Monday, November 09, 2015

Exchange makes Avon reverse profit and close quarter with losses

Avon cosmetics maker reported third-quarter net loss of $ 697 million, reversing a profit of $ 92 million achieved in the same interval last year. The diluted loss per share was $ 1.58, up from a paper profit of $ 0.21 a year earlier.
In a report, the company partnered with the negative result in the appreciation of the dollar compared to other currencies and macroeconomic pressures that helped weaken demand in the period.
"This was a difficult quarter, impacted by the currency and other economic pressures and our financial results have not been as we'd like them to be," he said, in a report, Sheri McCoy, Executive Chairman of Avon. "Given the challenging environment, I am proud of the progress that our teams are doing, leading to a solid performance and promoting improvements in the engagement of the dealerships," said the Executive.
Avon's global net revenues fell to 22% in the third quarter, to $ 1.63 billion. Excluding exchange rate variations, the fall was 2%. The company informed that the payment of some taxes in Brazil and the sale of business Liz Earle also brought negative impact to the operation. Excluding all those items, the dollar would have grown revenue 3%.
In Brazil, the recognition of ICMS credits in 2014, who helped in the balance sheet last year, was not repeated in 2015, which generated a negative effect of 4 percentage points in revenue in dollars.
The company reported in the balance sheet a 42% drop in Brazilian revenues in the third quarter, compared with the same period last year. Discounting the effect of the dollar, the recipe in the country fell 10%.
In Latin America, had 26% drop to $ 790.9 million, with negative effect of high inflation in the region-especially in Venezuela and Argentina.
Sales in units had 6% drop in the world, with sales declining in Latin America and North America. The company raised prices by 4% in the quarter, on average. Sales of beauty items had 23% reduction in the period, while sales of fashion products and articles for the home fell 15%.
In the quarter, Avon has reduced the cost of the sale by 19.8% to $ 652.7 million. General and administrative expenses fell 12.8% to $ 991.2 million. The operating profit was reduced by 88%, to $ 23 million.
Avon reported still designing for the year 19% drop in revenue, with the exchange rate variations, a 1 percentage point drop in the operating margin and a 3 percent decline in operating profit margin.
Valor Economico
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