Beauty-product manufacturer and seller Avon Products (NYSE:AVP) used to have a reputation as a steady grower and prodigious generator of cash. Unfortunately, smudges began to appear in late 2004, snowballing into a four-point turnaround announced in November 2005. How's this faded beauty queen looking now?

Judging by third-quarter results released at the end of October, restructuring efforts have been a mixed bag at best. Overall sales trends may be returning to Avon's heyday of rapid growth, but it will take more than a couple of quarters for investors to become convinced that the company is out of the woods.

For the quarter, total sales advanced 9%, with notable strength from a 10% advance in beauty and a 16% jump in skin-care sales. Latin American sales grew an impressive 25% (in local currency) and China is growing again; Avon is moving toward its direct-sales model, versus a previous store-retail strategy, in the world's most populous country.

Impressive, yes, but there's still work to do. North American sales remain flat year to date, and although China has obvious potential, thanks to a large population that could benefit greatly from a direct-sales approach, it only represents a few percentage points of total sales.

Then there's the bottom line. For the quarter, earnings results came in below analyst expectations. Avon is in the midst of spending $500 million to streamline its manufacturing and product distribution, and to flatten its corporate structure. In other words, anything goes as management works to revive sales in more mature domestic and European markets. It's also working furiously to improve profit margins, but it's having to up advertising spending to reach consumers.

The jury is still out regarding the turnaround plan's effectiveness, but at least the top line seems improved for now. Happily, Avon continues to throw off tons of cash; year to date through September, it had almost as much free cash flow as it reported in net income, leaving plenty of liquidity to repurchase shares and pay a 2.2% dividend yield.

Avon's cash-generating abilities keep investors hovering around the stock, which has oscillated between $25 and $35 since the announced restructuring. Currently, it's trading near a 52-week high of $32.82, on hopes that the company could indeed be coming back to life.

It will take more positive top-line trends and eventual cash flow growth for the stock to break out of its current trading range, which won't be easy. Management must deal with internal issues while playing in the crowded health and beauty space. That means going head to head with industry titans like Procter & Gamble (NYSE:PG), Unilever (NYSE:UL) (NYSE:UN), and other formidable competitors such as Revlon (NYSE:REV), Estee Lauder (NYSE:EL), and Elizabeth Arden (NASDAQ:RDEN), another stock you may want to consider owning.

For related Foolishness:

Unilever is a Motley Fool Income Investor recommendation. Discover our full list of dynamic dividend-paying stocks with a free 30-day trial subscription.

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.