Avon boosted by EMEA: profit tops projections

By Lucy Whitehouse

- Last updated on GMT

Avon boosted by EMEA: profit tops projections

Related tags Middle east Avon

The news came in the company’s recent announcement of its results for the fourth quarter and fiscal year ended at the end of 2017.

Sales in Europe, the Middle East and North Africa (EMEA), which makes up a bulk of the company’s total sales at 40%, were up 3%, and also saw a rise in the number of sales representatives active in the region.

Jan Zijderveld was recently announced as the company’s new CEO​, and spoke positively of the recent results.

"I am excited to be joining such a special business at this important chapter in the company's history. Very few brands have Avon's brand recognition, extensive global reach and operate in attractive beauty channel categories​.”

The CEO suggests that the rising consumer demand being seen for trust and transparency means Avon can set itself apart due to its direct sales model:

“In a world where trust in companies is becoming a scarce commodity, our Representatives' relationships with their consumers has never been more relevant or compelling."

Company highlights

Highlights for Avon’s Fourth Quarter of 2017, according to the company, include:

  • Total Revenue was relatively unchanged at $1.6 billion; Declined 2% in constant dollars1

  • Active Representatives and Ending Representatives declined 2% and were relatively unchanged, respectively

  • Operating Margin increased 150 bps to 8.3%; Adjusted1 Operating Margin increased 250 bps to 9.8%

  • Diluted Earnings Per Share From Continuing Operations of $0.17; Adjusted Diluted Earnings Per Share From Continuing Operations of $0.12

Still facing pressure

Jamie Wilson, Avon CFO, suggested that the beauty multinational does not consider itself out of the woods yet, "Our top line remains under pressure as we continue to operate in challenging macro and competitive conditions, particularly in our largest markets.

We delivered improving operating margins in the fourth quarter supported by continued benefit from our ongoing cost savings initiatives. Importantly, we continued to strengthen our cash position, enhancing the financial flexibility necessary to fund priority investments​."

Zijderveld asserted that he will be looking to step up the results moving forward, "With the support of the Board of Directors, and the reality of our current performance, I am taking a fresh look, diving deeply into our business, starting with spending time in our key markets to gain a full picture of the operating climate as a basis to improve performance.

I am committed to accelerating the pace of change and to positioning Avon for success​."

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