Avon reports 81,5% net income drop as sales slideMay 1, 2012 - 16:52 AMT PanARMENIAN.Net - Avon Products Inc reported a 2 percent drop in quarterly sales after seeing the number of active sales representatives fall and the company dealt with higher costs, Reuters reported. Avon, the world's largest direct seller of cosmetics, also said net income fell 81.5 percent in the first quarter, hurt by more "reps" leaving, with the exodus in North America the most pronounced. The company, which last month rebuffed a $10 billion takeover bid from smaller rival Coty Inc, last year shelved a top-to-bottom business review until its new CEO started. Sheri McCoy, previously a senior executive with Johnson & Johnson, took the reins of the company on April 23, replacing Andrea Jung after a 12-year stint. Avon reported a net profit of $26.5 million, or 6 cents per share, on revenue of $2.58 billion in the quarter that ended March 31, compared with net income of $143.6 million, or 33 cents, on revenue of $2.63 billion a year earlier. Excluding certain items, Avon had a 10 cent profit, well below the 28 cents Wall Street was expecting, according to Thomson Reuters I/B/E/S. Avon has been bedeviled by heavy competition from drugstores in the United States, aggressive pricing by rivals in Eastern Europe and inadequate ordering systems that have frustrated representatives in Brazil. The company, which has begun laying off employees, said its gross margin fell 3.1 points to 60.8 percent of sales, hurt by labor costs and the costs to make its cosmetics. There were nonetheless signs of improvement. Sales in Brazil, its top market, rose 2 percent excluding the impact of currency exchange despite aggressive competition, helped by an increase in the number of reps. But in North America, sales continued their long slide, falling 4 percent, hurt by a 10 percent drop in reps. Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | Mirzoyan says meeting with Bayramov was “constructive” At the moment, Ararat Mirzoyan said, there is no basis for additional comments. OSCE vows support for Armenia “in all three directions of security” Achieving stable peace between Armenia and Azerbaijan remains a priority of the OSCE, said Ian Borg. 151 detained as civil disobedience campaigns continue in Yerevan Citizens have been blocking streets in the Armenian capital, demanding Nikol Pashinyan’s resignation. France welcomes Armenia-Azerbaijan meeting in Almaty France has welcomed the new round of negotiations between the foreign ministers of Armenia and Azerbaijan. |