News Flash

Avon Beauty sales grow by 19%

30 Jul '08

6 min read

This favorable comparison was due in large part to lower contributions to retirement-related plans and higher net income.

Looking forward, the company said that it continues to expect full-year 2008 cash flow from operating activities to be substantially higher than that of full-year 2007.

Second-Quarter Regional Highlights:
On continued strong performances in all markets, Latin America's second-quarter revenue rose 27% year over year (15% in local currency) to over $1 billion in the quarter for the first time.

Avon said that revenue increased over 30% in Brazil, nearly 50% in Venezuela, over 20% in Colombia and 12% in Mexico. The region's Active Representatives increased 4%, and units sold were up 3%.

Operating profit grew 65% versus the 2007 quarter, primarily due to higher revenue. Latin America's second-quarter operating margin was 18.6%.

The North America region reported a second-quarter revenue increase of 2% (1% in local currency) over the prior year. Both Active Representatives and units sold increased 5% from prior-year levels.

Sales of Beauty products were 7% higher, with increases in all categories. Sales of Non-Beauty products declined 4%. Operating profit was 81% above that of the 2007 quarter, primarily due to lower obsolescence and overhead expenses. The region's operating margin was 11.9%.

In Central & Eastern Europe, second-quarter revenue rose 30% (15% in local currency). Revenue grew in excess of 30% in Russia as well as in other key markets in the region.

The region's Active Representatives were up 20%, benefiting again from additional ordering opportunities through more frequent brochure distribution versus the year-ago period. Units sold increased 13%.

Operating profit grew 100% year over year, reflecting lower obsolescence expense and higher revenue somewhat offset by higher RVP and advertising expense. Second-quarter operating margin was 21.2%.

The Western Europe, Middle East & Africa region achieved revenue growth of 14% (8% in local currency). Strong revenue growth continued in both the Turkey and U.K. markets, with revenue up nearly 20% and 6%, respectively.

Year over year, the region's Active Representatives rose 4% and units sold increased 3%. Operating profit was 176% higher versus the 2007 quarter due to higher revenue and lower obsolescence and overhead expense. The region's second-quarter operating margin was 11.8%.

Asia-Pacific revenue increased 12% (1% in local currency), with the Philippines contributing revenue growth of over 20%. The region's Active Representatives rose 4% year over year, while units sold increased 2% compared with the prior year.

Operating profit was up 70% year over year, primarily as a result of lower obsolescence and overhead expenses. The region's operating margin was 12.1%.

Revenue in China grew 20% (8% in local currency), Active Representatives were up 36% and units sold were 16% higher in the second quarter.

The region reported an operating loss of $8 million versus a loss of $2 million in the 2007 period, primarily due to substantially higher advertising spending and somewhat lower gross margin resulting from unfavorable product mix. The region's second-quarter operating margin was (10.2)%.

Avon Products Inc

More Avon Products Inc News... More Fashion News - United States Of America...