The Japanese giant Avon and Ruxin's second-quarter profit both fell

According to the latest financial report data, Avon and Razor's second-quarter profits have dropped sharply. Among them, Avon's profits fell by 54%, due to its ongoing company restructuring plan, and if new, it dropped by 38%, due to the decline in overall sales.

Avon’s profit performance was lower than Wall Street’s expectations. On Monday, its share price on the New York Stock Exchange fell by 11%.

Recently, in order to increase revenue, Avon has taken various measures, including reducing the number of jobs, while increasing advertising in order to re-attract low-income consumers, these consumers either reduce the purchase behavior or turn to other beauty brands. Advertising spending increased by 78% to 50 million US dollars. However, these efforts of Avon have not achieved good results in many regions around the world.

In the second quarter, Avon’s profit was US$15,090 million, a decrease of 54 percentage points from the US$3.286 billion of the same period last year. However, its sales have increased, exceeding 2 billion U.S. dollars. However, analysts still expressed concern about their weak performance in some regions.

At the same time, in North America, Avon’s sales growth was flat, and the number of active direct sales representatives decreased by 7 percentage points. Avon said that because of rising oil prices, the direct sales representative’s purchases have decreased compared to the past. In China, there is an 8% increase in sales. The region with the strongest growth in Latin America has a 17% increase.

The main reason for Avon’s profit decline is that the company is implementing a restructuring plan aimed at boosting sales. So far, Avon has shrunk its management position by more than 25% and resigned 4,300 staff members. The layoffs will save Avon nearly $200 million in annual expenses, and Avon expects to save $300 million in costs each year through the entire restructuring plan.

For example, the new company said that its sales in Greater China and North Asia have also decreased.

Its second-quarter profit was 14.1 million US dollars, down 38 percentage points from the 22.8 million US dollars in the same period last year. Its overall sales fell by 8 percentage points to a level of 28,741 million U.S. dollars.

For example, the new company attributes the decline in sales to the new supervision of direct sales in China, but it also expects that the downward trend will soon be reversed because the company has obtained direct sales licenses. As expected, its annual sales will be around US$1 billion.