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Avon Beats Its Expectations in Q2

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Following its deal with Cerberus, Avon has reported a revenue decline of 8% for the second quarter of 2016, totaling $1.4 billion. However, revenues increased 4% in constant dollars.

Average orders increased 4%, which benefited from pricing.

Active representatives rose 1% year-over-year for the period, with gains in Europe, Middle East & Africa, and North Latin America, and a decline in Asia Pacific.

"We continue to make steady progress on a number of fronts: improving pricing discipline; driving additional cost out of the business; and, continuing to build our brand and enhance the representative experience."

Gross margin for the period was 60.6%, down 40 basis points, while adjusted gross margin was 60.6%, down 70 basis points. Operating margin was 6.6% in the quarter, up 90 basis points while adjusted operating margin was 7.3%, up 100 basis points.

"Our second quarter results came in slightly above our expectations, driven by operating performance that was better than anticipated," said Sheri McCoy, CEO of Avon Products, Inc. "We also saw some modest easing in foreign currency pressure. Importantly, our performance improvements were broad-base with nine of our top 10 markets growing in local currency. We continue to make steady progress on a number of fronts: improving pricing discipline; driving additional cost out of the business; and, continuing to build our brand and enhance the representative experience."

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