AVON ONGOING NET UP 13.7% IN PERIOD
NEW YORK — Led by a solid performance in the U.S., Avon Products Inc. reported fourth-quarter income from continuing operations rose 13.7 percent to $132 million, or 99 cents per share.
In the year-ago quarter, income from continuing operations was $116.1 million, or 86 cents. In the year-ago quarter, net income came to $86.5 million after a $29.6 million loss from discontinued operations.
In the quarter ended Dec. 31, sales moved up to $1.49 billion from $1.38 billion.
“We are particularly pleased with the performance of Avon U.S., which posted its third straight year of record results, and the Americas region, which expanded at a double-digit pace, thanks largely to a dramatic turnaround of Avon Mexico,” said James E. Preston, chairman and chief executive officer.
Avon U.S. posted a 15 percent gain in pretax profits in the quarter, “reflecting double-digit growth in higher margin cosmetics, fragrance and toiletries business as well as excellent results in gift and apparel lines,” the company said. Sales in the U.S. were up 5 percent.
Preston noted that operations in newer markets, such as China, Russia and the emerging businesses in Central Europe and the Pacific Rim are “experiencing very high growth rates.”
International pretax profits inched up 2 percent, due to gains in the Americas and Pacific region, partially offset by weak results in Japan. Profits declined in Europe due to a one-time $7 million value-added tax refund in the UK in 1995. Excluding the refund, profits in Europe improved over the year-ago period.
International sales advanced 10 percent (17 percent excluding foreign currency exchange).
In the full year, income from continuing operations climbed 11.1 percent to $317.9 million, or $2.38, from $286.1 million, or $2.10. In 1995, after the $29.6 million charge from discontinued operations, net income totaled $256.5 million.
Sales in the latest year grew 7.2 percent to $4.81 billion from $4.49 billion.
Avon U.S. posted a 7 percent rise in pretax profits on a 6 percent gain in sales. Avon said profits “were tempered by a higher level of strategic investments in marketing and advertising.”
Sales in the U.S. were up in all categories except for jewelry and accessories, the company said, with particularly strong results in gift and apparel categories as well as personal care.
Internationally, pretax profits moved ahead by percent for the year, reflecting gains in Americas and Europe, as well as one-time severance charges in 1995.
Avon said Japan was a “significant drag” on the Pacific region, which had a 9 percent increase in pretax profits and a 6 percent rise in sales. Excluding Japan, profits in the region jumped 46 percent and sales gained 33 percent.
Avon added that its financial position remained strong in 1996, with cash flow from continuing operations at $425 million and total debt at the end of the year of $200 million.