Avon disappoints as sales rep ranks shrink

Cosmetics maker Avon Products reported fourth-quarter revenue and profit that missed estimates as demand slipped in all but one of its markets.

Revenue fell 7 percent in Europe, Middle East and Africa, and 10 percent in north Latin America, more than offsetting a 9 percent jump in revenue from south Latin America, Avon said on Thursday.

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 million.

Total revenue for the company, whose brands include Skin-So-Soft and the Outspoken by Fergie fragrance line, declined 2.4 percent, to $1.57 billion.

Analysts on average expected revenue 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.

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in costs, invest in technology and tap social media to revive sales amid concerns that its direct-selling model is outdated.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.

Avon has posted falling sales for more than four years as it struggles with the changing tastes of consumers, who prefer niche brands.

The company has also seen a significant drop in the number of its famous “Avon Ladies” — representatives who sell door to door. Active representatives in the quarter fell 3 percent.