Fourth-quarter sales declined at Avon Products Inc. as the beauty company contended with currency headwinds and fewer active sales reps.
Revenue slipped 2 percent from a year earlier to $1.57 billion. On a regional basis, South Latin America recorded 9 percent growth, offset by a 10 percent drop in North Latin America, 9 percent in Asia Pacific and 7 percent in Europe, Middle East and Africa.
The decline in revenue corresponded to a 2 percent decrease in active Representatives. Management said Representative engagement remains a top priority in 2017, as Avon carries out a three-year turnaround plan introduced last year, following the sale of its North America business. The company also plans to cut $350 million in costs and invest heavily in technology.
“We made good progress in the first year of our transformation plan, exceeding our cost savings targets, improving our profit margin, and significantly strengthening our balance sheet,” Sheri McCoy, Avon CEO, said in the company’s release. Despite these advances, fewer reps and an unexpected increase in bad debt expense, primarily in Brazil, contributed to a “disappointing” quarter, said McCoy.
The seller of cosmetics, perfumes and accessories recorded a bottom-line loss of $10.7 million, or 4 cents per share, compared with a loss of $333.4 million, or 76 cents per share, a year earlier.
Avon reported adjusted earnings of a penny a share, which fell short of the 9 cents predicted by analysts. In the same poll by Thomson Reuters, the average revenue estimate was $1.61 billion.