Over the past 18 months, CEO Andrea Jung has had to make some tough choices at Avon. After six years of racking up 10%-plus annual revenue growth, the consumer products giant stumbled badly in 2005 as problems cropped up around the globe. Developing markets such as Central Europe that had been key to Avon’s growth hit road blocks, and sales in the U.S. and Mexico stalled. Concluding that Avon needed a true makeover, Jung cut 7 of her 15 levels of management and instituted a more rigorous analytical approach to marketing and other business decisions. Manufacturing and marketing moves once made by country managers are now largely centralized with a more efficient global approach. To offset the cutbacks, Jung has invested heavily in advertising (up 83% in 2006) and improved compensation for some of her direct-sales representatives. The company, which already collects more than 70% of its revenues outside of the U.S., has continued its focus on emerging markets, recruiting 399,000 new salespeople in China in less than a year.
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|Economic Sector||Consumer Staples|