This morning, beauty firm Avon announced that its third-quarter profit increased 61%. AVP's net income increased to $139.1 million, or 32 cents per share, from $86.4 million, or 19 cents per share, a year ago. Revenue for the quarter also increased to $2.35 billion, topping last year's results by 14%. Analysts expected earnings of 31 cents per share on revenue of $2.27 billion. A double-digit increase in beauty-product demand was driven by a 23% jump in fragrance sales. The segment was also boosted by a 44% increase in advertising spending in order to plug new products, including the brand's color cosmetics. In addition, AVP is pushing sales in emerging markets, including Latin America and China.
The shares opened the morning slightly lower, but we could eventually see pessimism unwind in the form of buying pressure. Currently, AVP's Schaeffer's put/call open interest ratio (SOIR) of 1.12 is at its highest point in the past 52 weeks. In fact, we are 10 minutes into the trading day, and the trend has already reversed itself, as AVP shares are roughly 5% higher.