Avon results point to continued challenges in Latin America
The company has been undergoing significant restructuring in recent years, which has helped it to shed a lot of costs and stem the losses, but the measures have failed to prevent the continued slide in sales.
Last week the company reported that group sales came in $5.57 billion for 2018, a figure that was down 2% compared to $5.71 billion in 2017. Net loss was similar to last year, coming in at $21.8 million, compared to $20.0 million in 2017.
How the company faired in Latin America
Avon’s Latin American market represented it largest slice of the group’s revenues, and is sub divided into the South Latin America and North Latin America regions.
By far the biggest market in the South Latin America region is Brazil, while in the North Latin American region its performance is pinned to the Mexico market.
On a reported basis the South Latin American market revenues were down 3% on a reported bases to $2.15 billion, but down 1$% on a like-for-like basis.
The North Latin American results looked better, with reported revenues level compared to 2017 at $809.3 million, which represented a slight fall of 1% on a like-for-like basis.
The all-important Brazil market
Avon executives have acknowledged that the company’s 2018 sales were impacted in the Brazil market by the national truck drivers’ strike, which did cause significant disruption to its deliveries during the second quarter of the year.
But with the economic outlook for the country looking stronger following the appointment of a new government at the start of the year, the company’s executives believe that its own cost cutting and the increased economic stability should see it better placed in the country during 2019.
Last month the company underlined its commitment to the Brazil market with the announcement that it was starting a two-day delivery service, initially for customers in the Sao Paulo metropolitan area.
The service is being provided in partnership with digital delivery provider Rappi, and it if proves successful it is expected to be rolled out to other parts of Brazil, as well as different Latin American countries, including Colombia.
