On the Call: Avon CEO Jung discusses skin care

By The Associated Press

Avon Products Inc. reported Thursday that second quarter net income rose, as sales of beauty products grew across all categories. Fragrance rose 16 percent, makeup grew 12 percent, skin care grew 4 percent and personal care grew 3 percent.

Avon's skin-care products such as Skin-So-Soft, Solutions and Anew lotions have traditionally be strong sellers. Here an analyst asks why sales growth is less than other categories this quarter.

QUESTION: My question has to do with the skin-care business which over the last few years has been such a big driver of your growth. Yet for two quarters in a row, it's been really soft and slower growth than either fragrances and color. I'm wondering if that's just timing of new products or what because I assume if that business starts to grow again, given how high margin some of those products are, that would be really good."

RESPONSE: It's primarily weakness in our Solutions brand, which is a mid-tier brand which we are restaging. We still have good srength in Anew, and it's a little bit of timing there. But we feel really good about Anew and its performance in the full year. And so the weakness you saw in the last two quarters is from the mid-tier Solutions brand.