Avon Shares Plunged: 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: Avon (NYSE: AVP  ) shares dropped more than 6% in heavy trading, following the company's earnings report.

So What: The company's Q3 earnings were up 7% from last year, but fell short of investors' expectations. Increased spending on advertising and weakness in the skin care and color cosmetics categories and in Brazil, a key market for the beauty products company, were all cited as causes for the disappointing numbers.

Now What: Watch for the company to redouble its efforts in Brazil and to fix the glitches it experienced with the relaunch of some of its color cosmetics products. Also, the company is rumored to be a takeover target of European beauty giant, L'Oreal, so shares may be volatile as that speculation heats up or cools down.

Interested in more info on Avon? Add it to your watchlist by clicking here.

Fool contributor, April Taylor, does not own shares of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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