Avon Posts Strong Sales in All Regions in Fourth Quarter

Avon Products Inc., New York, NY, bolstered by strength in its U.S. and European operations, posted a 75% increase in fourth quarter earnings, beating Wall Street expectations by a penny per share. The world’s largest direct seller of beauty products also said Tuesday that it had raised its earnings projections for the year by one penny.

The company earned $193 million for the three months ended Dec. 31, 2002, compared with $110.4 million in the year-ago period. The company recorded total revenues of $1.85 billion, up more than 5% from $1.75 billion in the year-ago quarter.

The U.S. performance, which had been strong all year, strengthened further in the fourth quarter, capping one of the best years for Avon’s largest business unit despite a weak U.S. economy. Sales increased 6% in the quarter and operating profit rose 14%, on top of strong results last year, when fourth quarter sales and profits grew 9% and 16%, respectively.

Europe also continued to post strong growth, with fourth quarter sales up 28% and operating profit up 37%. In the Pacific region, sales increased 9%, operating profit rose 21%, with all major markets posting profit increases. The number of products sold grew 28% in the region, reflecting continued rapid expansion of Avon’s retail presence in China. Latin America posted solid results excluding the impact of currency translation, with sales up 23% and operating profit up 17%.

For the year ended Dec. 31, the company had earnings of $534.6 million, compared with $444.6 million in the year-ago period. Sales reached $6.23 billion compared with $6 billion a year ago.