May 2, 2019 / 11:32 AM / 2 months ago

Avon revenue misses on fall in sales representatives

(Reuters) - Cosmetics maker Avon Products Inc missed first-quarter revenue estimates on Thursday, hit by fewer direct sales representatives in Europe, Middle East & Africa and Brazil, its biggest market.

The number of company’s active representatives fell for the tenth straight quarter and were down 9 percent in the reported period.

The ‘Little Black Dress’ perfume maker is a direct-selling brand that has sales representatives popularly known as ‘Avon Ladies,’ who go door-to-door to sell its lipsticks, skincare and other products.

The company, which has been plagued by falling sales, launched its turnaround program ‘Open Up Avon’ last year to reboot direct selling, while investing in e-commerce and digital capabilities.

Adjusted operating margin rose 50 basis points to 4.5 percent in the reported period, as the company kept a check on costs.

On an adjusted basis, sales in Europe, Middle East and Africa fell 9 percent, while they rose 1 percent in South Latin America, due to higher average orders and higher prices in Argentina, offsetting weakness in its Brazil business.

The company’s loss widened to $32.7 million, or 9 cents per share, in the first quarter ended March 31, from $20.3 million, or 6 cents per share, a year earlier.

Total revenue fell 15 percent to $1.19 billion, missing analysts’ average estimate of $1.24 billion, according to IBES data from Refinitiv.

Reporting by Jaslein Mahil and Soundarya J in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta

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