With Natura Deal Pending, Avon Sales Dip
The company agreed to sell to Natura in May.
Avon Products Inc. posted continued declines for its most recent quarter.
The company posted a 17 percent dip in sales, to $1.18 billion, from $1.4 billion in the prior-year period. Net income was down 6 percent year-over-year, to $106.6 million, from $113.8 million.
The results come as Natura is in the process of taking over Avon, in a deal the companies agreed to in May. The transaction is expected to close in early 2020.
“Last year, we rolled out our Opening Up Avon strategy, to rebuild our business fundamentals and reset the business to restore our competitiveness and modernize our business model,” Avon chief executive officer Jan Zijderveld said on a call with
Wall Street analysts Thursday. “This year has been about starting to execute the plan, building a healthier, more profitable and sustainable business.”
Avon saw a 4 percent uptick in average representative sales, he said, and the company continues to focus on innovating in the beauty category. Recent launches include collaborations with The Face Shop for a cushion foundation and Chi for a shampoo, as well as Avon Anew Anti-Pollution skin care. At the same time as new products have been introduced, Avon has worked to simplify its stockkeeping-unit lineup, and has cut a significant amount of sku's. The business is also working to sharpen its fashion and home portfolio, Zijderveld said on the call.
In the quarter, Avon active reps dipped 10 percent from the prior-year period, but went up 1 percent from the second quarter, the company said. Its digital initiatives also appear to be working, Zijderveld noted, as the company posted an 80 percent increase in online orders in the quarter, and is on track to double the digital business by the end of 2019.