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What: Shares of Avon Products Inc. (AVP) were looking good Tuesday, gaining after a strong earnings beat in its second-quarter earnings report. By 1:55 p.m. EDT, the stock was up 15.1%.
So what: The struggling cosmetics maker posted an earnings per share of $0.07, even with a year ago and well ahead of the $0.02 Wall Street expected. Revenue matched expectations, falling 8% to $1.43 billion, but increased 5% on a constant-dollar basis and excluding the sale of Liz Earle.
CEO Sheri McCoy said the results were "slightly above our expectations" due to better-than-expected operating expectations. Foreign currency pressure eased up, though the strong dollar still weighed on results, and the company delivered sales growth in local currency in nine out of its 10 markets.
Now what: Avon has been in the midst of a yearslong turnaround, but the company's strategy may be taking hold as the stock has now more than doubled from its low point in January. The company sold its North American business to Cerberus Capital Management in March for $435 million and said it would cut 7% of its workforce and move its headquarters to the U.K.
In January, it announced a three-year transformation plan that includes delivering a $350 cut in annual expenses by the end of the period and $70 million this year. Avon did not provide guidance in the report, but with a growth in constant-currency revenue and a 6.6% increase in operating income, the company may finally be on the right track.
