Can Investor Day Turn Avon Products Around?

Companies and Brands

Published: January 21, 2016 12:40 pm

Last Updated: January 13, 2020 2:45 pm

Avon Products Inc. (NYSE: AVP) hosted its 2016 investor day Thursday, and so far it appears investors are liking everything the company has put out. The key point from this investor day was Avon reaffirming its full-year 2015 outlook mentioned in the third-quarter earnings call.

In 2015, Avon made progress against its full-year objectives in line with its previously stated outlook. Including the results of North America, Avon’s full-year 2015 constant-dollar revenue is expected to be flat as compared with the prior year.

As announced in mid-December, Avon intends to separate its North American business. Avon expects full-year 2015 results to include (excluding the results of North America):

Total revenue of roughly $6 billion
Constant dollar revenue growth of 2% (decline of 19% in reported dollars)
Growth in active representatives of 1%

Jim Scully, chief operating officer and chief financial officer, commented:

Our full-year performance is expected to be in-line with our most recent outlook. We will provide full details of our fourth-quarter and full-year 2015 performance at our earnings call on February 11th, which will include the reporting of our North American business as discontinued operations caused by its anticipated separation from Avon.

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So far in 2016, Avon has drastically underperformed the market, with the stock down 40% year to date. Over the past 52 weeks, this number does not get any better, as shares are down 66% in this time.

Shares of Avon were trading up 12% at $2.73 on Thursday, with a consensus analyst price target of $4.65 and a 52-week trading range of $2.21 to $9.47.

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