Avon Products Inc (NYSE:AVP) shares were less than pretty after missing sales estimates in its third-quarter and struggling to hold onto its salespersons.
The cosmetics company reported earnings of $0.21 per share on revenue of $1.35 billion compared with $0.01 per share on revenue of $1.38 billion in the previous year’s third quarter.
Shares of Avon jumped as high as 6% but slipped more than 3% to $1.90 in Thursday pre-market trading.
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The London-based company beat Wall Street estimates of $0.01 EPS on revenue of $1.32 billion. Avon benefited from a $168 million tax reversal in Brazil, but excluding the tax benefit, revenue in South America was down 19%.
“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,” said CEO Jan Zijderveld in the company’s press release.
Avon’s products are sold through direct selling by representatives working as independent contractors.
As the number of active representatives declined, a 5% drop in its third quarter, so has its sales.
Revenue from Europe, the Middle East and Africa declined 8% due to a drop in active representatives and lower average orders.
The company also outlined its cost-saving plan, expecting to free up about $400 million over the next three years.
Contact Lenore Fedow at lenore@proactiveinvestors.com
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