(Reuters) - Avon Products Inc’s quarterly revenue missed analysts’ estimates on Thursday, hurt by a fall in the number of its sales representatives and a dip in demand for products in Latin American markets, sending its shares down as much as 19 percent.
On a post-earnings call, Chief Financial Officer Jamie Wilson said the cosmetics maker saw its largest active representative declines in the United Kingdom, Brazil and Russia during the quarter.
Overall, the number of active sales representatives out selling Avon’s signature cosmetics among friends and relatives and local communities, declined 6 percent in the quarter ended Dec. 31, 2018.
The departures come a few months after the company launched its restructuring plan “Open Up Avon”, to address falling levels of its representatives. The plan aims to expand, recruit and retain more representatives, while also revitalizing its direct-selling model in the world of web shopping.
Meanwhile, weak demand for its color cosmetics in Brazil hit sales in its biggest segment of beauty, causing a 2 percent fall.
By region, revenue in the company’s southern Latin American business - which includes Brazil and Argentina - fell 15 percent to $488.3 million
“Avon continues to be challenged, reflecting share loss and lessening consumer relevance in many markets,” Stifel analyst Mark Astrachan said in a note.
“We believe this requires considerable reinvestment to reverse and continue to find encouraging the company’s plan to reduce costs and reinvest.”
Shares of the company, which reported an adjusted profit in line with analysts’ estimates of 7 cents after excluding a $126 million restructuring charge, were down 53 cents to $2.37.
Total revenue fell 11 percent to $1.40 billion, short of an average analysts’ estimate of $1.43 billion, according to IBES data from Refinitiv.
Avon recorded restructuring costs of approximately $126 million before tax in the quarter, primarily related to its restructuring plan.
Net loss attributable to the company was $77.6 million, or 19 cents per share in the quarter, compared to a profit of $91.5 million, or 17 cents per share, a year earlier.
Reporting by Jaslein Mahil; Editing by Shinjini Ganguli