News: Avon

Avon says Philippines cushions softening Japan market

BEAUTY products-seller Avon Products Inc. said the "strong growth" of its Philippines second-quarter 2010 sales of 14 percent (9% in constant dollars) "offset continued softness in Japan."
The company known for its direct selling model through "Avon ladies" said its "over-all Asia Pacific's second-quarter revenue increased 8% year over year, or 1% in constant dollars."
"The region's active representatives and units sold were each up by 3%. Operating profit rose 123% versus the 2009 quarter. The region's operating margin was 11.3% versus 5.5% a year ago. The region's adjusted operating profit rose 9%. Adjusted operating margin was 11.2%, flat versus a year ago."
In a statement dated July 29 from New York, the company said its second-quarter 2010 total revenue hit $2.7 billion, which it said is 8-percent higher than the revenue it reported in the same period last year.
"Constant dollar sales rose 7% as foreign exchange contributed 1 percentage point to growth. Beauty sales in the second quarter of 2010 were up 9% versus the prior-year period, and increased 7% on a constant dollar basis. active representatives grew 5%. Total units and beauty units both rose 1%, and price/mix rose 6%."
The company said it saw its revenue in China plunging to 32% year over year.
"Units sold decreased 46% and active representatives were down 18%. China had an operating loss of $2 million compared with $7 million in profit in last year's second quarter."
Avon blamed its "continued transition away from a hybrid model to one which focuses on direct selling and deemphasizes retail" as having negatively impacted its region?s revenues.

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