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Avon’s Second Quarter Down 10%

July 30, 2009

Company reports total revenue of $2.5B

“Hello, Tomorrow” just might be the best tagline for Avon Products, Inc. when faced with the current economic conditions. The company reported second-quarter 2009 total revenue of $2.5 billion, 10% lower than 2008.

Beauty sales in the second quarter 2009 were also 10% lower versus the prior-year period. Active representatives grew 11%. Units overall rose 2% versus the prior-year quarter and beauty units increased 3%.

Chairman and Chief Executive Officer Andrea Jung remarked, "Our bold strategies to counter the recession are working. We've been successful at gaining Representatives and consumers during these tough economic times. This confirms our belief in the inherent advantage of our direct-selling business model. As women around the globe are seeking income and smart value products, Avon is there to meet their needs.

"From an earnings perspective, our results included substantial costs associated with our recently launched 2009 restructuring program. These actions reflect our continuing determination to transform our cost structure to help fund growth. Also, foreign exchange continued to significantly pressure profits, as expected. We are taking aggressive steps to help offset the foreign-exchange impact throughout our value chain, the benefits of which should be stronger in the second half of 2009.

Ms. Jung concluded, "Our focus on driving market share gains, coupled with a constant turnaround mentality, reflects our commitment to emerge as a stronger and more competitive company."

As reported earlier this month, second-quarter 2009 expenses included costs associated with Avon’s 2009 and 2005 restructuring programs totaling $89 million.
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