Avon (AVP) Continues to Lose Momentum, Hits 52-Week Low - Analyst Blog
Shares of Avon Products Inc. AVP reached a new 52-week low of $6.23 yesterday, before closing trade a notch higher at $6.26, plunging roughly 31.7% year-to-date. The company’s momentum has gradually softened due to continuous loss of active representatives, declining volume, unfavorable foreign currency translations and reduced margins in mature markets like North America.
The company’s performance faltered again in first-quarter 2015 as both top and bottom lines fell year over year. The company expects sales for 2015 to bear a significant impact from ongoing foreign currency translations. These factors, coupled with a Zacks Rank #4 (Sell) further confirms weakness in Avon.
Additionally, the estimates for Avon have been displaying a downtrend due to the aforementioned reasons. It seems that analysts have become less constructive on the stock's future performance. This is evident from the Zacks Consensus Estimate for 2015 that tumbled to 31 cents from 34 cents over the past 30 days. For 2016, the Zacks Consensus Estimate slid to 57 cents from 58 cents over the same time frame.
Moreover, over the past few years, Avon has witnessed a declining revenue trend in North America, especially in the U.S., mainly due to a decrease in active representatives, partly offset by large average order. The company’s management is concerned about the decline and has been constantly striving to stabilize the situation.
This global beauty company has been persistently working on its long-term target of reducing costs but to what extent these initiatives will boost its performance remains a question.
Stocks that Warrant a Look
Some better-ranked stocks in the same industry include Helen of Troy Limited HELE, Coty Inc. COTY and Inter Parfums Inc. IPAR. While Helen of Troy and Inter Parfums sport a Zacks Rank #1 (Strong Buy), Coty carries a Zacks Rank #2 (Buy).
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AVON PRODS INC (AVP): Free Stock Analysis Report
INTER PARFUMS (IPAR): Free Stock Analysis Report
COTY INC-A (COTY): Free Stock Analysis Report
HELEN OF TROY (HELE): Free Stock Analysis Report
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