On May 3, 2014, Zacks Investment Research downgraded global
Avon Products Inc.
), to a Zacks Rank #5 (Strong Sell) from a Zacks Rank #4 (Sell).
Why the Downgrade?
Shares of AVP slipped 1.1% after it released its first-quarter
2014 earnings on May 1, 2014.
The top line disappointed during the reported quarter as it
tanked 11.1% to $2,183.6 million. Revenues also fell short of the
Zacks Consensus Estimate of $2,240.0 million with a decline in
sales in all operating segments and geographical regions.
Avon, which competes with
Inter Parfums Inc.
), registered a 12% revenue decline in its Beauty Products and a
9% decline in Fashion & Home revenues. Region wise, Avon's
revenues fell 7% in Latin America, 22% in North America, 11% in
Europe, Middle East and Africa (EMEA) and 17% in the Asia-Pacific
Avon's quarterly adjusted earnings of 12 cents a share slumped
50% year over year, missing the Zacks Consensus estimate of 20
cents. Moreover, the company's adjusted operating margin
contracted 240 basis points to 6.1%, primarily attributable to
revenue decline related to fixed expenses and a negative foreign
The company's dismal results triggered a downtrend in the Zacks
Consensus Estimate, as analysts become less constructive on the
stock's future performance. The Zacks Consensus Estimate for
fiscal 2014 and 2015 fell 9.9% to $1.01 and 5.9% to $1.11,
respectively in the past 7 days.
Other Stocks That Warrant a Look
Other better-ranked retail stocks that look promising and are
expected to continue with their upbeat performance include
Rite Aid Corp.
Bon-Ton Stores Inc.
), both carrying a Zacks Rank #1 (Strong Buy).
AVON PRODS INC (AVP): Free Stock Analysis
BON-TON STORES (BONT): Get Free Report
INTER PARFUMS (IPAR): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis
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