Avon is still struggling to regain sales momentum, but in the midst of the company’s sale to Natura, chief executive officer Jan Zijderveld is focusing on the positive.
“Our focus on productivity in the second quarter, including less discounting, more effective incentives, optimizing promotions and more favorable mix, led to a 5 percent improvement in average representative sales with price/mix up 9 percent,” Zijderveld said in a statement when the company’s earnings — which are down — were released. “We have continued to improve mix and tiering by increasing our focus on higher priced categories, like fragrance, skin-care and product bundles. Faster development and launches of on trend innovation has allowed us to leverage pricing power on new items.”
While sales figures from active Avon sales representatives were up, the number of reps declined 10 percent in the quarter, which ended June 30. For that quarter, Avon posted $1.17 billion in sales, down 13 percent from the prior year quarter. Net losses narrowed year-over-year to $19.1 million, from $37 million. Losses per share were 3 cents.
A geographic breakdown shows that the declines were spread across regions. Europe, the Middle East and Africa posted $425.1 million in sales, a 15 percent dip from the prior year; South Latin America posted $443 million, a 14 percent decline; North Latin America had $193.8 million in sales, down 7 percent, and Asia-Pacific posted $108.4 million in sales, down 4 percent year-over-year.
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In May, Natura Cosméticos SA unveiled plans to take over Avon, saying the combined businesses could become the fourth largest pure-play beauty company in the world with $9.3 billion in net sales. The deal has not yet closed.