The global beauty company,
Avon Products Inc
) commenced fiscal 2013 on a strong note by posting adjusted
earnings per share of 26 cents for the first quarter owing to
better-than-expected bottom-line results. Additionally, the
company's earnings substantially surpassed the Zacks Consensus
Estimate of 14 cents, while it surged over twofold from the
comparable year-ago quarters' earnings of 10 cents.
However, on a reported basis, the company reported a loss of 3
cents per share for the first quarter compared with the year-ago
earnings of 6 cents.
Total revenue for the quarter declined 4% year over year to
$2,483.7 million compared with $2,575.4 million a year ago.
However, on a constant currency basis, total revenue remained
flat year over year. Further, total revenue missed the Zacks
Consensus Estimate of $2,515.0 million. During the quarter, the
company registered an increase of 3% and 1% in price/mix and
active representatives, respectively, while total units declined
Avon, which competes with
Inter Parfums Inc.
Nu Skin Enterprises Inc.
), registered a revenue decline in its Beauty Products and
Fashion categories, where sales decreased 5% and 4%,
respectively. However, sales at the company's Home category
business improved 8%. The decline in Beauty revenues was
primarily due to short fall in its color, skincare and personal
Adjusted gross margin of this Zacks Rank #2 (Buy) company
expanded 160 basis points year over year to 62.5%, on account of
lower freight and material costs and improved productivity.
Adjusted operating margin improved 450 basis points to 8.3%,
attributable to higher gross margin, reduced advertisement
expenses and lower professional fees.
In the quarter, Avon's revenues in
remained flat while on a constant currency basis it increased 7%
year over year to $1,144.4 million. On a currency neutral basis,
revenues at Brazil, Mexico and Venezuela increased 11%, 3% and
3%, respectively. Units sold were down 2% during the quarter,
while Active Representatives grew 4% year over year.
, sales skidded 15% year over year to $406.2 million, mainly due
to a fall in Active Representatives. At Silpada, sales were down
18% as average orders and Active Representatives declined. Units
sold for the region waned 13% year over year, while Active
Representatives slipped 13%.
The beauty product manufacturer's revenues in
Europe, the Middle East and Africa
inched up 1% year over year to $733.1 million, primarily due to
improvements in units sold and Active Representatives. Regional
breakup shows that sales escalated 3% in Russia, while revenues
in UK, Turkey and South Africa declined 9%, 2% and 11%,
respectively. Avon registered a 4% increase in Active
Representatives, while units sold were up by 4% during the
division's revenues dipped 10% to $200.0 million. The region
marked a 4% decline in Active Representatives and an 11% fall in
units sold. Country wise, the region recorded a 30% and 1%
revenue decline in China and Philippines, respectively.
Other Financial Details
The leading global beauty company exited the quarter with cash
and cash equivalents of $1,488.4 million, long-term debt
(excluding current maturities) of $2,685.5 million, and
shareholders' equity of $1,177.9 million.
Moreover, earlier this morning, the company announced a
quarterly dividend of 6 cents, which is payable on Jun 3, 2013 to
shareholders of record as on May 14.
Headquartered in New York City, Avon directly sells cosmetics,
fragrances, toiletries, jewelry, and accessories. The company
markets around the world through 6.2 million independent sales
representatives and is the world's largest direct seller.
AVON PRODS INC (AVP): Free Stock Analysis
INTER PARFUMS (IPAR): Free Stock Analysis
LOREAL CO-ADR (LRLCY): Get Free Report
NU SKIN ENTERP (NUS): Free Stock Analysis
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