Avon Products Inc's reported weaker-than-expected fourth-quarter results as sales slid in every market except Latin America and the cosmetics direct seller lost sales representatives.

Avon, whose shares were down 7 percent in premarket trading, is dealing with the fallout from an internal bribery investigation that began in China in 2008. Federal prosecutors in the Southern District of New York are investigating the case, people familiar with the matter have said, and prosecutors have presented evidence to a grand jury, the Wall Street Journal reported.

The company has said only that U.S. regulators were also investigating it.

Avon said in December that chief executive Andrea Jung would

step down after years of weak performances in key markets like Brazil. The company said on Tuesday it would wait for her replacement, still to be named, to be in place before giving investors an update on its turnaround plan.

But Jung, CEO since 1999, said the focus in 2012 would be sales improvements and containing costs, rather than improvement in its margins.

Sales in the fourth quarter fell in every region except Latin America, where strong gains in Mexico helped make up for a drop in Avon's biggest market, Brazil.

The cosmetics direct-seller reported a net loss of $400,000, or nil per share, on sales of $3 billion in the quarter ended December 31, compared to net income of $229.5 million, of 53 cents per shares, on sales of $3.14 billion a year earlier.

Excluding some items, Avon made 39 cents per share from continuing operations, well below the 51 cents Wall Street analysts were expecting.

Avon, which relies on its legion of 6 million sales people said the number of active representatives fell 3 percent.

(Reporting By Phil Wahba in New York; Editing by Derek Caney)

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