Market Overview

Avon Reports Third-Quarter 2019 Results


LONDON, Oct. 31, 2019 /PRNewswire/ -- Avon Products, Inc. (NYSE:AVP) today announced its results for the quarter ended September 30, 2019.


Change vs 3Q18

Reported (GAAP)

Adjusted1 (Non-

Reported (GAAP)

Adjusted1 (Non-

Total US$ Reportable Segment Revenue





Total C$1 Reportable Segment Revenue Change


Gross Margin



(160) bps

100 bps

US$ Operating Profit





Operating Margin



(490) bps

300 bps

Diluted EPS from continuing operations





Free Cash Flow1



Jan Zijderveld, Avon CEO, said, "We continue to execute our Open Up turnaround strategy, with productivity gains driving adjusted operating margin expansion and improved free cash flow1. The push and pull strategies that we have spoken about, along with a bigger, on trend stream of innovations, are working together to create significant value. As expected, revenues declined as we continued to make sharper choices designed to drive a healthier, more sustainable and more profitable business."

Mr. Zijderveld continued, "Our focus on productivity led to a 4% improvement in Average Representative Sales with price/mix up 9%. We are restoring brand relevance and improving the effectiveness of our portfolios with innovation focused on Beauty. Our training programs are expanding and getting stronger based on what we have learned. Representatives are more productive and better practices are improving the quality of sales, both of which are crucial to sustainable, profitable growth."

Gustavo Arnal, Avon CFO, said, "We continue driving pricing and productivity improvements across all areas of our business. As we do this, we are transitioning to a more financially sound and sustainable business. Adjusted operating margins in Q3 doubled versus prior year, in spite of FX. Year to date, we have reduced headcount by 15% and aggressively reduced costs as part of our Fuel for Growth program. Free Cash Flow in Q3 was four times higher than last year, even as we funded significant restructuring investments."

Highlights for Third-Quarter 2019 (compared with third-quarter 2018, unless otherwise noted):

  • Total Reportable Segment Revenue decreased 16% in reported currency. Adjusted Total Reportable Segment Revenue decreased 6% in constant dollars, driven by unit volume declines from less profitable products.
  • Price/mix increased 9%, driven by increases in every segment, as well as in every category.
  • Average Representative Sales in constant dollars from Reportable Segments increased 4%, driven by increases in Latin America and Asia Pacific.
  • Active Representatives increased 1% compared to second-quarter 2019 and declined 10% versus third-quarter 2018.
  • Gross Margin of 60.6%. Adjusted Gross Margin increased 100 basis points to 58.1%, driven by price/mix which offset foreign exchange.
  • Operating Margin of 8.2%. Adjusted Operating Margin increased 300 basis points to 6.0%, driven by price/mix and savings across multiple cost lines, more than offsetting foreign exchange.
  • Diluted Earnings Per Share from continuing operations of $0.21. Adjusted Diluted Earnings Per Share of $0.11, compared with Adjusted Diluted Earnings Per Share of $0.00 for third-quarter 2018.

Third-Quarter 2019 Segment Review (compared with third-quarter 2018, unless otherwise noted)


($ in millions)


Adjusted Revenue


Sales C$

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