Avon Products Inc. (AVP) reported fourth-quarter results with earnings of 62 cents per share. Earnings were below the Zacks Consensus Estimate of 68 cents but up 14.8% from 54 cents reported in the prior-year period.

Total revenue increased 13.4% year over year to $3.1 billion, attributable to a 4% benefit from volume. The number of active representatives grew 11% during the quarter.

Sales of Beauty products increased 15%, due increases across all the three categories. Color Cosmetics increased 27%, Fragrance increased 11% and Personal Care increased 19%.

In North America, sales fell 7% as units sold declined 7% while active representatives were up 3%. In Latin America, sales grew 29% as units sold rose 3% and active representatives grew 10%.

Revenue in Western Europe, the Middle East & Africa increased 20%, due to a 19% growth in units sold and 17% growth in active representatives. Sales in Central and Eastern Europe fell 12% as units sold increased 11%, while active representatives grew 15%.

Quarterly sales growth in Asia Pacific increased 13%, as units sold were up 7% year over year and active representatives rose 4%. Sales in China decreased 8%, primarily due to a 1% decline in units sold. However, active representatives for the quarter increased 31%.

Gross margin for the quarter contracted 28 basis points (bps) to 62.7% versus 63.0% in the comparable prior-year quarter. Productivity gains, benefits from the company’s Strategic Sourcing Initiative, and price increases were fully offset by 140 basis points of unfavorable transaction-exchange impact. The operating margin also declined 41 bps to 12.8% from 13.3% in the comparable prior-year quarter.

For the full year 2009, net cash provided by operating activities was $782 million. At the end of the year, Avon’s total debt decreased by $42 million from the year-end level, to $2.4 billion.

Avon has six ongoing restructuring programs targeting a total of $1.08 billion in annualized cost savings. Its major programs include the 2005 Turnaround Plan (targeting $350 in cost savings), PLS – Product Line Simplification initiative ($200 million), SSI – Strategic Sourcing Initiative ($250 million) and 2007 Additional Restructuring Plan ($130 million).

Zacks Investment Research

1. (AVP) Avon Products Incorporated – Return on Equity of 87% Crushes Industry AverageAvon Products Inc. (AVP) continues to see a higher Zacks Consensus Estimates. For the current...
2. (AVP) Avon Products – Rising Forecasts and Strong MomentumAvon Products Inc. (AVP) is seeing bullish earnings estimates ahead of reporting next week. The...
3. (KO) The Coca Cola Company Reports Modest ResultsThe Coca Cola Company (KO) reported modest results for the third quarter with earnings of...
4. (AVP) Avon Products – ROE of 88% – Dwarfs Industry Average of 8%Avon Products Inc. (AVP) is seeing bullish earnings estimates ahead of reporting next week. The...
5. (WTSLA) Wet Seal Incorporated Reports Modest ResultsWet Seal Inc. (WTSLA) reported modest results for the second quarter with earnings of 3...
6. (AVP) – Avon Products – attractive ROE of 108%, which is much higher than the industry average of 13%Avon Products, Inc. (AVP) boasts an attractive ROE of 108%, which is much higher than...

Search Posts by Tag: Avon Products Inc. | AVP | Consumer Goods | Personal Products

RSS Feeds by Tag: Avon Products Inc. | AVP | Consumer Goods | Personal Products |

Other Posts by: vitalstocks | RSS Feed for this author