In Asia Pacific, revenue was flat (down 2 percent in local currency) and units declined 7 percent as the region's performance was impacted by a 19 percent decline in China's revenue due to the direct-selling transition issues. Asia Pacific active Representatives in the quarter grew 4 percent.
Operating profit declined 23 percent, versus the year-ago quarter primarily as a result of the China revenue decline. Operating margin in the region was 14.3 percent.
In commenting on the company's second-quarter results, Andrea Jung, Avon's Chairman and Chief Executive Officer said, "While the U.S. and Latin America performed in line with their expectations, the situation in China was clearly unexpected.
They are moving rapidly to assure their Beauty Boutique owners that they will have an opportunity to earn as much or more with Avon in their future model, and believe this will be a transitional issue. They continue to feel privileged to have been chosen as the first company authorized to conduct a direct-selling test and their optimism about the long-term $1 billion opportunity in China remains unchanged.
In Central and Eastern Europe, where their topline momentum continues to be strong and they remain confident in their beauty leadership position, they have significantly enhanced their marketing offering and implemented aggressive plans to accelerate order growth in the back half of the year."
Revised Outlook On a consolidated basis for the third quarter, Avon expects revenue growth to accelerate to the high-single digits (mid-single digits in local currencies). Operating profit is forecast to be down slightly. EPS is expected to be in the range of $.34-$.36, compared with 2004's third quarter of $.37 per share.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
