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Avon Posts Revenue of $2.9 Billion Q2 2011

Posted: July 28, 2011

Avon Products, Inc. reported second-quarter 2011 total revenue of $2.9 billion, 9% higher than that of second-quarter 2010. Constant-dollar sales rose 2% in the second quarter as foreign exchange contributed 7% to growth. Total units declined 3% while price/mix rose 5% during the quarter.

"Our first-half 2011 results were in line with our expectations of low-single digit constant-dollar growth and adjusted operating margins flat with a year ago," said Andrea Jung, chairman and CEO, Avon. "We continue to expect mid-single digit revenue growth in the second half of this year, driven by our major global field activation program around our 125th anniversary. We also continue to expect significant margin expansion in the second half, resulting from gross margin improvement and revenue leverage."

On a reported basis, fragrance and personal care grew 11%, color grew 8%, and skin care grew 3%. On a constant-dollar basis, fragrance and personal care grew 4%, color was flat, and skin care declined 4%.

Latin America's second-quarter 2011 revenue was up 19% year over year, or up 10% in constant dollars, with continued strong growth in most large markets. Brazil was up 17%, or 4% in constant dollars, and continues to make progress towards stabilizing the service environment. Mexico was up 27%, or 18% in constant dollars, primarily driven by growth in Active Representatives. Venezuela was up 15% on both a reported and constant-dollar basis.

Second-quarter revenue in North America was down 7% year over year, or down 8% in constant dollars. In Central and Eastern Europe, second-quarter revenue was up 5% year over year, or down 3% in constant dollars, reflecting a decline in average order and continued macroeconomic challenges in the region. Russia was up 5% on a reported basis and down 2% in constant dollars, as positive.