Avon Products Inc. is working to turn itself around, but numbers still look shaky.
The beauty business posted nearly $1.2 billion in sales for the first quarter, a 14 percent decline from the prior year period. The business posted a net loss of $33.5 million for the quarter. Diluted loss per share was 9 cents, down 3 cents from the prior-year period.
Avon chief executive Jan Zidjerveld called out the progress the company has made with its plan to "open up Avon."
"In the first quarter, our journey to open up Avon progressed, offering more value, more access and improved productivity for our millions of representatives and customers. Our relentless focus on revenue growth management, including less discounting and more targeted and effective incentives and promotion management led to a 6 percent improvement in average orders and drove overall price/mix up 8% across our portfolio. Asia Pacific showed strong growth, as evidenced by expanded customer access and strong e-commerce sales. Our ongoing focus on training contributed to continued improvement in representative productivity. We are further reducing our costs, driving efficiencies and simplifying our business," Zijderveld said in a statement.
While most figures were down, including active representatives — down 9 percent because of declines in Russia and Brazil — operating margin was 50 basis points higher than in the prior-year period.
Net sales were down across all regions except Asia Pacific, which posted a 3 percent gain. Europe, the Middle East and Africa posted a 19 percent drop, to $458.7 million; South Latin America declined 17 percent to $414.7 million; and North Latin America decreased 1 percent to $192.7 million. Those numbers were affected by currency fluctuations — in constant currency, only EMEA declined.
Avon is selling its 19.9 percent position in New Avon — the North America business it spun out to Cerberus Capital Management in 2016 — to LG Household & Health Care Ltd. as part of LG's plan to pay $125 million for all of Avon North America. Avon will receive $24.9 million for its stake in the business.
For more from WWD.com, see:
Jan Zijderveld Aims to Build A New Avon
Operating on Avon: CEO Outlines Turnaround Vision
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