Avon’s Sales Tumble 9% in Q2

The troubles continue for Avon Products, Inc., as second quarter revenue fell 9% to $2.6 billion. Total units declined by 4% and price/mix increased 3% during the quarter. Active representatives were down 3%.


“Avon’s second-quarter financial results are not good and they reflect the complex challenges that Avon faces. We are working to stabilize the top-line, improve cost structure and cash generation, and instill a more disciplined culture of accountability,” said Sheri McCoy, Avon’s chief executive officer. “We will also put the consumer and representative back at the center of our business and ensure our associates are engaged and aligned. It will take time, but I am confident that we can turn the business around and reach a point of sustainable growth.”


Avon Beauty sales declined 9%, or were flat in constant dollars. On a reported basis, fragrance was down 8%, color was down 9%, and skin care and personal care both declined 10%. On a constant-dollar basis, fragrance increased 1%, color was flat, and skin care and personal care were both down 1%.


Second-quarter 2012 gross margin was 62.8%, 160 basis points lower than the prior-year quarter, due to higher product costs impacted by inflationary pressures, as well as negative impact from foreign exchange.