Zacks Investment Research | May 01, 2019 09:45PM ET
Avon Products Inc’s (NYSE:AVP) earnings beat estimates and improved year over year in first-quarter 2019, driven by improvement in adjusted operating margin and continued progress on the “Open Up Avon” strategy. However, the top line missed estimates and declined year over year mainly due to impacts of adverse currency and soft Representatives growth across segments. We note that Active and Ending Representatives declined 9% and 10%, respectively, which impacted the top line.
A clear reflection of this Zacks Rank #5 (Strong Sell) company’s soft top-line performance was visible in a 1.6% decline in its share price during the pre-market trading.
However, the stock has surged 40% in the past year, outperforming the industry ’s growth of 13.9%. This is mainly attributed to the smooth progress on its “Open Up Avon” strategy.
Avon’s adjusted earnings of 3 cents per share surpassed the Zacks Consensus Estimate of loss of a penny. In the year-ago quarter, it recorded loss per share of 2 cents. On a GAAP basis, the company incurred loss of 9 cents per share compared with loss of 6 cents registered in the year-ago quarter. Notably, currency headwinds hurt adjusted earnings per share by 3 cents.
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