Avon Reports Q2

Avon Products, Inc. reported that second-quarter 2008 total revenue grew 17% year over year (9% in local currency) to $2.7 billion. Sales of beauty products rose 19%. Active representatives increased 7%, and units sold were up 5% versus the previous-year quarter. All six operating regions contributed to the growth in each of these measures.

Operating profit doubled, to $374 million from $187 million, and the company's operating margin rose to 13.7% from 8.0% in the year-ago quarter. Net income in the second quarter 2008 was $236 million compared with $113 million in the year-ago quarter. Earnings per share were $.55 versus $.26 per share in the previous-year quarter, or 112% higher.

"The second quarter performance is the best that we have delivered since launching our turnaround in late 2005," said Andrea Jung, chairman and CEO, Avon. "Both top-line and bottom-line growth rates are among the strongest of the last two years. We achieved these results on the strength of our well-balanced geographic portfolio and the momentum of our turnaround plan. Like our peers, we are experiencing input cost pressures in the current business environment. The savings and benefits from our strategic initiatives, our ongoing ability to capture strategic price increases, and the leverage from our revenue growth are helping to offset these cost pressures."

The company's 19% growth in beauty sales included increases in all categories: color was up 26%, fragrance grew 17%, skin care increased 15% and personal care rose 17%.

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