Avon Products 2Q Net Doubles On 2009 Charges; Sales Up

   DOW JONES NEWSWIRES 

Avon Products Inc.'s (AVP) second-quarter earnings doubled on prior-year restructuring costs while sales and margins rose solidly.

Profit missed analysts' expectations.

The direct beauty products seller recently announced plans to buy closely held sterling-silver jewelry seller Silpada Designs Inc. for $650 million. Avon has seen slower sales in North America and the purchase of Silpada, which has a party-selling model, would provide a contrast to its person-to-person sales model.

Avon posted a profit of $167.6 million, or 39 cents a share, up from $82.9 million, or 19 cents a share, a year earlier. Excluding restructuring costs, profit rose to 41 cents from 38 cents a share as revenue increased 8.1% to $2.68 billion.

Analysts surveyed by Thomson Reuters had predicted earnings of 45 cents a share on revenue of $2.66 billion.

Gross margin rose to 63.5% from 62.3%, or 2.6 percentage-point growth excluding impacts from Venezuela's devaluation and other charges. Meanwhile, overhead costs rose just 5.1%.

Beauty sales increased 9% during the quarter, with active representatives up 5%. Volume increased 1%.

Total sales in Latin in America jumped 15% on a constant-currency basis while sales in North America declined 7% on a 4% drop in active representatives. Sales from China, where the company has made changed to how it operates, decreased 32% on a 46% plunge in volume.

Shares closed Wednesday at $29.53 and were inactive premarket.

-By Yogita Patel and Kevin Kingsbury, Dow Jones Newswires; 212-416-2262; [e-mail]