After spinning off its North America business in March, Avon Products Inc. (AVP—NYSE) began to improve its bottom line in the most recent quarter.
The beauty company is implementing a cost-cutting plan introduced in January that will include trimming its staff and supply chain and moving its headquarters to the United Kingdom. After three years, the plan is expected to save Avon $350 million a year before taxes.
In the quarter ended June 30, the company cleared a profit of $33 million, up from $28.8 million a year earlier. Per-share earnings slipped to 6 cents from 7 cents a year ago. On an adjusted basis, earnings were down from 9 cents a share to 7 cents a share. Analysts polled by Thomson Reuters had expected earnings of 2 cents a share.
Revenue fell 8 percent to $1.43 billion, beating the $1.41 billion predicted by analysts.
Earlier this year, the beauty company inked a deal with Cerberus Capital Management LP for majority ownership of Avon’s domestic operations. Cerberus agreed to inject $435 million into the business, which it then took private as New Avon LLC, along with another $170 million investment in Avon Products.
Revenue was down across the company’s remaining segments, hurt by foreign exchange rates. Constant-dollar revenue was up in all segments except Asia Pacific, where the company logged a 5 percent decline.
“Our performance improvements were broad-base with nine of our top 10 markets growing in local currency,” said Sheri McCoy, CEO of Avon Products. “We continue to make steady progress on a number of fronts: improving pricing discipline; driving additional cost out of the business; and continuing to build our brand and enhance the Representative experience,” said Sheri McCoy, CEO of Avon Products.
Following Tuesday’s release, shares in Avon climbed as much as 21 percent to $5.04—the stock’s biggest intraday jump since Feb. 12. Ahead of the report, the shares were up 2.7 percent this year.