Avon Posts Lower Q3 Earnings, Slashes Dividend

by Christopher Freeburn | November 1, 2012 12:25 pm

Avon Posts Lower Q3 Earnings, Slashes Dividend

Avon (NYSE:AVP[1]) said on Thursday that it will cut its dividend by almost 74% as part of a cost-trimming effort after reporting lower quarterly revenue and profit[2].

For the third quarter, the cosmetics maker said it earned $31.6 million, down sharply from $164.2 million in the same period last year. Adjusted EPS came in at 17 cents. That fell short of the 22 cents a share that Wall Street was expecting, Reuters noted.

Quarterly Revenue also dropped to $2.55 billion, down from $2.76 billion in 2011.

While the company saw 2% sales growth in Brazil, its sale fell 8% in North America and 31% in China.

The company said it planned to trim expenses by $400 million annually by 2015. Its quarterly dividend will be cut from 23 cents a share, to 6 cents a share.

Company officials indicated that restoring Avon shrinking legions of sales representatives was a top priority.

Last month, former CEO¬†Andrea Jong stepped down from the company’s board of directors[3]. Avon’s new CEO Sherilyn McCoy took the reins in April.

Shares of Avon rose about 1% in Thursday mid-day trading.

Endnotes:
  1. AVP: http://studio-5.financialcontent.com/investplace/quote?Symbol=AVP
  2. reporting lower quarterly revenue and profit: http://money.msn.com/business-news/article.aspx?feed=OBR&date=20121101&id=15741370
  3. stepped down from the company’s board of directors: http://investorplace.com/2012/10/former-ceo-andrea-jung-to-step-down-as-avon-chairman/

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