Cosmetic company Avon Products Inc reported that earnings in the first quarter 2006 were $.12 per share, compared with 2005 first-quarter earnings of $.36 per share.
The company said the 2006-quarter included a negative impact of $120 million pretax, or $.19 per share after taxes, in costs to implement the current phase of its previously announced restructuring program.
Avon said that total revenue was $2.0 billion in the first quarter of 2006, an increase of 6 percent in both dollars and local currency. Active Representatives grew 4 percent, primarily due to the company's acquisition of its business in Colombia in 2005, as well as continued growth in Central & Eastern Europe and Latin America.
Units increased 3 percent year over year. Total sales of Beauty products in the quarter rose 6 percent in both dollars and local currency.
Operating profit of $86 million decreased 67 percent, or $174 million, from the 2005 level. This reduction was due primarily to significant costs related to the company's turnaround plan, most significantly the $120 million in costs to implement restructuring initiatives.
These initiatives included an ongoing downsizing in all regions, and at the corporate level, to reduce organization layers to move management closer to its markets, Representatives and consumers; outsourcing of certain U.S. Representative customer-service transactions; realignment of certain manufacturing processes; and the exit of certain unprofitable operations.
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