Avon Products Shares Jumped: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of beauty products purveyor Avon Products (NYS: AVP) are getting a glamorous makeover today, up by as much as 11%, after the company announced that it was splitting the CEO and chairman roles.

So what: Andrea Jung currently occupies both roles, but she will step down as CEO and remain chairman as the company begins an external search for a new CEO. Jung, who also serves on Apple's (NAS: AAPL) board, has run the company since 1999, and believes "a new CEO will provide a fresh lens and additional operational and executive leadership."

Now what: Investors and analysts alike are cheering the move, which is generally a best practice for corporate governance. Caris & Co. and BMO Capital both upgraded the shares to "above average" and "outperform," respectively. The company has been under pressure as revenue growth has slowed and the SEC has been investigating possible violations of the Foreign Corrupt Practices Act. Stepping aside to pave the way for new leadership is the right move under such conditions.

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