Investors were not pleased with Avon Products Inc.'s (AVP) 2Q results. Avon’s current inept and incompetent management was unable to anticipate potential problems, which resulted in a number of administrative issues negatively impacting results. Sheri McCoy announced she is finally leaving Avon in March 2018, and the board is looking for a replacement from outside of the company. With the number of representatives and revenue declining despite an increase in advertising, the new CEO may need to create a completely different business model that stresses e-commerce more with less emphasis on its old army of sales representatives. The current outlook for AVP shareholders is bleak.
Second Quarter
Avon reported 2Q results last week that killed the stock. Revenue dropped 3%. It had a loss of $0.12 per share, which includes a $0.2 positive impact for foreign currency adjustments. This compares to a profit of $0.07 in same quarter last year, and the quarterly loss was also worse than the loss of $0.09 in the 1Q of this year. Operating profit dropped to just $60.3 million from $102.9 last year. The number of reps declined another 3% in the quarter after falling 3% in 1Q and falling 2% in 2016. This is the fourth quarter in a row that results greatly disappointed investors with a subsequent sharp drop in AVP stock price.
