10.31.05
Avon Products Inc. said its third-quarter profit dropped 7%, due to weak U.S. sales and a decline in profit margins. The company, however, beat Wall Street expectations sending shares up more than 6%.
In the United States, third-quarter revenues slipped 6%, hurt by competition and customers purchasing less frequently. The company believes that its U.S. business was affected by higher fuel costs on Avon's representatives and their customers. The number of products and active representatives in the quarter slipped 2% and 4% respectively.
In Europe, revenue increased 8% and active representatives rose 6%. The number of products was 2% lower than the year-ago period. Revenue grew 16% in Central and Eastern Europe, and 19% Russia.
In Latin America, third-quarter revenue increased 14% as solid results in Brazil and Venezuela, in particular, more than offset a 4% decline in Mexico. The number of active representatives rose 8% and units grew 4%.
In Asia Pacific, revenue declined 3% and the number of units declined 8%, as the region's performance was affected by revenue dips in China and Japan. Active representatives in the Asia Pacific region dropped 3% in the quarter.