Beauty and related products maker Avon Products, Inc. (AVP: Quote) Tuesday reported a sharply wider loss for its fourth quarter, reflecting lower revenues as well as a write down due to 'weaker-than-expected' performance of its Silpada jewelry business.
Sheri McCoy, chief executive officer stated, "2012 was a challenging year for Avon, but I'm encouraged to see that the overall business is showing early signs of stabilization. We have a lot of work ahead of us, but I am confident that in 2013, we will see progress against our three-year financial goals."
In the fourth quarter, net loss attributable to the company widened to $162.2 million or $0.37 per share from $0.4 million or breakeven per share in the previous year.
During the quarter, the company recorded non-cash impairment charge of $0.31 per share related to goodwill and intangible assets of the company's Silpada business. Avon also recorded costs to implement or CTI restructuring charges of $0.09 per share, mainly related to its previously announced cost savings initiative.
The fourth-quarter results benefited from $0.03 per share associated with excess cost of acquiring U.S. dollars in Venezuela at regulated market rate as compared to the official exchange rate. The firm also recorded an additional provision for income taxes of $0.39 per share in the quarter.
On an adjusted basis, excluding items such as write-down for Silpada business, earnings from continuing operations were $0.37 per share for the recent quarter compared to $0.39 per share last year.
On average, 15 analysts polled by Thomson Reuters expected earnings per share of $0.27 for the quarter. Analysts' estimates typically exclude one-time items.
Non-GAAP operating margin was 9.2 percent, down 20 basis points from the prior year.
Total revenues for the quarter slid 1 percent to $3.0 billion. Meanwhile, revenues were up 1 percent at constant dollars. Analysts estimated revenues of $3.0 billion for the quarter.
Avon Beauty sales declined 2 percent from a year ago. Sales from Fragrance was flat, while color and personal care both declined 1 percent from the preceding year. Revenues from skincare were down 5 percent.
Total units grew 2 percent, while price/mix decreased 1 percent during the period.
AVP closed Monday's regular trading at $17.28 on the NYSE. In the pre-market activity, the shares are up 8.51 percent.
by RTT Staff Writer
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