S&P HIKES AVON PRODUCTS RATING
NEW YORK — Standard & Poor’s has raised the ratings on $121 million of debt of Avon Products Inc., citing the beauty firm’s improved and operating performance.
The ratings on Avon Capital Corp.’s senior debt was upped to single-A from single-A-minus, and its commercial paper to A-1 from A-2. Avon Capital is the financing arm of Avon Products.
S&P said the upgrade is based on the stability of sales and pretax earnings despite a variety of trouble spots over the past three years, such as disappointing U.S. earnings in 1993, a 70-percent drop in European earnings in 1994 and the Mexican peso devaluation in 1995.
“The geographic breadth of Avon’s operations is providing a solid cushion for unpredictable, underperforming areas that likely will continue as the company pursues further global expansion,” the rating agency said.
Avon reported fourth-quarter income from continuing operations rose 5.4 percent to $116.1 million from $110.1 million a year ago. Sales edged up 1.5 percent to $1.38 billion from $1.36 billion.
Avon stock closed Tuesday at 87 7/8, up 1 5/8, on the New York Stock Exchange.