Avon Products, Inc. (NYSE:AVP) crashed by 5.77% in its third consecutive down session though it managed to recover a bit in the latter hours. The volume spiked to 28 million, more than double the daily average of 12 million. The selloff came on the back of the weak first quarter results of the cosmetics company.
Avon Products, Inc. (NYSE:AVP) reported revenue of $1.8 billion, down by 18% on a y-o-y basis but the company blames that on the forex fluctuation as the constant currency revenue actually shows an increase of 1%. The adjusted earnings per share of the company collapsed to $0.04, a huge decline of 67% over a y-o-y basis. The GAAP bottom line rising by 13% couldn’t cover the loss of $0.33 per share. The revenue of $1.80 billion came short of the expected revenue of $1.83 billion and the EPS of $0.04 fell a long way short from the expected figure of $0.07.
The crisis from the currency headwinds may not be over for the company as the full year guidance suggests. The revenue is expected by the company to fall by 17% from the 2014 figure, producing full year revenue of roughly $7.4 billion, much weaker than the street’s expectation of $7.77 billion for 2015.
The currency headwind pushed the Latin American revenue down by 22% but in constant dollars, it was actually up by 3%. Same thing was seen in the case of Europe, Middle East and Africa. Only North America produced constant dollar decline with a loss of 17%.
The charts suggest that the problems for the company may be far from over as the sideways phase for the last few months looks like just a pause in the downtrend, which shows no sign of reversal yet. The increased volume hints at continued distribution in the range.