Avon: 1Q 2012 Revenue Down

Posted on May 1, 2012 @ 09:17 am

Avon Products, Inc. today reported first-quarter 2012 results, noting that total revenue of $2.6 billion decreased 2% (up 1% in constant dollars) over the previous year. Total units declined by 1% and price/mix increased 2% during the quarter. Active Representatives were down 2%.

"While our first-quarter operating performance remained challenged, we are making progress toward addressing some of our operational and cost-cutting opportunities. With Sheri McCoy now on board, we are confident that her broad leadership experience and skills in managing large, complex, global organizations will help drive Avon's future success. We look forward to communicating further with investors about our future growth strategy at the appropriate time," said Kimberly Ross, Avon's executive vice president and chief financial officer.

On a category basis, beauty sales declined 1%, up 2% in constant dollars. On a reported basis, color was flat, fragrance and skincare declined 1%, and personal care was down 2%. Constant-dollar beauty was driven by growth in all categories; color was up 4%, fragrance increased 3%, skincare grew 2%, and personal care was up 1%. First-quarter 2012 gross margin was 60.8%, 310 basis points lower than the prior-year quarter, primarily due to cost pressures, including commodities and higher labor costs, as well as the negative impact from both foreign exchange and product mix, according to Avon.