Update: Avon shares dropped 18% today on poor earnings and word of an SEC investigation.
Our earlier comments:
Andrea Jung, the chief executive of Avon Products (NYSE: AVP) since 1999, has done a terrible job for shareholders over the past several years. The company’s stock is down 35% since October 2009. Avon’s investors have also been insulted by the board of the firm, which has paid Jung over $44 million in the past three years according to its proxy.
During the two-year period that ended in 2010, Avon’s revenue rose modestly to $10.63 billion. But, net income fell 46% to $606 million. In the past quarter, Avon missed Wall St. estimates. It posted EPS of $0.48, against expectations of $0.50. Revenue for the quarter was $2.86 billion, against expectations of $2.88 billion
Morningstar recently commented on Avon’s performance. “Recent missteps, particularly in faster-growing emerging markets, have hindered Avon’s progress, and we don’t believe these challenges will abate over the near term,” an analyst at the research company wrote.
Avon’s shares hit a 52-week low on October 4, according to TheStreet.com.
Douglas A. McIntyre