Business Intelligence on Retailing, Franchising, and Consumerism in China

Avon China Sales Down 30% In Q2 2014

American cosmetics company Avon published its financial report for the second quarter of 2014 and stated the closure of some of its retail stores caused the company's sales in China to decline by 30%.

Meanwhile, the company's global performance was not so optimistic either. During the second quarter of 2014, Avon's operating revenue decreased by 13% to USD2.2 billion; its net profit decreased by 40% from USD31.9 million in the same period of last year to USD19 million; and its earnings per share decreased from USD0.07 to USD0.04.

By department, Avon's beauty department sales saw a year-on-year decrease of 12.6% to USD660 million. Of that total, its skin care product sales decreased by 12.7%, its perfume sales decreased by 13.1%, and its cosmetics sales decreased by 11.8%. Meanwhile, its fashion and home department sales saw a year-on-year decrease of 14.9% to USD580 million.

By region, Avon suffered sales decline in all marketplaces in the second quarter of 2014. Its North American domestic market saw the largest decrease of 20% to USD300 million, followed by the Latin American market with 16% decrease to USD105 million.

The Asia Pacific region realized sales of USD170 million, representing a year-on-year decrease of 13%; and the number of its active sales representatives in this region decreased by 8%. At the same time, due to the large decrease of store numbers, Avon's sales in China declined by 30%. In addition, its sales in Europe, Middle East and Africa decreased by 3% to USD660 million.

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