Print
Email
Avon Products Inc. (AVP) filed Quarterly Report for the period ended 2011-03-31.
Avon Products Inc. has a market cap of $12.83 billion; its shares were traded at around $29.38 with a P/E ratio of 16.23 and P/S ratio of 1.18. The dividend yield of Avon Products Inc. stocks is 3.13%. Avon Products Inc. had an annual average earning growth of 3.2% over the past 10 years. GuruFocus rated Avon Products Inc. the business predictability rank of 3-star.
This is the annual revenues and earnings per share of AVP over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of AVP.
Highlight of Business Operations:
During the first quarter of 2011, revenues increased 7%, impacted by favorable foreign exchange. Constant $ revenues increased 4%. Sales of products in the Beauty category increased 8%, partially due to favorable foreign exchange. On a Constant $ basis, sales of products in the Beauty category increased 4% due to a 1% increase in units and 3% increase in net per unit. Active Representatives decreased 1%. See the “Segment Review” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information related to changes in revenue by segment.
Total revenue increased 7% in the first quarter of 2011 with favorable foreign exchange contributing 3 percentage points to the revenue increase. Constant $ revenue increased 4%. Acquisitions of Liz Earle Beauty Co. Limited (“Liz Earle”) and Silpada Designs, Inc. (“Silpada”) contributed approximately 2 points to revenue growth. Active Representatives decreased 1%.
On a category basis, the increase in revenue was primarily driven by an increase of 8% in Beauty sales, with increases in all sub-categories of Beauty. Within the Beauty category, color cosmetics increased 6%, fragrance increased 10%, personal care increased 8% and skincare increased 7%. Fashion sales increased 8% and Home sales increased 4%. On a Constant $ basis, the Beauty category increased 4%. Within the Beauty category, Constant $ sales of color cosmetics increased 2%, fragrance increased 6%, personal care increased 5% and skincare increased 4%. Skincare Constant $ growth rates benefited by 4 points from the Liz Earle acquisition. Constant $ sales of Fashion increased 5%, with the acquisition of Silpada contributing 8 points. Constant $ sales of Home decreased 1%.
Interest expense increased by 4% in the first quarter of 2011, primarily due to higher outstanding debt balances, partially offset by lower interest rates. At March 31, 2011, we held interest-rate swap agreements that effectively converted approximately 74% of our outstanding long-term, fixed-rate borrowings to a variable interest rate based on LIBOR.
The effective tax rate for the first quarter of 2011 was 32.3%, compared to 66.2% for the first quarter of 2010. The 2010 tax rate was negatively impacted by 32.7 points due to the devaluation of the Venezuelan currency in conjunction with highly inflationary accounting discussed further within the Latin America segment review. Additionally, the 2011 tax rate included higher tax benefits from an audit settlement and statute expiration, offset by a higher tax cost associated with the repatriation of anticipated current year earnings.
At March 31, 2011, we had a net asset position of $163 associated with our operations in Venezuela, which included cash balances of approximately $154, of which approximately $150 was denominated in bolívares remeasured at the March 31, 2011, official exchange rate and approximately $4 was denominated in U.S. dollars. Of the $163 net asset position, approximately $148 was associated with bolívar-denominated monetary net assets and deferred income taxes. Additionally, during the first quarter of 2011 Avon Venezuela’s revenue and operating profit represented approximately 4% and 5% of Avon’s consolidated revenue and Avon’s consolidated operating profit, respectively.
Subscribe RSS
