Independent stock research firm Zacks has published an report about Avon Products with the heading: Avon Products Plummets 30% in a Month: Is More Pain Ahead?
Zack’s conclusion: It would be advisable to stay away from the stock unless the success of its Transformation Plan starts to reflect in the company’s performance.
Business For Home confidential talks with Avon Top leaders confirm the main problem of Avon: an out-dated compensation plan and support structure, distributors switch to other opportunities.
Some high and low lights from the report:
We note that Avon has long been struggling owing to weak Active Representatives growth and adverse currency translations.
Avon has been incurring losses for the last two quarters.
Avon was hurt by decline in both Active Representatives and Ending Representatives across all the segments, barring Ending Representatives growth in North Latin America.
Avon faces intense competition from cosmetics products retailers, in domestic and international markets.
Globally, the company competes with products sold to consumers by other direct-selling and direct-sales companies and through the Internet, and against products sold through the mass market and prestige retail channels.
In such times of struggle, Avon’s Transformation Plan seems to be a ray of hope for the company but it is also failing to spark a