Beauty Industry

Avon Posts 9% Sales Increase for 2nd Quarter

Second-quarter 2011 total revenue was 9% higher than that of second-quarter 2010.

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By: Jamie Matusow

Editor-in-Chief

Avon Products, Inc. reported second-quarter 2011 total revenue of $2.9 billion, 9% higher than that of last year’s second-quarter. Constant-dollar sales rose 2% in the second quarter with foreign exchange contributing 7% to growth. Total units declined 3% and the price/mix rose 5% during the quarter. The acquisition of Silpada Designs Inc. contributed 150 basis points to revenue.

“Our first-half 2011 results were in line with our expectations of low-single digit constant-dollar growth and adjusted operating margins flat with a year ago,” said Andrea Jung, Avon’s chairman and chief executive officer. “We continue to expect mid-single digit revenue growth in the second half of this year, driven by our major global field activation program around our 125th anniversary. We also continue to expect significant margin expansion in the second half, resulting from gross margin improvement and revenue leverage.”

Avon’s Beauty sales increased 8% year over year, or up 1% in constant dollars, in the second quarter. On a reported basis, fragrance and personal care grew 11%, color grew 8%, and skincare grew 3%. On a constant-dollar basis, fragrance and personal care grew 4%, color was flat, and skincare declined 4%.

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