Avon posts 4% drop in Q1 revenue

Avon’s first quarter results are said to show “signs of stabilisation” according to CEO Sheri McCoy, who was brought on board last year to lead a company turnaround.

During the quarter, total revenue came to $2.5bn – a 4% drop on last year. Operating profit came to $172m, negatively impacted by $20m associated with costs to implement (CTI) restructuring and $13m associated with the 32% devaluation of the Venezuelan currency. Finally, adjusted operating profit came to $206m.

Geographically, aside from Mexico, where revenue was up 6%, the company saw revenue declines in most of its key markets. Most significant was China, where revenue declined 30%, primarily due to declines in unit sales and the transition to a retail incentive model according to Avon.

"Our first quarter results reflect continued signs of stabilisation, including early progress in our cost reduction efforts," said Sheri McCoy, CEO. "I'm pleased with the performance of our Latin America and Europe, Middle East & Africa regions, particularly in Brazil and Russia. The teams there are focused on ensuring that this performance is sustainable. As for our other markets, there remains work to be done, particularly in the US."