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Avon Reports 1% Revenue Gain Q4 2010
Posted: February 8, 2011
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Fourth-quarter revenue in North America was up 1%, or flat in constant dollars. The acquisition of Silpada Designs Inc. ("Silpada") had a favorable impact on fourth-quarter revenue of approximately 11 percentage points. Adjusted operating profit was up 59%, with an adjusted operating margin of 10.8%, up 390 basis points as gross margin improvements and lower advertising helped to offset the impact of lower sales.
In Central and Eastern Europe, fourth-quarter revenue declined 6% year over year, or down 1% in constant dollars. Russia was down 3% on a reported basis and up 1% in constant dollars. Western Europe, Middle East and Africa's fourth-quarter revenue increased 9% versus the prior-year quarter or up 13% in constant dollars. The increase was driven, in part, by growth of Liz Earle Beauty Co. Limited ("Liz Earle"), which contributed approximately 3 percentage points to revenue growth.
Asia-Pacific's fourth-quarter revenue increased 8% year over year or up 1% in constant dollars. The Philippines was up 15% on a reported basis and up 7% in constant dollars. Avon Japan is now excluded from Asia Pacific and is reported as discontinued operations. Fourth-quarter revenue in China decreased 45% year over year, or down 47% in constant dollars. The region's revenues continued to be impacted by the company's planned transition away from a hybrid model to one which focuses on direct selling. Units sold decreased 44%. Despite the lower revenues, China reported operating profit of $4 million compared with a $3 million loss in last year's fourth quarter.
The full report is available on Avon's investor page.