* Adj. EPS $0.01 vs. est. $0.09
* Shares slide 18 pct to 6-month low
* Says about $120 mln in cost savings in 2016
By Richa Naidu
Feb 16 Avon Products Inc reported
fourth-quarter revenue and profit that missed estimates as the
cosmetics maker failed once again to hold on to its "Avon
Ladies", sending shares down to a more than six-month low on
Revenue fell for the 21st straight quarter as the number of
Avon Ladies - representatives who have sold the company's
products door to door since it was founded in 1886 - declined
across all markets.
Avon, whose brands include Skin-So-Soft and the Outspoken by
Fergie fragrance line, has had patchy success in retaining these
employees in recent years.
The company has also struggled for the past four years with
changing consumers tastes and habits, raising concerns that its
more than 130-year-old direct-selling model is outdated and
unable to attract shoppers who want instant gratification.
Total revenue declined 2.4 percent to $1.57 billion, missing
the average analyst estimate of $1.61 billion, according to
Thomson Reuters I/B/E/S. On an adjusted basis, Avon earned 1
cent per share versus analysts' average estimate of 9 cents.
During a post-results conference call, Avon faced a barrage
of questions from analysts expressing concerns about the health
of the company, which reported lower quarterly revenue in all
but one of its markets.
Analysts remarked that they didn't know how to model the
company anymore and were worried about Avon's dwindling
In Europe, Middle East and Africa, revenue fell 7 percent,
while it declined 10 percent in north Latin America, more than
offsetting a 9 percent jump in revenue from south Latin America,
Net loss attributable to the company narrowed to $10.7
million, or 4 cents per share, in the quarter ended Dec. 31,
from $333.4 million, or 76 cents, a year earlier. The year-ago
period included a loss from discontinued operations of $317.1
Avon announced a three-year turnaround plan in January 2016
to cut $350 million in costs, invest in technology and tap
social media to revive sales amid concerns that its
direct-selling model is outdated.
The company said it realized about $120 million in cost
savings last year and is on track to achieve the plans.
Shares in Avon, which have more than doubled in value since
the company first announced the turnaround on Jan. 21, 2016,
fell nearly 19 percent in late-morning trading.
(Reporting by Richa Naidu in Bengaluru; Editing by Martina