Home / Knowledge / News / Fashion / Avon reports third-quarter total revenue up 13%
Avon reports third-quarter total revenue up 13%
31
Oct '08
Avon Products Inc reported that third-quarter 2008 total revenue grew 13% year over year (6% in local currency) to $2.6 billion. Sales of Beauty products rose 15%. Active Representatives increased 5%. Revenues benefitted 7% from pricing and mix, and units sold decreased 1% versus the prior-year quarter.

Operating profit rose 33%, to $297 million from $224 million, and the company's operating margin rose to 11.2% from 9.5% in the year-ago quarter. Net income in the third quarter 2008 was $223 million compared with $139 million in the year-ago quarter. Earnings per share were $.52 versus $.32 per share in the prior-year quarter, or 63% higher. Earnings per share in the 2008 quarter benefitted from one-time tax adjustments of $.09 per share.

Andrea Jung, chairman and CEO, commented, "Avon's third-quarter performance reflects continued momentum of our turnaround plan. Our investments in advertising and the Representative Value Proposition (RVP) are yielding strong results. Again this quarter, growth in our Beauty sales outpaced our overall revenue growth rate. Additionally, our performance is benefitting from the savings and benefits from our restructuring program and strategic initiatives, as those programs remain on track to our longer term expectations."

The company's 15% growth in Beauty sales included increases in all categories: Color was up 19%, Fragrance grew 18%, Skin Care increased 9% and Personal Care rose 13%.

Beauty sales benefitted in part from a year-over-year 11% increase in advertising expense, to $106 million. Advertising supported the launch of new products, such as the Anew Rejuvenate line of skin care, U by Ungaro fragrances and Pro-To-Go lipstick, as well as Representative recruitment advertising in priority markets. Additionally, 2008's third quarter included an incremental $21 million of costs for initiatives to improve the Representative Value Proposition.

Third-quarter 2008 operating profit included costs associated with the company's restructuring program of $14 million ($.02 per share after tax), versus costs of $33 million ($.05 per share after tax) related to the company's restructuring program ($27 million) and Product Line Simplification initiative (PLS) ($6 million) 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 expected 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.

Additionally, Avon reiterated that beginning in 2010, it expects to achieve in excess of $200 million annual benefits each from its PLS program and Strategic Sourcing Initiative for a total in excess of $400 million from these two programs and over $830 million annually from all initiatives when fully implemented.


Must ReadView All

New Investment for traditional Myanmar textiles, weavers

Textiles | On 21st Oct 2018

New Investment for traditional Myanmar textiles, weavers

Myanmar Artisans Co Ltd, Turquoise Mountain and the DaNa Facility,...

Pak knitwear exporters plan environmental compliance

Textiles | On 21st Oct 2018

Pak knitwear exporters plan environmental compliance

Pakistani manufacturers and exporters of knitwear garments have...

Courtesy: Hyosung

Textiles | On 21st Oct 2018

Hyosung converting spandex plants into smart factories

Hyosung TNC, the textile and trading unit arm of Hyosung, is...

Interviews View All

Binoy Ravjani, Hero's Fashion

Binoy Ravjani
Hero's Fashion

‘One of the recent trends in hand block printing is the indigo process,...

DK Sharma, Velocity Apparelz

DK Sharma
Velocity Apparelz

We constantly communicate with employees at all levels

Prabu Mohanram, Balavigna Weaving Mills Pvt Ltd

Prabu Mohanram
Balavigna Weaving Mills Pvt Ltd

The biggest challenge that the weaving industry faces is high price

C Dhandayuthapani,

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Mark Tokuhara,

Mark Tokuhara

Japan-based FitJoy, a shoe brand for women, has been in the footwear...

Abhishek Dhanuka,

Abhishek Dhanuka

Vyom International Pvt Ltd, established in 2002, is one of Surat's leading ...

Mohammad Hassan, Biax Fiberfilm

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Suresh Patel, Sidwin Fabric

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Kazuaki Yazawa, Purdue University

Kazuaki Yazawa
Purdue University

Scientist <b>Kazuaki Yazawa</b> has developed thermoelectric semiconductor ...

Amiben Shroff, Shrujan

Amiben Shroff
Shrujan

From its modest beginning in the late 1960s, Shrujan has grown into a...

Mike Hoffman, Gildan Activewear SRL

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Divvya and Nidhhi Gambhir, Walnut

Divvya and Nidhhi Gambhir
Walnut

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


October 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search