Avon profit falls by 70% in Q2 2012

Global beauty company and direct seller Avon has reported a 70% decrease in profit to $62.7m for the second quarter ended 30 June 2012, down from $208.7m during the same quarter in 2011.

The firm posted net sales of $2.55bn for the current quarter as against $2.82bn in the corresponding quarter of the previous year.

Avon’s gross revenues for the second quarter decreased to $2.6bn, compared to $2.86bn in second quarter of 2011.

Avon’s chief executive officer Sheri McCoy said the the firm’s second-quarter financial results were not good and they reflected the complex challenges that the company faces.

"We will also put the consumer and Representative back at the center of our business and ensure our associates are engaged and aligned. It will take time, but I am confident that we can turn the business around and reach a point of sustainable growth," said McCoy.

Second-quarter revenue fell by 19% and 7% for Brazil and Mexico respectively , while in Venezuela it grew by 26%.

Avon’s revenue from the core US business (which excludes Silpada) was down 4%, owing to a decline in Active Representatives, but salvaged by growth in average order.

Avon Products is a US-based, personal care manufacturer and seller company, which operates in more than 140 countries across the world.

The firm’s portfolio includes product ranges, such as fragrances, skin care, makeup, color compacts and personal care.