"Despite the 3Q miss, results show continued progress against long-term objectives. We view recent share weakness as a buying opportunity," the firm wrote in an analyst note on Monday.
Third-quarter revenue fell short of Wall Street's estimates due to a slowdown in Europe, the Middle East and Africa and declines in the Asia Pacific region. But revenue from Mexico, which is a key market, accelerated for the second straight quarter, Jefferies noted.
On a constant dollar basis, Mexico revenue was up 9% during the period, while Brazil revenue increased 6% in constant currency.
Brazil is Avon's largest market and makes up about 20% of revenue. "The country saw positive growth in both active/ending representatives, and is gaining market share in all three beauty categories," the firm said.
The company's three beauty categories are skincare, fragrance and color.
A key tenet of the firm's thesis on Avon is that the company can execute on its three long-term goals: low-single digit active representative growth, mid-single digit constant currency revenue and low-double digit adjusted operating margin. Jefferies believes the company is still executing on these objectives.
Additionally, the firm said a slight gross margin decline due to currency headwinds was more than offset by improvement in selling, general and administrative expenses (SG&A). Gross margin was 60.9%, down 20 basis points in the quarter.
"An expected positive inflection in GM did not come to fruition in 3Q (-20bps vs. our/consensus +25bps) as FX continued to be a headwind, which more than offset strategic pricing and lower supply chain costs," the firm added.