NEW YORK — With a 27.3 percent gain in 2004 earnings and a fourth-quarter profit increase of 10.5 percent, Avon Products Inc. chairman and chief executive officer Andrea Jung made good on a prediction she made last April when she said the year...
NEW YORK — With a 27.3 percent gain in 2004 earnings and a fourth-quarter profit increase of 10.5 percent, Avon Products Inc. chairman and chief executive officer Andrea Jung made good on a prediction she made last April when she said the year would “reflect the true impact of Avon’s transformation.”
And thanks to a bevy of product launches in the pipeline, including a venture into plus-size intimates, the beauty products giant isn’t planning to slow down in 2005.
Avon said Tuesday that full-year 2005 earnings could beat analysts’ current earnings forecast, while cash flow from operations is predicted to reach a record $1 billion.
“The consistent strength of our consolidated geographic portfolio, together with the tremendous level of cash that our business now generates — more than double the level of four years ago — should provide a very solid foundation for unleashing further growth as we continue to move forward with Avon’s transformation,” Jung said in a statement. The “transformation” refers to a strategy the company implemented in 2001 to improve efficiencies.
In the fourth quarter, New York-based Avon earned $288.8 million, or 61 cents a share, matching the Wall Street consensus, which compares with $261.3 million, or 55 cents, in the year-earlier quarter. Total revenues in the three months ended Dec. 31 were $2.3 billion, up 10 percent from $2.1 billion a year ago. By division, Avon said sales of beauty products increased 16 percent to $1.5 billion, while sales of Beyond Beauty dropped 5 percent to $375.7 million.
Regionally, total sales in the U.S. fell 5 percent in the quarter to $642.1 million due predominantly to a 16 percent decline in the Beyond Beauty category, whose toys and gifts categories will be repositioned in 2005. European sales, however, rose 26 percent to $694.7 million, with Central and Eastern Europe performing strong.
In full-year 2004, Avon posted earnings of $846.1 million, or $1.77 a diluted share — also matching analysts’ estimates — compared with $664.8 million, or $1.39, in the prior year. The company said earnings per share in both the fourth quarter and full year 2003 were restated to reflect a two-for-one stock split, which occurred in May 2004.
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