Consumer spending appears to holding steady when it comes to makeup.
on Friday posted a rise in first-quarter earnings, citing stronger-than-expected international sales.
The company earned 42 cents a share, compared with analysts' estimates of 41 cents a share and earnings of 40 cents a share in the year-ago period. Net income was $98.9 million, up from $96.3 million in the first quarter of 2002. Results include $18 million in pretax costs associated with repositioning the company's beComing product line.
Revenue rose 7% to $1.47 billion. Overall sales were driven by an 11% increase in beauty products, the company said.
"Our international operations outperformed our expectations in the quarter, generating a sales gain of 11% and an operating profit increase of 26%," said Andrea Jung, Avon's chief executive. "Once again, international results were driven by outstanding performance in Europe and Asia."
Looking to the second quarter, the company expects U.S. sales growth to be up in the 3% range. Earnings are forecast to be up in the mid-single-digit range, mainly reflecting unusually high foreign-exchange gains last year that do not repeat in 2003, Avon said. Analysts expect 71 cents a share in the second quarter. The company earned 64 cents a share in the 2002 comparable quarter.
New York-based Avon also said it is on track to achieve its full-year earnings target of $2.55 a share, which is below analysts' expectations of $2.57 a share. The company earned $2.32 a share in 2002. Avon's shares were down 1.6% in morning trading at $56.63.