OpTree

In news that we have been anticipating, Avon’s First-Quarter Beauty Sales Grew 17%; Active Representatives Increased 14%.

The company reported today that first-quarter 2008 total revenue grew 14% year over year (6% in local currency) to $2.5 billion. Sales of Beauty products rose 17%. Active Representatives increased 14%. Units sold were up 3% versus the prior-year quarter.

The company’s 17% growth in Beauty sales included increases in all categories: Fragrance grew 20%, Color was up 15%, Personal Care rose 15% and Skin Care increased 13%.

This is really great news for both Avon and for the sector as a whole. We reported that USANA had some hiccups in the first quarter but companies like Avon, Nu Skin and Herbalife were also bell-weather stocks for the industry and this is very positive news.

Andrea Jung, chairman and CEO, commented, “Again this quarter we produced solid results on the momentum of our turnaround plan and the strength of our well-balanced geographic portfolio. Active Representative growth accelerated to one of the highest growth levels in many years, 14%.”

Some other highlights:

Latin America’s first-quarter revenue rose 32% year over year (19% in local currency)

Brazil’s revenue increased nearly 60%, and the markets of Colombia and Venezuela each posted revenue growth of over 20%.

Revenue in China grew 29%

The only negative was the decline in sales in North America (6%) over the period of the previous year. The company attributed the loss to the weakening economy and “service-related problems in filling Representatives’ orders.” - We were a bit curious about this one because we hadn’t heard of such problems but seemed a bit odd. The company did offer guidance that they expect the second quarter to be healthier.

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