Despite the turmoil surrounding multi-level marketing companies, with billionaire Bill Ackman launching an offensive against Herbalife Ltd. (NYSE:HLF), Avon Products, Inc. (NYSE:AVP) saw its stock up 20% after its earnings announcement. Avon investors took the numbers as “stabilizing” and a sign that restructuring might be taking hold for the company, but is it too rich for investors to buy in now? I wouldn’t go that far (read more about the earnings over reaction).
Multi-level marketing companies have been under pressure of late thanks to Ackman’s Herbalife accusations. With Herbalife in the spotlight, new speculation has arisen concerning Nu Skin Enterprises, Inc. (NYSE:NUS). The accusations of Nu Skin Enterprises, Inc. (NYSE:NUS) as a pyramid scheme goes back to the early nineties. However, fellow MLM company Avon has not seen as much pressure as Herbalife and Nu Skin. Both are still down over 8% since Ackman’s attack on Herbalife–Avon, meanwhile, is up over 40%.
Avon managed to report EPS of $0.37 per share versus consensus of $0.27. This is well above the flat earnings per share the company posted for the same quarter a year ago. For its top market, Brazil, revenue rose 10%, but for its fastest growing market, Asia, revenue rose a mere 3%.
Fellow beauty products company Nu Skin has also managed to post solid results for its latest quarter, posting EPS of $0.97, compared to $0.76 for the same quarter last year, and above consensus of $0.96. The company also upped its revenue guidance by $50 million to between $2.3 billion and $2.35 billion.