Avon Q3: results disappoints as sales reps dwindle

Avon Q3: results disappoints as sales reps dwindle

Despite its recent recruitment frenzy, Avon is struggling to recruit and retain sales reps, according to its latest set of results. The direct sales companies third quarter disappointed with active reps down 5 percent in the three months ended September 30.

Revenue was flat, dropping 4 percent (like-for-like) to US$1.4 billion (+1 percent adjusted). Gross margin and operating margin both rose, 61.3 percent and 3.8 percent respectively.

“As we said at the recent investor day, it is going to take time for us to execute this turn-around,” said Jan Zijderveld, Avon CEO. “While we are not yet satisfied with the overall quarterly results, I am encouraged by the speed at which initiatives are being adopted in our markets. We are beginning to see benefits from recruiting and training initiatives that have been put in place in countries around the world.”

Zijderveld continued, “At its heart, Avon is the world’s largest social selling company, focused on improving the lives of women.  Rebooting our sales model and returning the 6 million women to the center of everything we do, making it easier for her to succeed with Avon, will ensure our long-term success. While we are still in the beginning stages of our turn-around, we are beginning to see early results of various initiatives.  Through Avon Opportunity Meetings, we are bringing significantly more people in our Asia Pacific region, global training programs are exceeding participation goals and faster launched, on-trend beauty products are being met with strong acceptance in the marketplace. We know that in order to make “Her” successful, we have to move more quickly than we ever have in the past, make it easier for Her to do business and help Her improve Her earnings.”