Avon Raises First Quarter Earnings Expectation to $.59 Per Share-Up 40%
March 25 2004 - 6:00AM
PR Newswire (US)
Avon Raises First Quarter Earnings Expectation to $.59 Per Share-Up
40% First Quarter Sales Growth Tracking to Record 19%; Local
Currency Sales Growth Accelerating to 13% NEW YORK, March 25
/PRNewswire-FirstCall/ -- Avon Products, Inc. today raised its
earnings outlook for the first quarter and full year 2004. Avon
said it expects earnings in the first quarter of 2004 to be $.59
per share, versus $.42 per share in the first quarter of 2003, due
primarily to exceptional strength in operations. Given this strong
performance, Avon increased its outlook for full-year 2004 earnings
per share to a range of $3.18-$3.20, 14-15% above 2003 earnings per
share of $2.78 and ahead of its previously stated forecast of
10-12% growth in earnings in 2004. Sales in the first quarter are
tracking to a 19% increase, driven by a record 22% growth in
Beauty. Sales growth excluding the impact of foreign currency is
expected to accelerate to 13% from 9% growth in 2003's fourth
quarter. Units should increase 10% due in part to a strong volume
recovery in the company's Brazilian operation. Operating profit
should expand at least 35%, and the company's operating margin
should increase by at least 150 basis points in the first quarter.
The improved earnings per share outlook reflects strong operational
performance across every geographic region, with exceptional
strength in Latin America and Europe. In addition, the quarter's
results will benefit from lower net interest expense, more
favorable foreign currency exchange rates and a more favorable tax
rate than earlier anticipated. Commenting on the outlook, Andrea
Jung, Avon's chairman and chief executive officer, said, "We're
very pleased to start off the year with such a strong quarter. On
the strength of our worldwide operations, sales growth this quarter
is shaping up to be the highest in Avon's recent history. The
broad-based nature of our projected first quarter performance
supports our confidence that we can meet our newly raised earnings
per share target for 2004." First Quarter Outlook by Region Avon
said that the U.S., its largest market, is projected to resume
healthy sales growth of approximately 7% in the first quarter. As
planned, U.S. operating profit should be somewhat below the
prior-year level due to inventory clearance activity in the
quarter. In Latin America, sales in the quarter are tracking ahead
of earlier expectations with growth above 20% in dollars and in the
mid-to-high-teens in local currency. Brazil's unit volume is
projected to increase double digits following adjustments to its
merchandising mix implemented in late 2003. The region's operating
profit growth is expected to increase at least 30%. In Europe,
first quarter sales should exceed earlier forecasts with dollar
sales growth over 30% and local currency sales growth in the range
of 20%. Operating profit is expected to increase over 60%. Europe's
growth continues to be driven by Central and Eastern Europe as well
as by strong double-digit sales growth in the U.K. due in part to
its very successful launch of the company's blockbuster Anew
Clinical anti-aging treatment. The Asia region is performing as
expected with projected sales growth in the high teens in dollars
and double digits excluding the effect of foreign currency.
Operating profit is projected to rise in the range of 25% including
benefits from Business Transformation initiatives. Avon management
will review its business and strategies at the Merrill Lynch
Retailing Leaders, Household Products and Cosmetics Conference
today at 10:30 a.m. New York time. The conference will be webcast
live, and instructions for accessing the webcast can be found on
the Avon Investor website, http://www.avoninvestor.com/. The
company expects to reportfinancial results for the first quarter on
Friday, April 30, 2004. Avon is the world's leading direct seller
of beauty and related products, with $6.8 billion in annual
revenues. Avon markets to women around the world through 4.4
million independent sales Representatives. Avon product lines
include such recognizable brand names as Avon Color, Anew,
Skin-So-Soft, Avon Solutions, Advance Techniques Hair Care, Avon
Naturals, Mark, and Avon Wellness. Avon also markets an extensive
line of fashion jewelry and apparel. More information about Avon
and its products can be found on the company's web site
http://www.avoncompany.com/. Cautionary Statement under the Private
Securities Litigation Reform Act of 1995 Statements in this release
that are not historical facts or information are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are based on
management's reasonable currentassumptions and expectations. Such
forward- looking statements involve risks, uncertainties and other
factors, which may cause the actual results, levels of activity,
performance or achievement of Avon Products, Inc. ("Avon" or the
"Company") to be materially different from any future results
expressed or implied by such forward-looking statements, and there
can be no assurance that actual results will not differ materially
from management's expectations. Such factors include, among others,
the following: general economic and business conditions in the
Company's markets, including social, economic and political
uncertainties in Latin America, Asia and Central and Eastern
Europe; the Company's ability to implement its business strategies
and its Business Transformation initiatives, including the
integration of similar activities across markets to achieve
efficiencies; the Company's ability to achieve anticipated cost
savings and its profitability and growth targets; the impact of
substantial currency fluctuations on the results of the Company's
foreign operations and the cost of sourcing foreign products and
the success of the Company's foreign currency hedging and risk
management strategies; the Company's ability to implement its
informationsystems initiatives; the impact of possible pension
funding obligations and increased pension expense on the Company's
cash flow and results of operations; the effect of legal,
regulatory and tax proceedings, as well as restrictions imposed on
the Company, its operations or its Representatives by foreign
governments; the Company's ability to successfully identify new
business opportunities; the Company's access to financing; and the
Company's ability to attract and retain key executives. Additional
information identifying such factors is contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 2003,
filed with the SEC. The Company undertakes no obligation to update
any such forward-looking statements. DATASOURCE: Avon Products,
Inc. CONTACT: Media, Victor Beaudet, +1-212-282-5344, or Investor,
Renee Johansen, or Rob Foresti, +1-212-282-5320, all of Avon
Products, Inc. Web site: http://www.avon.com/
http://www.avoninvestor.com/ http://www.avoncompany.com/ Company
News On-Call: http://www.prnewswire.com/comp/079575.html
Copyright
Avon Products (NYSE:AVP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Avon Products (NYSE:AVP)
Historical Stock Chart
From Jul 2023 to Jul 2024