• February 3, 2009

Turns out that the old adage about lipstick being a brisk seller in hard times is not always true. Avon says that while net earnings for the fourth quarter of its fiscal year gained 80% on restructuring, total revenues fell 9% to $2.8 billion.

The company, which cut its ad spending 7% in the quarter to $100 million, says beauty sales in the fourth quarter fell 7%, while fragrance and skin care products grew.

"After nine months of strong sales performance, the significant negative impact of foreign exchange and the depressed economy hurt our fourth-quarter revenue performance," the company says in its release. "It is prudent to assume these pressures will continue for the foreseeable future, and we therefore anticipate that 2009 will be a challenging year. While we cannot control movements in foreign currency, our focus will be on building and managing our business for the long term."

Avon, one of the few companies that actually benefits from rising unemployment as it attracts new reps, also boosted its dividend.--Sarah Mahoney