By midafternoon, shares had taken off 2.9% to $14.63. Trading volume of 10.3 million was more than double its three-month average of 4.3 million.
In the three months to December, Avon Products reported revenue of $2.7 billion, 10% lower than a year earlier and around $80 million less than analysts surveyed by Thomson Reuters had forecast. Total units decreased 10%, with an 11% and 8% decline in beauty and fashion & home sales, respectively.
By region, Latin American sales were down 7% from the year-ago quarter, weighed down by a 15% drop in Mexico but partially offset by a 6% increase (stripping out forex impacts) in Brazil. In Europe, the Middle East and Africa, revenue was down 4%, with a 3% and 5% drop in Russia and the U.K., respectively.In North America, sales declined 21%, lagged by a 25% decrease in beauty sales. Sales in the Asia Pacific were 22% lower, with revenue in China half that of the year-ago quarter. "Although the second half of the year was impacted by both execution and macro-economic factors, I'm pleased that we are making headway toward our financial goals and Avon's return to profitable growth," said CEO Sheri McCoy in a statement. Also depressing investor sentiment, the New York-based company is in advanced negotiations to settle a bribery probe levied against it by the U.S. Securities and Exchange Commission and Department of Justice. In a conference call to analysts on Thursday, McCoy said a settlement would likely cost between $89 million and $132 million. "Our discussions with the government are ongoing and differences remain, but the team is working hard in an effort to bring these matters to a close," she said. Also See: Comcast's Deal for Time Warner Cable is Good For America