26 January 2008

Avon Shares Fall on Downgrade

"Shares of Avon Products Inc. fell on Wednesday after an analyst said the direct seller of beauty products could suffer if the global economy weakens, because of its significant international presence.

Buckingham Research Group analyst Alice Beebe Longley said in a note on Wednesday the New York-based company is particularly exposed to emerging markets as it derives 60 percent of sales and 70 percent of profit there outside of the U.S.

Furthermore, Longley said Avon might have to take larger inventory obsolescence charges than previously expected, because its product line simplification costs, which were characterized as nonrecurring, might actually recur."



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