Avon to take 'critical' look at dividends in 2016
(Reuters) - Avon Products Inc (AVP.N: Quote), a direct seller of cosmetics, said it would look at dividend payments with a "more critical lens" in 2016, as it expects a bigger impact from the strong dollar.
Shares of the company, which reported a bigger-than-expected third-quarter loss, tumbled as much as 17.6 percent to a low of $3.55 on Wednesday.
Avon has been paying a quarterly dividend of 6 cents per share for over three years, after slashing it by 74 percent in 2012.
The company has been struggling to reverse a decline in sales for nearly 4 years, as it loses representatives – the so-called "Avon Ladies" – in the United States and grapples with weak demand in Brazil.
Avon said recruitment of representatives who sell its products directly to customers fell 1 percent in the three months ended Sept. 30.
The Wall Street Journal had reported that Avon is exploring selling a stake to private equity firms as well as selling off its North America business.
Third-quarter revenue fell 22 percent to $1.67 billion. Excluding the impact of the dollar, sales declined 2 percent.
The net loss attributable to the company was $697 million, or $1.58 per share. The company had reported a profit of $91.4 million, or 21 cents per share, a year earlier.
Avon's shares were trading at $3.71 on the New York Stock Exchange on Wednesday. Continued...