Cosmetics maker Avon Products (AVP) reported a surprise quarterly loss and a 16% drop in revenue as demand fell further in Brazil and China.
Shares of the pioneer of the direct-selling business model fell more than 4% in premarket trading on Thursday.
Avon is trying to reverse a more than four-year decline in sales by selling non-performing businesses, cutting jobs and making new investments in its supply chain.
In March, Avon sold 80% of its North America business to investor Cerberus Capital for $170 million.
In the first quarter, sales across all its markets fell with South Latin America, its biggest, declining 28%.
Sales in Brazil were hurt by taxes levied on cosmetics beginning 2015, which made Avon’s products more expensive. In China sales were impacted by fewer representatives selling its products, the company said.
Avon’s total revenue fell to $1.31 billion. On a constant dollar basis, revenue rose 2%.
The net loss attributable to the company widened to $165.9 million, or 38 cents per share, in the quarter ended March 31 from $147.3 million, or 33 cents per share, a year earlier.
Excluding items, Avon reported a loss of 7 cents per share.
Analysts on average had expected earnings of 2 cents per share and revenue of $1.29 billion, according to Thomson Reuters I/B/E/S.
