Avon (NYSE:AVP) reported a revenue drop of 2% to $1.57 billion in which was slowed down due to the scarcities of sales deputies and financial complications. Operating sales delegates tumbled at around 2 percent in its latest earnings results, with reductions in Europe, Middle East Africa and Asia Pacific. Revenue was unsuccessful in reaching its potentials of 1.61 billion dollars.
From a year before, Revenues declined 2% to $1.57 billion, which denotes the 21st orthodox of revenue regressions. The beauty business similarly took a beating of $10.7 million in the last earnings report. Revenue was downcast in all of Avon’s markets, excluding south Latin America in which actually had a rise with a 9% increase. The north Latin America, however, had a revenue drop of 10%, while the European, the Middle Eastern and, African departments specified a fall of 7%.
Avon is reliant on a system of about six million sales assemblies who vends its goods globally, customarily using a door-to-door approach. The business’s sales took a triumph last quarter as a result of the 2% drop in the amount of sales reps selling its merchandise.
Furthermore, Avon by now has begun financing an approximately $350 million project which aims to modernize its structured approach by minimizing the door-to-door or direct approach for sales. $200 million of that total will be complying with the new strategy. The other remaining $150 million will be used for social media expansion, which Avon anticipates will link it with a new set of demographic of customers who do not prefer direct sales or those who see the accustomed model as an outlying discernment.
Chief Executive Officer of Avon Products Inc., Sheri McCoy stated,
Avon's third-quarter results reflect broad-based performance improvements resulting in local currency sales growth across our top markets and significant operating margin expansion versus the prior year. We have also taken actions to significantly improve our balance sheet and have accelerated the pace of our 2016 cost savings initiatives. I am pleased with our progress against the Transformation Plan as we continue to position Avon to deliver sustained long-term profitable growth.
Technical Analysis
Avon Products Inc. had an intense performance last week. As shown above, the stock dramatically dropped on the day it released its earnings report. Avon opened at that day at 4.76 and closed at 5.39 with a high of 5.41 and a low of 4.64. It continued its decline with Friday’s performance, which opened at 4.61 and closed at 4.79 with a high of 4.88 and a low of 4.53.
On a weekly perspective, Avon also dropped after a six week streak of a bullish trend. The stock opened at 4.61 and closed at 5.82 with a low of 4.53 and a high of 6.02.
RSI of the beauty network dropped below 30 with 29.44 indicating that it’s oversold. Meanwhile, coppock curve is also in a negative zone with -7.82 which indicates a strong sell for the stock.