How Much Will Avon’s Revenue Grow in the Next 2 Years?
Avon (NYSE: AVP), is a globally recognized leader in direct selling of beauty and related products. During the latest quarter, its top line marginally increased to $1.4 billion, up by 1% on a y-o-y basis in Q3, as compared to the same period last year, due to recent growth initiatives taken by the Company. Its top line remained under pressure as the company continued to operate in challenging macro and competitive conditions, particularly in the largest markets. With the recent inductions made in Avon’s top management, the company is positive that injecting new talent and capabilities into the business will steer Avon toward the path of growth. The company is focused to generate efficiencies with a focus on execution capabilities by strategically redirecting investments to support underlying growth initiatives.
Going forward, we are projecting revenues for all the 3 segments of the Company to grow as the company is working on developing their long-term strategic plan for sustainable growth. The company remains on track with the Transformation Plan that targets achieving cost savings of $65 million in 2018, of which $44 million was reached in the third quarter. They also completed the early redemption of their 2019 bonds to reduce their debt and further strengthen their balance sheet. We are therefore anticipating the company’s revenue to grow at a compound annual growth rate (CAGR) of 2.7%. We have built an explanatory dashboard for Avon’s Growth in the Next 2 Years to outline major drivers of revenue over the next two years.
Estimating Avon’s Revenue Growth
- How Coty Benefits From Recent Divestment & Deleveraging Plans
- Synergies From The Avon-Natura Merger Could Unlock More Than $1 Billion In Value For Shareholders
- What Does The Avon-Natura Merger Deal Mean For Investors In Avon?
- A Closer Look At Avon’s Global Operations, And What’s In It For Natura
- Key Takeaways from Avon’s Q4 Earnings
- Will Representatives Growth Drive Avon’s Q4 Earnings?
Total revenue for Avon is comprised of the Beauty Segment, Fashion Segment, and Home Segment.
These segments are expected to continue to drive future revenue and profitability growth for the company, in line with the guidance provided by the company, where the Beauty segment will continue to be the major contributor to its top line growth. The company is focused on improving performance in the Fashion and Home segment, improving the customer experience in stores and online, and improving assortments in compelling new product launches.
Avon is expecting that it would be able to grow its top line in the remainder of fiscal 2018 by executing significant operational improvements, despite continued competitive pressures. The company also plans on continuing to realize cost savings to improve financial resilience and to be able to invest in its growth. Its long term financial goal is mid-single digit constant dollar revenue growth and low double-digit adjusted operating margin. The Company is more than ever focused on execution, ongoing improvements in top-line growth, and continuing actions to expand margins and accelerating their strengths to create more value for their consumers, customers, colleagues, and shareholders. All these factors, coupled with strong sales momentum, will enable Avon to continue to grow its top line.
Our detailed estimates have been highlighted in our dashboard above. You can make changes to our assumed figures to arrive at your own revenue and growth estimates for the company.
What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
Like our charts? Explore example interactive dashboards and create your own.