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Avon Color sales up by up 15%
29 Apr '08
3 min read
The company's 17% growth in Beauty sales included increases in all categories: Fragrance grew 20%, Color was up 15%, Personal Care rose 15% and Skin Care increased 13%.
First-quarter operating profit of $296 million increased 25% from 2007's level of $238 million, while operating margin was 11.8% versus 10.9% in the prior-year quarter. First-quarter 2008 operating profit included costs associated with the company's restructuring program of $26 million ($.04 per share after tax), versus costs of $27 million ($.04 per share after tax) related to the company's Product Line Simplification (PLS) and restructuring programs in the prior-year period.
Avon reiterated that it expects to achieve annualized savings of approximately $430 million once all initiatives of its multi-year restructuring program, launched in late 2005, are fully implemented by 2011 - 2012. Those savings are projected to reach $270 million in 2008 and $300 million in 2009. The company anticipates costs to implement all restructuring initiatives from inception to completion to be approximately $530 million.
Approximately $469 million of those costs were recorded through the first quarter of 2008. Additionally, Avon reiterated that it expects to achieve annualized benefits in excess of $200 million each from its PLS program and Strategic Sourcing Initiative, bringing total annualized savings and benefits from all three programs to over $830 million when fully implemented.
First-quarter 2008's results included $82 million in advertising expense, a 14% increase over prior year, to support the launch of new products, such as Anew Ultimate Age Repair Day Cream and Contouring Eye System, Ultra Color Rich Lipstick and Supershock Mascara, as well as Representative recruitment advertising. Additionally, 2008's first quarter included an incremental $37 million of costs for initiatives to improve RVP.
The quarter's effective tax rate of 33.2% compared with 2007's rate of 32.4%.
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First-quarter operating profit of $296 million increased 25% from 2007's level of $238 million, while operating margin was 11.8% versus 10.9% in the prior-year quarter. First-quarter 2008 operating profit included costs associated with the company's restructuring program of $26 million ($.04 per share after tax), versus costs of $27 million ($.04 per share after tax) related to the company's Product Line Simplification (PLS) and restructuring programs in the prior-year period.
Avon reiterated that it expects to achieve annualized savings of approximately $430 million once all initiatives of its multi-year restructuring program, launched in late 2005, are fully implemented by 2011 - 2012. Those savings are projected to reach $270 million in 2008 and $300 million in 2009. The company anticipates costs to implement all restructuring initiatives from inception to completion to be approximately $530 million.
Approximately $469 million of those costs were recorded through the first quarter of 2008. Additionally, Avon reiterated that it expects to achieve annualized benefits in excess of $200 million each from its PLS program and Strategic Sourcing Initiative, bringing total annualized savings and benefits from all three programs to over $830 million when fully implemented.
First-quarter 2008's results included $82 million in advertising expense, a 14% increase over prior year, to support the launch of new products, such as Anew Ultimate Age Repair Day Cream and Contouring Eye System, Ultra Color Rich Lipstick and Supershock Mascara, as well as Representative recruitment advertising. Additionally, 2008's first quarter included an incremental $37 million of costs for initiatives to improve RVP.
The quarter's effective tax rate of 33.2% compared with 2007's rate of 32.4%.
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Avon Products Inc
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