What happened
Avon Products (AVP) stock has trailed the market through the first six months of 2018, shedding 25% compared to a 2% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.
The slump follows a tough 2017 for investors that included a nearly 60% dive in the share price.
So what
This year's decline was sparked by quarterly earnings results in early May that left investors wanting more. The beauty products specialist booked just a 2% sales increase, after accounting for currency swings, as its base of sales representatives shrank. CEO Jan Zijderveld, who only recently stepped into the leadership role, described the results as "unsatisfactory" while promising that management is moving with "deliberate urgency to design our turnaround plan."
Image source: Getty Images.
Now what
Avon is focused on improving the satisfaction level of its sales representatives right now, and investors can judge the success of that initiative by following the size of its sales base over the coming quarters. Yet the stock isn't likely to make a sustained recovery until the company can change its weak global sales trends. We won't know details on how Zijderveld and his team plan to do that until they explain their rebound strategy at some point in the next few months.
