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Avon to miss 4Q estimate
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September 29, 1999: 10:04 a.m. ET
Cosmetics firm says signs of slow holiday sales growth a drag on profit
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NEW YORK (CNNfn) - Shares of Avon Products Inc. fell roughly 24 percent early Wednesday after the makeup vendor warned its fourth-quarter profit is likely to fall short of analysts' forecasts due to early signs of sluggish holiday-season sales growth.
Shares of Avon (AVP) sank 8-11/16 to 27 in early New York Stock Exchange trading. Shortly after 10 a.m. ET, more than two million shares had changed hands.
Avon said it expects to post fourth-quarter income per share in line with or slightly above the 56 cents per share reported a year ago. A poll conducted by First Call Corp., the research firm, showed analysts expect Avon to report earnings of 63 cents a share.
"In the U.S., trends in beauty sales in the fourth quarter are expected to improve significantly over third quarter, but we are seeing weakness in early sales of holiday gifts," Charles Perrin, Avon's CEO and chairman, said. "We now expect U.S. sales to be up low single digits instead of the approximately 5 percent increase we had been anticipating."
Perrin said economic pressure and currency volatility in Latin America will cause Avon to miss its aggressive growth targets in Brazil and Mexico.
Avon said however it expects to meet Wall Street's estimates for 34 cents per share in its third quarter, marking a gain of about 13 percent from a year ago. Perrin said Avon plans to step up its share buyback program this year.
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Avon Products
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