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Avon Releases Financial Results for Fourth Quarter, Full Year 2012

Posted: February 12, 2013

Avon Products, Inc. reported fourth-quarter and full-year 2012 results. "2012 was a challenging year for Avon, but I'm encouraged to see that the overall business is showing early signs of stabilization," said Sheri McCoy, Avon’s CEO. "We have a lot of work ahead of us, but I am confident that in 2013, we will see progress against our three-year financial goals."

For the fourth quarter, total revenue of $3 billion decreased 1%, but increased 1% in constant dollars. Total units grew 2% and price/mix decreased 1% during the quarter. Active representatives were up 1%. Avon Beauty sales declined 2%, or increased 1% in constant dollars. On a reported basis, fragrance was flat, color and personal care both declined 1% and skin care declined 5%. On a constant-dollar basis, fragrance and color both increased 2%, personal care increased 1%, and skin care declined 2%.

For full year 2012, total revenue of $10.7 billion decreased 5%, or was flat in constant dollars. Total beauty sales declined 5%, or increased 1% on a constant-dollar basis. Active representatives declined 1% and units sold were flat.

For Latin America, fourth quarter 2012 saw revenue of $1.3 billion, while the full-year 2012 revenue came in at $4.9 billion. Fourth-quarter constant-dollar revenue increased, primarily due to an increase in active representatives, and units sold increased 6%, primarily attributable to Brazil. Brazil revenue was down 3%, or up 10% in constant dollars, primarily due to an increase in active representatives, and Mexico revenue was up 9%, or 4% in constant dollars, driven primarily by an increase in active representatives partially offset by a decline in average order. Venezuela revenue was up 2% in both reported and constant dollars, as average order benefited from the inflationary impact on pricing, but was partially offset by a decrease in active representatives.

For Europe, the Middle East and Africa, revenue for the fourth quarter was $905.8 million, while overall revenue for 2012 was $2.9 billion. Fourth-quarter constant-dollar revenue increased primarily due to an increase in active representatives and unit growth, and revenue in Russia was up 3% in both reported and constant dollars, primarily due to higher average order and an increase in active representatives. Revenue in the U.K. was flat, or down 2% in constant dollars, primarily due to a decrease in active representatives, partially offset by higher average order, while revenue in Turkey was up 1%, or down 1% in constant dollars, primarily due to lower average order, partially offset by growth in active representatives. Revenue in South Africa was flat, or up 8% in constant dollars, primarily due to growth in average order, partially offset by a decrease in active representatives.

For North America, fourth quarter revenue was $516 million, while full-year 2012 revenue came in at $1.9 billion. Fourth-quarter North America revenue declined 12%, primarily due to a decrease in active representatives. The North America Avon business revenue declined 11%, primarily due to a decrease in active representatives, partially offset by higher average order.

For Asia Pacific, fourth quarter revenue was $246 million, and full-year 2012 revenue was $902 million. Fourth-quarter constant-dollar revenue decreased primarily due to continued weakness in China. Revenue in China declined 23%, or 24% in constant dollars, primarily as a result of a decline in units sold. In this market, Avon will continue to focus on independently owned retail locations (beauty boutiques). Revenue in the Philippines grew 7%, or 2% in constant dollars, primarily due to growth in active representatives and higher average order, due to an increase in fashion and home sales.

Click here to find more information on Avon’s fourth quarter and full year 2012 financial results.