On Friday, ratings agency Moody’s Investors Service placed the ratings of Avon Products Inc. under review for possible downgrade. And the law firm of Finkelstein Thompson said it wants Avon shareholders to contact them about their legal rights, a typical move when law firms contemplate the filing of a lawsuit on behalf of shareholders seeking class-action status.
Wall Street investors on Friday sent shares of Avon down a further 14 cents, or 0.7 percent, to close at $18.85 in trading on the New York Stock Exchange. Friday’s fall came on the heels of an 18.3 percent dive the previous day.
The move by Moody’s affects $2.25 billion of rated debt, and comes the day after the company posted third-quarter results wherein Avon also said it didn’t expect to achieve the “stated targets” of revenue growth and operating margin improvement in fiscal year 2011. Moody’s said the move was also prompted by Avon’s disclosure of the formal “order of investigation” issued by the Securities and Exchange Commission.
The SEC is reviewing communications with certain financial analysts, as well as probing Avon’s international operations in connection with an inquiry under the Foreign Corrupt Practices Act.
Moody’s said that ratings placed under review include Avon’s A2 senior unsecured long-term and Avon Capital Corp.’s Prime-1 short-term ratings. The outlook for Avon is now “under review” from “negative.”
Jefferies equity analyst Per E. Ostlund said Thursday that Avon’s “3Q results disappointed on multiple levels, with local currency sales growth and operating margin expansion failing to deliver on plan.”
Stifel Nicolaus analyst Mark S. Astrachan on Thursday downgraded shares of Avon to “hold” from “buy” due to the miss of third-quarter earnings per share expectations, the withdrawal of full-year guidance and the SEC proceedings.
“One inquiry is bad, two is a major headache, and we believe the formal order relating to the FCPA investigation indicates a significant step-up in activity, with a resolution unlikely to come anytime soon,” Astrachan said.
The Stifel analyst added that while the operating environment has worsened, “Avon continues to underperform the global beauty and direct selling industries, categories with favorable growth. We believe this is mainly a result of current management‘s inability to execute and anticipate a prolonged period of underperformance as Avon tries to improve operations.”
UBS on Friday downgraded Avon’s stock to “neutral” from “buy” due to execution issues and the two SEC investigations. The price target for Avon shares was lowered to $20 from $31.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)