On Tuesday, April 1, cosmetic and beauty-product direct-seller Avon Products
- The company is seeing positive signs in the middle of a multi-year turnaround; it witnessed "revenue growth in every region," recording a 9.1% increase in sales.
- Higher restructuring accruals, increasing incentive-based compensation payments, and greater retirement-related plan contributions all led to negative cash flows from operations.
- Margins improved across the board, and fewer shares outstanding contributed to a near-tripling of diluted earnings.
- Avon carries a slightly attractive three-star rating in The Motley Fool's CAPS community, as do rivals Alberto-Culver
(NYSE:ACV) and Elizabeth Arden(NASDAQ:RDEN) . Revlon(NYSE:REV) carries the ugliest one-star rating, while consumer product giant Procter & Gamble(NYSE:PG) is sitting pretty with five stars.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|---|
|
Sales |
$2,130 |
$2,185 |
$2,003 |
9.1% |
|
Net Profit |
-- |
$150 |
$56 |
166.9% |
|
EPS |
$0.27 |
$0.34 |
$0.12 |
183.3% |
|
Diluted Shares |
-- |
444 |
453 |
(2.0%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
61.71% |
61.08% |
0.63 |
|
Operating Margin |
10.88% |
4.30% |
6.58 |
|
Net Margin |
6.86% |
2.81% |
4.05 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$1,122 |
$1,158 |
(3.1%) |
|
Accounts Rec. |
$670 |
$596 |
12.4% |
|
Inventory |
$984 |
$860 |
14.4% |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$597 |
$538 |
10.9% |
|
Long-Term Debt |
$1,170 |
$1,254 |
(6.7%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
($160) |
$101 |
N/A |
|
Capital Expenditures |
$26 |
$21 |
20.8% |
|
Free Cash Flow |
($186) |
$80 |
N/A |
Find out why free cash flow is a Fool's best friend.
Related Foolishness:
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.
