Avon Products, Inc. reported fourth-quarter 2010 total revenue of $3.2 billion, 1% higher than that of fourth-quarter 2009. Constant dollar sales rose 5% in the fourth quarter as foreign exchange reduced growth by 4%. Total units declined 2%, while price/mix rose 7% during the quarter. Active Representatives were flat in the quarter. Acquisitions contributed approximately 3% to revenue growth in the fourth quarter, 1% to units, and 2% to price/mix.

Andrea Jung, chairman and CEO, commented, “As we closed out the year, we continued to experience disappointing sales results which were negatively impacted by service disruptions in Brazil and weak performance in Russia. Looking ahead, we are aggressively addressing execution challenges which dampened our second-half 2010 performance. Our business fundamentals remain solid, and we believe our strong field programs and innovation pipeline that begin in the second quarter of 2011 should drive another year of mid-single digit constant dollar revenue growth. We expect improvement in operating margin this year in line with our commitment to mid-teens operating margin by 2013.”

Avon’s Beauty sales declined 1% year over year during the fourth quarter of 2010, or up 2% in constant dollars. On a reported basis, fragrance was up 4%, personal care was up 3%, color was down 2%, and skin care was down 12% for the fourth quarter. Constant dollar revenue was up 9% in fragrance, up 6% in personal care, up 1% in color, and down 10% in skin care.

Fourth-quarter 2010 gross margin of 61.8% was 90 basis points below that of the prior-year quarter, due to higher product costs and adverse product mix which were partially offset by increased pricing.

Selling, general and administrative expenses in the quarter increased as a percent of revenue by 90 basis points versus fourth-quarter 2009. On an adjusted basis, it increased by 20 basis points.

Advertising for the quarter was $92 million, down 15% or $17 million from a year ago, primarily due to reductions in China. Avon invested an incremental $32 million in the Representative Value Proposition (“RVP”) in the fourth quarter in Sales Leadership, Service Model Transformation and Web enablement.

Fourth-quarter 2010 costs associated with the company’s 2005 and 2009 restructuring programs were $58 million pre-tax, or $0.09 per share after-tax. These costs compared with $34 million pre-tax, or $0.06 per share after-tax, related to the company’s 2005 and 2009 restructuring programs in the prior-year period. The total cost of the 2009 restructuring program is now expected to be approximately $300-$310 million, at the lower end of our expected $300-$400 million range. We continue to expect to reach our original target of approximately $200 million in annualized savings from our 2009 restructuring program once all initiatives are fully implemented by 2012-2013. The company does not expect to announce any further initiatives in connection with the 2009 restructuring program.

In addition, Avon sold its ownership interest in Avon Japan in the fourth quarter of 2010. This transaction and the operating results of Avon Japan are now reported as discontinued operations for all periods.

Fourth-quarter 2010 operating profit of $356 million was down 13% compared with the year-ago quarter and operating margin was 11.2%, down 180 basis points year over year. Adjusted operating profit was down 6%, and adjusted operating margin was 13.1%, down 100 basis points from a year ago. The decline was due primarily to the lower gross margin.

Fourth-quarter 2010’s effective tax rate was 34%, compared with 30.6% in fourth-quarter 2009. The tax rate was affected in the year over year comparisons by unfavorable geographic mix.

Income from continuing operations in the fourth quarter of 2010 was $220 million, or $0.50 per share, compared with $268 million, or $0.62 per share, in the year-ago quarter. Adjusted income from continuing operations was $259 million, or $0.59 per share, compared with $293 million, or $0.68 per share, in the year-ago fourth quarter.