An Avon Products Inc. sales representative holds beauty products during an Avon Magic Bus recruiting event in the Bronx borough of New York, U.S., on Tuesday, Oct. 8, 2013. Beauty and personal-care sales and earnings are expected to exceed those of household products in 2013 with recovering mass-beauty companies like Avon positioned at the top end of 2013 consensus earnings expectations. Photographer: Ron Antonelli/Bloomberg via Getty ImagesPhotograph by Ron Antonelli — Bloomberg via Getty Images
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Avon Products (AVP) reported a bigger-than-expected drop in quarterly sales as demand for its cosmetics declined further in Latin America, its biggest market.
The company’s sales in Latin America fell 26% to $779.2 million in the fourth quarter, hurt by a slump in demand from Brazil.
Latin America accounts for nearly half of Avon’s total revenue.
The company, whose sales have been falling for four years, is selling most of its struggling North America business to top investor Cerberus Capital Management as it focuses on better performing markets such as Latin America.
Avon also outlined plans in January to turn its business around, including cost cuts of $350 million in the next three years, investment in technology and better use of social media.
The net loss attributable to Avon widened to $333.4 million, or 76 cents per share, in the quarter ended Dec. 31 from $330.7 million, or 75 cents per share, a year earlier.
Total revenue fell 20.2 percent to $1.61 billion.
Analysts on average had expected sales to fall 9.4% to $1.82 billion, according to Thomson Reuters I/B/E/S.
Avon reported a loss of $14.8 million, or 4 cents per share, from continuing operations.