Avon’s Sales Surge in Q4

Avon Products, Inc. today reported that fourth quarter sales jumped 13% to $3.2 billion. Active representatives grew 11% with growth in all regions. Beauty sales in the fourth quarter grew 15% driven by gains in fragrance, color cosmetics, and personal care of 11%, 27%, and 19%, respectively.

Units sold increased 4% in the quarter, and beauty units were up 5% versus a year ago.

“We are very pleased with Avon’s performance in the fourth quarter. Against the backdrop of the global economic crisis, our growth strategy to leverage our smart-value product offering and Representative earnings opportunity paid off to deliver robust Active Representative growth and beauty market share gains in the quarter,” said Andrea Jung, Avon’s chairman and chief executive officer. “We are especially pleased that revenue growth was broad-based across our geographic portfolio. Our Western Europe and Central and Eastern Europe regions, when combined, represent 30% of fourth-quarter revenue and together grew more than 15% (17% in local currency), while Latin America delivered another quarter of double-digit growth.”

Fourth quarter net income increased more than 15% to $269 million.

Full-year 2009 total revenue declined 3% to $10.4 billion. Total beauty sales were down 3%. Active representatives grew 9% with growth in all regions. Units sold increased by 3% and beauty units increased by 4% versus a year ago.

“As we reflect on 2009, we believe that the growing momentum and strong finish to a very challenging year underscore the benefits of our advantaged business model and our proven ability to execute our turnaround strategies. Given this momentum, we enter 2010 with renewed confidence and a continuing committed focus on delivering long-term sustainable, profitable growth,” said Jung. “In line with this, in 2010 we expect to realize further benefits and savings from our Product Line Simplification, Strategic Sourcing and restructuring initiatives, which give additional flexibility to further fuel reinvestment in top-line growth and continued product innovation.

“Overall, despite continuing economic uncertainties around the world and currency devaluation in Venezuela, our strong business fundamentals and momentum should continue,” Ms. Jung added. “This bodes well for another year of at least mid-single digit local-currency revenue growth and operating margin improving on the way to reaching mid-teens levels by 2013.”