Avon Products Inc. (AVP—NYSE) posted first quarter results on Thursday amid reports the company is considering a sale of its North American business. Earnings fell below Wall Street estimates as domestic revenue continued to decline and the strong dollar overshadowed growth in foreign markets.
Quarterly revenue dropped 18 percent to $1.8 billion, a 1 percent increase in constant dollars. North America revenue was also down 18 percent, hurt by the market’s 17 percent decrease in active representatives. Overall, the company’s representative count was down 1 percent from 2014, though up on a sequential basis.
Earlier this month, The Wall Street Journal reported that Avon is exploring options to hasten a turnaround, including a possible sale of its deteriorating North American business. CEO Sheri McCoy addressed the media attention at the beginning of Avon’s earnings call on Thursday. She said the company aims to provide sustainable, profitable growth while creating value for its shareholders and opportunity for its representatives, and declined to comment further.
Excluding some items, earnings came in at 4 cents a share, a 67 percent decline from last year. Analysts had predicted earnings of 7 cents a share in the period. Diluted losses were 33 cents a share versus 38 cents a year ago. The results reflect a higher adjusted tax rate of 67.9 percent, compared to 46.3 percent in the first quarter of 2014.
The cosmetics maker reported constant dollar growth in all foreign markets, with EMEA leading the way at 9 percent over the prior year. Management said currency pressures were higher than anticipated in the quarter.