retail

Avon, Alberto Culver Profit On Reined-In Ad Spend

Avon-Lipstick

Both Avon Products and Alberto-Culver say sales and profits are up, and both companies reined in their marketing spending.

At Avon Products, income from continuing operations jumped 256% to $152.2 million in the first quarter, up from $42.7 million in the same period a year ago. Sales rose 7% to $2.59 billion, from $2.42 billion in the same period last year, or 4% in constant dollars. But total units declined 1%, as did the number of active Avon representatives.

The New York-based company says sales of its beauty products advanced 8%, with gains in each category: Fragrance sales increased 10%, personal care 8%; skincare 7%; and color 6%.

Although the company cut back on advertising -- spending $82 million, down 15% from the same period a year ago and primarily in China -- those gains were offset by greater spending of $30 million on enriching its appeal to would-be reps, including higher incentives.

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"We are pleased with the early progress against our commitment to return the business to mid-single-digit revenue growth," chairman/CEO Andrea Jung says in its release. "We are squarely focused on restoring growth in Brazil and Russia in the second half, and ensuring execution in gross margin improvement and cost control."

Results were similar at Alberto-Culver, based in Melrose Park, Ill. which says sales for its second quarter climbed 6.1% to $408.2 million, compared to $384.8 million in the prior year's second quarter, or 4.3% excluding currency fluctuations. In the U.S., sales gained 1.9%.

And net income for the company, which markets such brands as TRESemme, Alberto VO5, Nexxus, St. Ives, Simple and Noxzema, climbed to $36.5 million from $30.1 million in the same period a year ago.

The company says its advertising and other marketing investments in the second quarter of $68.9 million were flat versus the prior-year second quarter.

Last fall, Unilever announced its plans to acquire Alberto-Culver for $3.7 billion.

 

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