Avon Products Inc. (NYSE:AVP), the cosmetics maker, hired consultant McKinsey & Co. to cut costs in its American operations in the wake of a fourth-quarter loss, Bloomberg reported.
New York-based Avon had a loss of $400,000 in the fourth quarter, down from a profit of $229.5 million in the previous year. Much of the loss stemmed from a charge of $263 million, or 38 cents per share, on its Silpada Designs Inc. division, which it acquired in 2010.
Revenue was down four percent, to $3.04 billion from $3.18 billion in the previous year, with a two percent decrease in total units sold. Analysts had forecast revenue of $3.1 billion.
During the quarter, the company decreased its number of direct sellers by three percent, and Avon is planning more layoffs this year, according to Dow Jones.
The company is also searching for a new CEO to replace Andrea Jung, who said she would step down in December, but will remain chairman.
While 2012 is a year of transition and we are not planning for margin recovery, our priorities are to improve top-line performance, cost management, and cash generation, said Jung in a statement on Tuesday. As previously announced, the company is conducting an operational and financial assessment of the business. We will update investors at the appropriate time after a new CEO is on board.
Federal regulators are also investigating whether Avon broke bribery laws overseas.
Shares of Avon were up 25 cents to $17.77 in afternoon trading.