Another Decline at Avon

Second quarter revenue for Avon Products, Inc. declined 8% to $1.4 billion, but increased 4% in constant dollars and increased 5% in constant dollars when excluding the impact of the sale of Liz Earle.


“Our second quarter results came in slightly above our expectations, driven by operating performance that was better than anticipated. We also saw some modest easing in foreign currency pressure. Importantly, our performance improvements were broad-base with nine of our top 10 markets growing in local currency,” said CEO Sheri McCoy. “We continue to make steady progress on a number of fronts: improving pricing discipline; driving additional cost out of the business; and, continuing to build our brand and enhance the representative experience.”


Active representatives were up 1% year-over-year, as increases in Europe, Middle East and Africa and North Latin America were partially offset by declines in Asia Pacific. Average order increased 4% due to growth in all reportable segments as the company continues to benefit from pricing. Representatives improved 2% due to growth in Europe, Middle East & Africa and South Latin America, partially offset by declines in Asia Pacific.


By region, Europe, Middle East and Africa revenue fell 2% (up 7% in constant dollars). Constant-dollar revenue was driven by an increase in active representatives as well as higher average order. Russia revenue was down 7%, or up 15% in constant dollars, primarily driven by an increase in active representatives and higher average order.


South Latin America revenue fell 12%, but rose 5% in constant dollars, primarily due to higher average order. Brazil revenue was down 10%, or up 2% in constant dollars, primarily due to higher average order, which was partially offset by a slight decline in active representatives. North Latin America revenue was down 5%, or up 6% in constant dollars. Constant-dollar revenue benefited from an increase in active representatives and higher average order.


Asia Pacific revenue was down 10%, or 5% in constant dollars as growth in the Philippines was not enough to offset declines in other markets. The region’s constant-dollar revenue decline was driven by a decrease in active representatives, partially offset by higher average order.