The Gory Details on Avon Products' Double Miss

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Avon Products (NYSE: AVP) reported earnings on Aug. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Avon Products missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share dropped significantly.

Margins shrank across the board.

Revenue details
Avon Products booked revenue of $2.59 billion. The 12 analysts polled by S&P Capital IQ predicted revenue of $2.68 billion on the same basis. GAAP reported sales were 9.3% lower than the prior-year quarter's $2.86 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.20. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.21 per share. GAAP EPS of $0.14 for Q2 were 70% lower than the prior-year quarter's $0.46 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 62.8%, 170 basis points worse than the prior-year quarter. Operating margin was 4.9%, 660 basis points worse than the prior-year quarter. Net margin was 2.4%, 480 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.65 billion. On the bottom line, the average EPS estimate is $0.25.

Next year's average estimate for revenue is $10.94 billion. The average EPS estimate is $0.93.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 372 members out of 428 rating the stock outperform, and 56 members rating it underperform. Among 108 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 88 give Avon Products a green thumbs-up, and 20 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Avon Products is hold, with an average price target of $19.52.

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