5. Avon Products
New York, NY
www.avon.com
Beauty Sales: $6.9 billion
Corporate Sales: $9.9 billion

Key Personnel: Andrea Jung, chairman and chief executive officer; Elizabeth A. Smith, president; Charles Cramb, vice chairman, chief finance and strategy officer; Lucien Alziari, senior vice president, human resources; Geralyn Breig, senior vice president and global brand president.
Products/Brands: Avon Color, Avon Skin Care, Anew Skin Care, Avon Bath & Body, Avon Hair Care, Avon Wellness, Avon Fragrance, Skin-So-Soft, Liiv Botanicals, Mark.

Avon’s limited edition Pro-to-Go Lipstick is sure to wow this holiday season.

New Products: Anew skin care products including Rejuvenate Dial-A-Glow Anti-Aging Moisturizer SPF 15; Fragrances including Bond Girl 007, Patrick Dempsey Unscripted, U by Ungaro for Him and Her, Christian Lacroix Noir and Rouge; Color cosmetics including Marimekko for Avon, In A Wink Instant Eyeshadow Sheets, Pro-To-Go Lipstick; Personal care including Skin-So-Soft Fusions Dual Softening Body Wash.

Comments: Avon’s new advertising and marketing tagline, “Hello Tomorrow,” with actress Reese Witherspoon as the company’s first-ever global ambassador, couldn’t reflect better the company’s turnaround approach. Two years of a restructuring/cost savings plan have elicited positive results, and optimism shines brightly on its future—especially among its more than 5.4 million direct sellers (up 9% in 2007) in more than 100 countries. Company revenue in 2007 increased 13% to $9.9 billion, nearly doubling since Andrea Jung was named CEO in 1999. Beauty accounted for 70% of corporate sales. Beauty revenue increased 15% in 2007, and according to Jung, has more than doubled over the past two years; also in 2007, she noted, the company grew nearly one and a half times the rate of the market overall, driving important market share gains.
  
With the rebranding and relaunch of its flagship Avon Color line, the company reportedly outperformed the market in the color cosmetics category, with 16% growth. The launches of Rouge and Noir by French designer Christian Lacroix helped fragrance sales rise 20% and not only confirmed the value of targeted collaborations, but set the stage for a shift both in price and brand image. Personal care sales rose 21% in 2007, while skin care increased 6% thanks to new anti-aging breakthroughs in the Anew line and higher price points ($80) for Anew Ultimate Night Cream and Elixir ranges.
  
In 2007, 13 of Avon’s developing markets grew revenue 20% or more. Brazil, Avon’s second largest market after the U.S., reported revenue of over $1.3 billion and over one million representatives. Revenue for Latin America, including Colombia and Venezuela, jumped 20% in 2007 to $3.3 billion. China experienced breakout growth in 2007; in just a year and a half, Avon has recruited hundreds of thousands of representatives there, and is the only direct-selling company to have been awarded a national license from the Chinese government. In Western Europe, the Middle East and Africa, total revenue increased 16% to $1.3 billion. Sales in Central and Eastern Europe rose 19% to $1.6 billion, with growth mainly attributed to Russia. Asia Pacific reported an increase of 5% to $850.8 million, with a 30% boost from the Philippines. Sales declined in both Japan and Taiwan. North America recorded just a 3% increase in total revenue to $2.6 billion for 2007.
  
For the second quarter of 2008, strong sales in emerging markets and restructuring and cost-cutting measures paid off as corporate revenue rose 17% year over year to $2.7 billion. Sales of beauty products jumped 19%, and included increases in all categories: color (26%), fragrance (17%), personal care (17%) and skin care (15%), according to Avon. Beauty sales benefited in part from a year-over-year 10% increase in advertising expense, to $103 million. Advertising supported the launch of new products, such as Pro-to-Go Lipstick and Anew Ultimate Eye Contouring System as well as representative recruitment advertising in priority markets.
  
Operating profit doubled, to $374 million from $187 million, and the company’s operating margin rose to 13.7% from 8% in the year-ago quarter. Net income in the second quarter 2008 was $236 million compared with $113 million in the year-ago quarter. CEO Jung commented, “The second quarter performance is the best that we have delivered since launching our turnaround in late 2005.”
  
Jung is obviously doing something right—and other corporations are looking to take a byte of her beauty expansion insight: in January, the woman who runs the company that calls itself the “company for women” joined Apple’s male-dominated board of directors—becoming the first woman to sit on the board in 10 years.