Beauty & Balance

New Avon CEO Calls Q1 Results “Unsatisfactory”

Avon Products Inc. posted a $21 million net loss for its first fiscal quarter.”Avon’s first-quarter results were unsatisfactory and do not represent the underlying potential of the business,” said new chief executive officer Jan Zijderveld, who joined from Unilever last February. “During my first 90 days, I have been deeply engaged in a comprehensive review of the company’s operations, including on-the-ground visits to many of our top markets where I have met with many of our direct selling representatives.”While we are focused on the formulation of Avon’s longer-term plans, we are already implementing near-term fixes that support the success and satisfaction of our representatives–starting with actions to improve service delivery,” Zijderveld continued. “Our long-term mission is clear – to return Avon to a competitive market position – and we are moving with deliberate urgency to design our turnaround plan.”Avon’s active representatives declined 4 percent, and ending representatives declined 1 percent, in the quarter. The dip was caused primarily by a decline in reps in Latin America, particularly in Brazil.In the quarter, Avon’s revenue increased 5 percent to $1.4 billion. The net loss was 6 cents a diluted share — an improvement from the net loss of 10 cents a diluted share in the year-ago period.Europe, the Middle East and Africa posted a 12 percent increase in net sales, to $568.4 million; South Latin America was flat, with $497.1 million in net sales; North Latin America net sales were up 1 percent to $195.6 million, and Asia Pacific sales were down 2 percent, to $111.4 million.Avon’s numbers for the quarter were positively affected by a new revenue recognition standard that the company adopted in January.

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