A container and brush of Super Full mascara by Avon sits on display in North Andover, Mass. Direct beauty products seller Avon Products said its third-quarter net income fell 81 percent, hurt by the stronger dollar and an impairment charge. The company also slashed its dividendEarns Avon, North Andover, USA

Avon Products Inc.’s shares fell sharply Thursday after the company reported a net earnings decline.

Shares fell 9.5 percent to $2.14 Thursday after the company reported its third-quarter results. Avon’s net earnings fell 66.6 percent to $11.9 million, down from $35.6 million in the prior-year period. Net sales increased about 1 percent year-over-year, to almost $1.4 billion. Diluted earnings per share were 1 cent. Avon said it is within $25 million of its $230 million annual cost-savings target, and on track to meet its three-year goal (the company unveiled a transformation plan in early 2016).

Avon chief financial officer Jamie Wilson said on the company’s earnings call that the company is investing to upgrade its technology to something that is more user-friendly for its sales reps “to make it easier for representatives to run their business.”

For the nine months ended Sept. 30, Avon narrowed its loss to $70.4 million, from $96.9 million in the prior-year period. Net sales for the first nine months of the year were also down slightly to $4.03 billion from $4.05 billion.

For the third quarter, active representatives declined 3 percent and ending representatives dropped 2 percent, the company said. That dip was mostly caused by a representative decline in Brazil, Avon executives said on the company’s earnings call.

Avon had relaxed credit policies in Brazil to try to ramp up the number of representatives there, but that led to “delinquencies” and a bad debt problem, Wilson said. Avon is pulling the program in the other direction with tighter financial controls, he said. Brazil is one of Avon’s top markets.

Beauty was one bright spot for Avon during the third quarter, where sales inched up to $1.03 billion from $1.01 billion in the prior-year period. Skin-care sales were essentially flat for the quarter, at $397.1 million; fragrance sales were up 4 percent, to $389.8 million and color sales were up 1 percent to $246.3 million. The company’s fashion and home division was down 2 percent for the quarter, to $345 million in net sales.

Avon has struggled in recent years, and sold most of its North America business to Cerberus Capital Management in 2016. The company also considered options for its China business, but ultimately decided not to sell it. Avon has appointed new leadership in the U.K. and the Philippines, which the company is hoping will help improve those business segments, executives said on the call.

“I am encouraged by the revenue improvement in many of our top 15 markets and the underlying business trends we are beginning to see. Our innovation pipeline is starting to gain traction and we are close to realizing our annual cost-reduction milestone. We remain intensely focused on improving our representative experience, which results in higher engagement and her success,” said Sheri McCoy, chief executive officer. “It will take time to fully realize the benefits from our near and long-term initiatives in this highly competitive market, but with the right team in place we are poised to accelerate the pace of our progress.”

Avon is still on the hunt for a new ceo, as McCoy will leave the company next March. “The search for a new ceo for Avon is under way. The board is pleased with the progress and the strong interest we are receiving,” said Chan Galbato, non-executive chairman of the board.

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