posted a 67% drop in first-quarter earnings but managed a 6% sales gain and beat Wall Street targets.
The New York-based cosmetics giant made $56 million, or 12 cents a share, for the quarter ended March 31, down from the year-ago $172 million, or 36 cents a share. The latest quarter was hit by 19 cents a share worth of restructuring charges. Excluding those costs, earnings were 31 cents a share, 4 cents ahead of the Thomson Financial analysts' consensus estimate.
Sales rose to $2 billion from $1.88 billion a year earlier, ahead of the $1.89 billion target.
In the North America region, first-quarter revenue rose 3% on both a dollar and local-currency basis, with all markets contributing solid increases. Active Representatives were 5% lower and units decreased 3%. These declines were more than offset by a larger average order that was driven by strong product launches in skin care, as well as strength in the Beauty Plus category.
Asia Pacific revenue was 11% lower in the quarter (8% lower in local currency), units declined 10% and active Representatives decreased 15%, as the region's performance continued to be impacted by a sizable revenue decline in Japan. Avon's Japan business continued to face issues as it shifts from a direct-mail, customer-centric model to a more traditional direct-selling model. The region had an operating loss of $2 million in the quarter, vs. operating profit of $29 million in the prior-year quarter, mainly due to the lower revenue and $13 million in costs to implement restructuring in the quarter.