Avon´s Second-Quarter 2011 Results: Revenue Up 9%

Avon Products, Inc. has reported second-quarter 2011 total revenue of USD 2.9 billion, 9% higher than that of second-quarter 2010. Constant-dollar sales rose 2% in the second quarter as foreign exchange contributed 7% to growth. Total units declined 3% while price/mix rose 5% during the quarter. Active Representatives were flat in the quarter. The acquisition of Silpada Designs, Inc. ("Silpada") contributed 150 basis points to revenue.

"Our first-half 2011 results were in line with our expectations of low-single digit constant-dollar growth and adjusted operating margins flat with a year ago," said Andrea Jung, Avons Chairman and Chief Executive Officer. "We continue to expect mid-single digit revenue growth in the second half of this year, driven by our major global field activation program around our 125th anniversary. We also continue to expect significant margin expansion in the second half, resulting from gross margin improvement and revenue leverage."

Avons Beauty sales increased 8% year over year, or up 1% in constant dollars, in the second quarter. On a reported basis, fragrance and personal care grew 11%, color grew 8%, and skincare grew 3%. On a constant-dollar basis, fragrance and personal care grew 4%, color was flat, and skincare declined 4%.

Second-quarter 2011 operating profit of USD 317 million was up 19% compared with the year-ago quarter, and operating margin was 11.1%, up 100 basis points year over year. Adjusted operating profit was up 6%, and adjusted operating margin was 11.5%, down 30 basis points from a year ago due to the lower gross margin.