Avon Posts $37M Loss for Q2

Avon Products Inc.'s second quarter numbers remained in the negative.
For the second quarter, Avon posted a $37 million loss. The business had $1.4 billion in revenue, down 3 percent, including a 4 percent benefit from new revenue recognition standards, and 1 percent from the Brazil truckers' strike. Active representatives were down 4 percent, in due part to the strike. Rep numbers dipped in South Latin America, Europe, the Middle East and Africa and North Latin America.
For the six months ended June 30, Avon posted $2.58 billion in sales, down 3 percent from the prior year period, and a $58.1 million loss, an improvement from the previous year's $82.3 million loss.
"Entering my seventh month at Avon, I am encouraged by improved revenue growth in three of our top five markets and the promising trends we are seeing across the majority of the rest of our business," said Avon chief executive officer Jan Zijderveld. "This is underpinned by our improving service quality and operational efficiencies, and in turn reflected in our higher operating margin. However, we are not yet satisfied with the overall operating results of the quarter."
Avon has hired several new regional managers and its first chief digital officer in recent weeks, and is trying to "continue to institute a performance culture through increased accountability, agility and speed of execution," Zijderveld said.
Avon is also working to improve its representative experience, and plans to send 500,000 reps through enhanced training in the second half.
"We are becoming more agile, halving the time to bring on-trend products to market with over 200 expected to launch in the second half," Zijderveld said. "We will support our second half global launches with an additional $30 million of advertising and marketing spend. And, finally, we are placing digital at the center of all actions to drive our future progress, enhancing our digital and e-commerce capabilities through initiatives such as our new mobile e-brochure, which is locally customizable and distributed via social media. This is an important first step to build a digital social selling beauty company."
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