted weaker-than-expected results as the iconic beauty brand,
which does much of its business overseas, faced currency
headwinds.
Revenue for the company retreated 1.9%, but stripped of currency
impacts, sales would have climbed 4%.
Sales were down 4% in the Europe, Middle East and Africa
segment, down 2% in Russia, fell 14% in the U.K., and retreated 9%
in the Asia Pacific region.
South America provided a boost, with revenue from there up 4%,
including Brazil, which provided a 14% increase.
Avon sells cosmetics, perfumes and accessories through a network
of roughly six million representatives world-wide. In March, after
completing the sale of its North American operation to Cerberus
Capital Management LP for about $435 million, Avon said it would
eliminate about 7% of its workforce and move its corporate
headquarters to the United Kingdom, the latest step in a yearslong
turnaround of the struggling beauty company.
Chief Executive Sheri McCoy said the company's results reflect
sales growth in its top markets and better margins.
For the quarter ended September 30, the beauty-products maker
posted a profit of $35.6 million, up from a year-earlier loss of
$697 million. On a per-share basis, earnings rose to seven cents a
share from a loss of $1.58 a share. Adjusted earnings were two
cents a share, up from a loss of 11 cents a share a year
earlier.
Revenue fell 1.9% to $1.41 billion.
Avon narrowly missed expectations of analysts polled by Thomson
Reuters, which had forecast three cents in per-share earnings on
$1.42 billion in revenue.
Shares rose 8% in premarket trading to $6.92.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
November 03, 2016 08:15 ET (12:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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