Beauty products sales show double-digit growth at Avon
01 May '07
3 min read
"We continue to significantly elevate our investment levels against both our brand and our channel," said Jung, "and we are seeing strong paybacks as a result. Fueling these investments are savings from the many restructuring initiatives that we have undertaken and that continue to be an ongoing part of our turnaround program."
First-quarter operating profit of $238 million rose 176%, or $152 million, from the 2006 level. Operating profit in the quarter was unfavorably impacted by approximately $10 million of costs to implement previously announced initiatives under the company's ongoing restructuring program. The 2007 quarter also included approximately $17 million of incremental costs, related to the company's previously announced Product Line Simplification (PLS) program.
In 2006, first-quarter operating profit was unfavorably impacted by approximately $120 million of costs to implement the restructuring program, and approximately $20 million of incremental inventory write-offs primarily related to the company's decision to discontinue the sale of certain heavily discounted excess products. Operating margin was 10.9%, versus 4.3% in the prior-year quarter.
The quarter's effective tax rate of 32.4% rose from 2006's rate of 20.3%. The lower 2006 rate resulted primarily from favorable tax audit settlements, which more than offset the adverse impact of restructuring activity on the effective tax rate.
marketing@alchempro.com
