Following the spin-off of its North American operations, Avon Products Inc. reported an 8 percent revenue decline for the second quarter.
Avon posted $1.4 billion in sales for the quarter. In constant dollars, revenue increased 4 percent; in constant dollars and excluding the impact of the sale of Liz Earle, Avon revenues increased 5 percent. The company posted a $95.1 million profit for the quarter.
“Our second quarter results came in slightly above our expectations, driven by operating performance that was better than anticipated. We also saw some modest easing in foreign currency pressure,” said Avon chief executive officer Sheri McCoy. “We continue to make steady progress on a number of fronts: improving pricing discipline, driving additional cost out of the business, and continuing to build our brand and enhance the representative experience.”
For Avon, revenue declines came from each of its geographic areas. Europe, the Middle East & Africa dropped 2 percent to $520.9 million in sales; South Latin America dropped 12 percent to $535.7 million; North Latin America declined 5 percent to $224.4 million, and Asia Pacific dropped 10 percent to $141.9. Diluted earnings per share was 7 cents.
The company ended the quarter with a 1 percent increase in active Avon representatives, with increases in Europe, the Middle East and Africa, and North Latin America that were offset by declines in the Asia Pacific.
Avon’s numbers follow the recent spin off of the company’s North America business, which was sold to Cerberus Capital Management in March.
The business has been implementing a cost-cutting plan unveiled in January under which it plans to save $350 million in the next three years, as well as consider alternatives for the China business. That news came at Avon’s investor day, where executives said Cerberus would continue to work with the company to try to rationalize the supply chain, modernize business processes and make decisive strategic choices. Avon said it has identified $70 million in savings to be realized in 2016, with $50 million coming from changes in its operating model and $20 million coming from supply chain and sourcing savings.