Avon Second-Quarter Earnings Rise

Avon Products Inc., the world’s No. 1 direct seller of beauty products, on Thursday reported higher second-quarter profits, driven by accelerating sales growth in its U.S. business and double-digit local-currency sales and profit growth from international operations.

The company reported earnings of $137.7 million, or 57 cents per diluted share, for the quarter ended June 30, compared with $124.9 million, or 52 cents per share, a year earlier. Avon said it is on target to meet analysts’ earnings forecasts for the full-year 2001.

Second-quarter sales rose 5% to $1.45 billion from $1.38 billion a year earlier. Excluding the effects of foreign currency exchange, sales increased 10%, driven by a 10% increase in units and an 11% increase in active sales representatives.

Worldwide beauty sales increased 6%, marking the eighth consecutive quarter in which beauty sales have outpaced Avon’s overall sales. Avon has also posted seven consecutive quarters of double-digit growth in the number of active representatives, with gains in all geographic regions, a trend indicating that market penetration is expanding, Chief Executive Andrea Jung said in a company statement.

Looking ahead, the company expects local-currency sales growth in the third and fourth quarters to be 1-2 points higher than in the second.

“Even with currencies at their present weakened levels in Brazil and Mexico, we remain confident that we can achieve the consensus earnings estimate of $2.09 per share for the year- without the net benefit from the Sears settlement we announced last week-due to the gathering strength in our global portfolio,” Ms. Jung said.