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Second Quarter Looking Good at Avon

July 30, 2008

Total revenue up 17%, beauty sales jump 19%

Avon Products, Inc. reported that second-quarter 2008 total revenue grew 17% to $2.7 billion. Sales of beauty products rose 19%. Active representatives increased 7%, and units sold were up 5% versus the prior-year quarter. According to the company, all six operating regions contributed to the growth in each of these measures.

Operating profit doubled to $374 million from $187 million, while  net income leaped 60% to $236 million.

The company's 19% growth in beauty sales included increases in all categories: color was up 26%, fragrance grew 17%, skin care increased 15% and personal care rose 17%.

Beauty sales benefited in part from a year-over-year 10% increase in advertising expense to $103 million, according to the company. Advertising supported the launch of new products, such as Pro-to-Go Lipstick and Anew Ultimate Eye Contouring System as well as representative recruitment advertising in priority markets. Additionally, 2008's second quarter included an incremental $16 million of costs for initiatives to improve the Representative Value Proposition (RVP).

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