Avon Products Inc., the world's largest direct seller of cosmetics, posted a lower-than-expected quarterly profit Thursday as tight consumer spending led to a drop in North American sales.
The net profit came to $222.6-million (U.S.), or 52 cents a share, compared with $139.1-million, or 32 cents a share, a year earlier.
Excluding a restructuring charge and a one-time tax benefit, Avon earned 45 cents a share, missing analysts' average expectation for a profit of 52 cents a share, according to Reuters Estimates.
Total quarterly sales rose 13 per cent to $2.6-billion. Sales in North America fell 3 per cent, with the "negative consumer environment" there weighing on its results in the market, Avon said.
The company expects trends in North America to worsen in the fourth quarter. Avon noted that it has not seen any measurable impact of the economic and financial crisis outside North America, but was keeping a close eye on those markets.
Avon expects the recent strength in the U.S. dollar to hurt fourth-quarter and full-year growth rates and operating margins.
The company said it continues to expect revenue to grow at an average mid-single-digit rate over the long term.
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