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Why Avon Products Stock Gained 13.5% in January

By Demitri Kalogeropoulos - Feb 7, 2018 at 10:40AM

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Investors tiptoed back into the struggling cosmetic specialist's stock ahead of its holiday season quarterly report.

What happened

Cosmetics specialist Avon Products (AVP) beat the market last month, rising nearly 14% compared to a 6% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

AVP Chart

AVP data by YCharts.

The increase erased just a small portion of shareholders' recent losses, though, and the stock remains down by more than 70% since early 2015.

So what

January's stock price uptick followed a brutal 2017 during which Avon's shares fell by 57%. Thus, investors were likely just tiptoeing back from the pessimistic reading on the business that that plunge implies.

A woman applies makeup.

Image source: Getty Images.

The company's most recent operating update wasn't encouraging, with sales and profits forecast to come in short of management's prior outlook over the key holiday selling period.

Now what

Avon just appointed a new CEO, Jan Zijderveld, who most recently served as an executive at consumer products giant Unilever. He is taking over for Sheri McCoy after her turnaround plan failed to spark consistent growth over the past two years. Avon shareholders will likely hear details about Zijderveld's strategic priorities when the company announces its fourth-quarter earnings results on Thursday, Feb. 15.

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