NEW YORK (AP) -- Avon, a direct seller of beauty products including Skin So Soft lotion and mark cosmetics, posted a wider fourth-quarter loss as it marked down the value of its Silpada jewelry business and paid restructuring costs.
The company is slashing costs, hoping to save $400 million in three years, as it tries to turn itself around. It has suffered sales declines, a bribery probe and other problems. Under new CEO Sheri McCoy, it has cut its dividend, laid off workers and is exiting the Vietnamese and South Korean markets.
"2012 was a challenging year for Avon, but I'm encouraged to see that the overall business is showing early signs of stabilization," said McCoy in a statement.
The company's adjusted earnings topped analyst expectations, and shares rose 67 cents, or 3.9 percent, to $17.95 in premarket trading.
The New York company's loss came to $162.2 million in the three months through Dec. 31, or 37 cents per share, compared with a loss of $400,000, or zero per share, in the same quarter the year before.
It took a $209 million charge, before taxes, due to the drop in value of the Silpada business and $58million for restructuring charges. Excluding such items, profit came to 37 cents per share.
Revenue fell 1 percent to $3 billion.
Analysts, on average, expected an adjusted profit of 27 cents per share on $3 billion in revenue, according to FactSet.
Sales of beauty products fell 2 percent, while fragrance sales were flat and color and personal care both declined 1 percent. Sales of skin care products fell 5 percent.
North American revenue tumbled 12 percent to $516.2 million, largely as a result of a drop in the number of representatives who sell Avon's products. In Latin American, the largest market, sales rose 2 percent to $1.33 billion and sales in the region made up of Europe, the Middle East and Africa rose 1 percent to $905.8 million. Asian sales dropped 3 percent to $246.6 million.
For all of 2012, Avon posted a loss of $42.5 million, or 10 cents per share, compared with a profit of $513.6 million, or $1.18 per share, in 2011. Revenue fell 5 percent to $10.7 billion from $11.3 billion.
The company also said Tuesday that it expects to take one-time losses totaling about $100 million in the first half of this year as a result of Venezuela's move to devalue its currency.
Avon shares fell 28 cents to $17 in premarket trading.
- Investment & Company Information