Avon Products, Inc., a London-based globally recognized leader in direct selling of beauty and related products, has reported results for the fourth quarter and fiscal year ended December 31, 2017.
For the fourth quarter of 2017, total revenue was relatively unchanged at $1.6 billion. Active Representatives and Ending Representatives declined 2 percent and were relatively unchanged, respectively. Operating margin increased 150 bps to 8.3 percent, and adjusted operating margin increased 250 bps to 9.8 percent.
“I am excited to be joining such a special business at this important chapter in the company’s history,” said recently appointed CEO Jan Zijderveld. “Very few brands have Avon’s brand recognition, extensive global reach and operate in attractive beauty channel categories. In a world where trust in companies is becoming a scarce commodity, our Representatives’ relationships with their consumers has never been more relevant or compelling.”
Jamie Wilson, Avon CFO, remarked, “Our top line remains under pressure as we continue to operate in challenging macro and competitive conditions, particularly in our largest markets. We delivered improving operating margins in the fourth quarter supported by continued benefit from our ongoing cost savings initiatives. Importantly, we continued to strengthen our cash position, enhancing the financial flexibility necessary to fund priority investments.”
For fiscal 2017, the company reported that total revenue was relatively unchanged at $5.7 billion. Avon realized more than $250 million of cost savings, exceeding its target of $230 million for 2017. Active Representatives and Ending Representatives declined 3 percent and were relatively unchanged, respectively. Operating margin decreased 80 bps to 4.8 percent, and adjusted operating margin decreased 30 bps to 6.2 percent.
“With the support of the Board of Directors, and the reality of our current performance, I am taking a fresh look, diving deeply into our business, starting with spending time in our key markets to gain a full picture of the operating climate as a basis to improve performance,” said Zijderveld. “I am committed to accelerating the pace of change and to positioning Avon for success.”
To see the full Avon Q4 report, click here.
