DOW JONES NEWSWIRES
Avon Products Inc.'s (AVP) first-quarter earnings more than
tripled, beating analysts' estimates, as the company improved its
margins and lowered advertising costs.
Avon is among the many U.S. companies that have been relying on
growth abroad to offset recent softness in North America, though
competition from Procter & Gamble Co. (PG) and other
household-product companies is heating up. Avon has identified
China as a priority growth market and also has been making
acquisitions that complement its direct beauty business.
The company reported a profit of $143.6 million, or 33 cents a
share, up from $42.5 million, or 10 cents, a year earlier. Earnings
from continuing operations rose to 35 cents a share from 10 cents.
Revenue jumped 7.5% to $2.63 billion. Excluding currency
fluctuations, revenue was up 4%.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 31 cents a share on revenue of $2.58 billion.
Gross margin grew to 63.9% from 61.8%. Advertising costs fell
15% to $82 million, primarily due to reductions in China, where the
company is moving toward direct selling and away from a hybrid
model. The region's active representatives fell 14%.
Avon's beauty sales rose 8%, reflecting increases of 10% in
fragrance, 6% in color, 7% in skincare, and 8% in personal
care.
Shares closed Monday at $29.57 and were inactive premarket. The
stock has fallen 7.3% over the past year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com