Avon: First-Quarter revenue decreased by 4 % / Cost savings

For the first quarter of 2013, total revenue of $2.5 billion decreased 4 %, but was relatively unchanged in constant dollars.

Avon Beauty sales declined 5 %, or 1 % in constant dollars. On a reported basis, fragrance grew 1 %, while personal care, color and skincare declined 3 %, 6 % and 12 %, respectively. On a constant-dollar basis, fragrance increased 6 % and personal care was unchanged, while color and skincare declined 2 % and 9 %, respectively, the company reported. Operating profit was $172 million in the quarter.

Avon Products released further details of the companys previously announced $400 million Cost Saving Initiative by 2016.

According to the company, the latest actions include a global headcount reduction of more than 400 associates across all regions and functions, and the restructuring or closure of certain smaller, underperforming markets, primarily in Europe, Middle East & Africa, including the exit of the Republic of Ireland market. These actions, like those previously announced, are aimed at boosting efficiencies and concentrating resources on high priority markets and activities. The company expects these actions to be largely completed before the end of 2013.

Avon said that total charges related to these actions are expected to be in the range of $35 to $40 million before taxes and that approximately $20 million of that total will be recorded in the first quarter of 2013.

The company expects these actions to generate approximately $45 to $50 million in annualized savings, when fully implemented, as part of its $400 million cost savings goal.