Avon Products Inc. is ending a 50-year run on the S&P 500 in yet another symptom of the company’s poor performance over the past few years.
Index manager S&P Dow Jones Indices announced late Friday that it will transfer the beauty products manufacturer to its MidCap 400 index after the close on Friday, March 20.
Used by investors as a benchmark to gauge overall stock market performance, the S&P 500 focuses on the large-cap segment of the market. Companies are selected based upon criteria such as market capitalization, liquidity and industry grouping.
S&P Dow Jones Indices attributed the move to Avon’s shrinking market value, which has fallen to $3.2 billion, well below the $4 billion minimum generally imposed upon potential S&P 500 candidates. Also dropping to the S&P MidCap 400 are oil and gas firms Denbury Resources Inc. (DNR) and Nabors Industries Ltd. (NBR). The three companies moving up to the S&P 500—including apparel manufacturer Hanesbrands Inc. (HBI), which will replace Avon—each have a market cap exceeding $12 billion.
New York-based Avon has been among the worst performers on the S&P 500 in recent years, as the company’s revenue sank from $11.3 billion in 2011 to $8.9 billion in 2014. Shares in Avon fell 5.7 percent on Monday to $7.28.
Avon has been a fixture on the S&P 500 since May 1964. The Pampered Chef parent Berkshire Hathaway joined in January 2010, but Avon is the only company on the index to operate exclusively through direct sales.