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Avon Posts Q3
Posted: November 3, 2008Avon Products, Inc. reported that third-quarter 2008 total revenue grew 13% year over year (6% in local currency) to $2.6 billion. Sales of beauty products rose 15%. Revenues benefited, according to the company, 7% from pricing and mix, and units sold decreased 1% versus the prior-year quarter.
"Avon's third-quarter performance reflects continued momentum of our turnaround plan," said Andrea Jung, chairman and CEO, Avon. "Our investments in advertising and the Representative Value Proposition (RVP) are yielding strong results. Again this quarter, growth in our beauty sales outpaced our overall revenue growth rate. Additionally, our performance is benefiting from the savings and benefits from our restructuring program and strategic initiatives, as those programs remain on track to our longer term expectations."
Beauty sales benefited in part from a year-over-year 11% increase in advertising expense, to $106 million. Advertising supported the launch of new products, such as the Anew Rejuvenate line of skin care, U by Ungaro fragrances and Pro-To-Go lipstick, as well as Representative recruitment advertising in priority markets. Additionally, 2008's third quarter included an incremental $21 million of costs for initiatives to improve the Representative Value Proposition.