Avon Posts Profit Even as Sales Slip

NEW YORK -- Cosmetics maker Avon Products (AVP) said Tuesday fourth-quarter profit rose 80% from a year ago, when the company faced hefty restructuring charges, but results missed analyst expectations as the stronger dollar and a consumer spending slump crimped sales.

Net income increased to $232.4 million, or 54 cents per share, from $128.9 million, or 30 cents per share, a year earlier. That missed the 59 cents per share that analysts surveyed by Thomson Reuters expected.

Revenue fell 9% to $2.81 billion from a year ago. Analysts predicted sales of $2.89 billion.

Units sold fell 3% and the stronger dollar hurt sales by 11%age points.

The New York company also said Tuesday it will increase its quarterly dividend by a penny to 21 cents, payable March 2 to shareholders of record as of Feb. 17.

Avon said it expects 2009 to be "challenging" and it plans to cut spending in 2009 to offset the weaker economic environment.

"In terms of our cost structure, we intend to take significant additional steps to transform our value chain, as well as to aggressively reduce non-strategic spending in the current year," said Andrea Jung, chairman and chief executive, in a statement.

For the year, profit rose 65% to $875.3 million, or $2.04 per share, from $530.7 million, or $1.21 per share.

Revenue rose 8% to $10.69 billion from $9.94 billion.

>To order reprints of this article, click here: Reprints