Avon Products Inc. posted another revenue decline for the third quarter while operating profits rose.
The company posted an increased net operating profit of $112 million, up $67 million from the prior year period. Net revenue declined 2 percent to $1.4 billion, but when adjusted for foreign currency effects was up 4 percent. Diluted earnings per share were 7 cents.
Avon, which sold its North America unit to Cerberus Capital Management earlier this year, is undergoing a transformation plan to reduce costs and invest in growth. Announced in early 2016, the plan includes saving $350 million over three years. Avon is ahead of its 2016 goal of $70 million in savings, having realized $80 million.
Regionally, Europe, the Middle East & Africa brought in $476.4 million in revenue, a 4 percent decline year over year. South Latin America posted $594.8 million in revenue, up 4 percent year over year. North Latin America had a 6 percent decline, with $196.8 million in revenue, and Asia Pacific posted a 9 percent drop, to $132.8 million.
EMEA’s decline was due to decreases in Russia, where an increase in active Avon representatives was offset by a lower average order, and the U.K., where revenue was down 14 percent, as a higher average order was offset by a drop in representatives.
In South Latin America, Brazil was up 14 percent, but Mexico was down 5 percent. In the Asia Pacific segment, the Philippines posted a 2 percent decline in revenue.
“Avon’s third quarter results reflect broad-based performance improvements resulting in local currency sales growth across our top markets and significant operating margin expansion versus the prior year,” said chief executive officer Sheri McCoy. “We have also taken actions to significantly improve our balance sheet and have accelerated the pace of our 2016 cost savings initiatives. I am pleased with our progress against the Transformation Plan as we continue to position Avon to deliver sustained long-term profitable growth.”