Avon misses estimates as sales reps drop out
today Nov 1, 2018
Avon Products’ third-quarter profit and sales missed estimates as the U.S. cosmetics maker struggled to retain its salespeople in all markets, particularly Brazil and Russia.
The company’s active representatives – salespersons who go door-to-door selling cosmetics - declined 5 percent in the quarter ended September 30.
Total revenue was flat at $1.42 billion, including a one-time $168 million tax reversal in Brazil.
Excluding the benefit, revenue fell 11 percent to $1.25 billion missing the analysts’ average estimate of $1.32 billion, according to Refinitiv data .
Adjusted sales in South Latin America, one of its biggest markets, fell 19 percent, due to the drop in representatives and a decrease in orders in Brazil.
“While we are not yet satisfied with the overall quarterly results, I am encouraged by the speed at which initiatives are being adopted in our markets,” Chief Executive Officer Jan Zijderveld said.
Excluding one-time items Avon reported a break-even profit, missing analysts’ average estimate of 1 cent, according to Refinitiv.
Benefiting from the Brazil tax reversal, Avon’s net income rose to $114.5 million or 21 cents per share in the three months ended Sept. 30, from $12.5 million or 1 cent per share a year earlier.
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