Nov 1, 2018
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Avon misses estimates as sales reps drop out

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.

Avon's Q3 profits and sales came in under expectations - Instagram: @avoninsider

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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