AVP - Earnings call transcript Q3 2018

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Operator

Good morning. My name is Dorothy, and I will be your conference operator today. At this time, I would like to welcome everyone to Avon's Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. slides today's use remarks. will company to prepared support The webcast visible the The be the available slides will website. via on Relations company's Investor downloadable call. presentation the A the made of at available will end be the of PDF

financial During the company not investors, they GAAP. the in call be to considered to useful they the measures, measures accordance certain be presented will believe although which reference today, non-GAAP should superior to with

release. quarter. labeled the GAAP reminder, are the Investor the standard prospectively adopted these provide revenue information measures like-for-like. of new comparison, located accounting non-GAAP first standard. comparable impact This in excluding Relations included company the during to earnings the appendix information their in of recognition Both will the is A is and As To the shared this fair a a on be financial reconciliation webcast measures company's the of also the These Investors section risks the call company's statements your are website detailed available today's will Investor The cautionary strategies. the company's financial Ms. forward-looking Greene, to and the may in statement SEC concern of in conference now Relations slides over Amy company's website. statements and in uncertainties business which you Relations. Greene, conference. filings. contain on that and the involve I'll begin the company's turn

Amy Greene

has Zijderveld, call Jan. to now Good the Thank Q&A Jan and you to and this Jamie third X third results, CEO; Avon's review us Jan, to we XXXX our CFO; then and will progress through Jamie, quarter Avon's you, I'm us Slide I'll and over joining President. and morning with move hand morning's agenda. Avon's Dorothy. take for Miguel Wilson, results. our here thank will Fernandez, Miguel the session. quarter

Jan Zijderveld

joining for I Good to areas. today. you Today, Amy. morning and want cover thank four us Thanks,

highlights. First, with I will the start

to of business. join the we our in selling will the discuss Avon, us results. I Miguel progress quarter critical finally, And will social today rebooting are three of our our area I've And focus transformation Jamie share on the asked to financial share making journey. Next, on given progress this

start Open and we strategy me Investor point as with Avon six I've quick at Avon of our out Day. when were quarter presented on operating the weeks closing about in the quarter. described ago Up At two Let our It we a the time, weeks from the patient discussion third table. that was

discussed lots after satisfied those Miguel initiatives but through progress update not some and We with have made will key against and initiatives levers quarter, that we during are we this the Investor I of the the you of Day. on of the and financials results, And goes strategies. some Jamie

starting big move to they financial are of but to see we and changing in the needle, improvements not enough are we business, many While yet a are areas building the Avon. new

our building said the well. working of the improvements reset we I come drivers, we going building our take that new we beginning some business the will hard repeatable to to before, while that excited big are leaks, focus results, importantly, As but are models see growth globalize and we're fix are to on are to time through

of take the But Jamie, the to first, said of details Jamie, time. will before, I now results over As it for three. you. quarter

Jamie Wilson

start good slide Jan, on X. Thanks, I will morning. and

tax Like-for-like LFL reflected reversal press adopted would all reported like providing adjustments. quarter starting our in out comparison third provision, a our new non-GAAP nonrecurring the results like-for-like which and press for standard As recognition our the described useful figures a revenue Once I again, a on reminder, we which results. in is adoption non-GAAP revenue the of and exclude of quarter is we on or adjustment standard we January of year-over-year provides X, large IPI release. Brazil are outlined release. that that the the accounting impact point the in to new recognition this of

information For adjusted convenience, press you reported on the the to and release can find in presentation. appendix a table in of this the providing and reconciliation non-GAAP like-for-like

today's reminder, this be any of unless a in like-for-like using results stated. and otherwise As discussions our revenue dollars information call during will are in constant presentation

Brazil to from overall XX% intensify many revenue with to continues revenue innovating continues direct selling reportable slide environment more Turning companies our segments. overall and The represented making than X. The impact decline experience. Representative to the Brazil's negatively performance of results. competitive decline in enhancements the to

than to Markets perspectives implement businesses, fresh with unusual. is and and revenue managers in Volatility by necessary the new of Avon's changes. have declined X%. Excluding Russia actions general like while injecting change experienced dramatic not needed Brazil would periods to their less working Brazil, are reset

growth We trends. turnaround top more other Despite decline that are That expect X% to in volatility experience their markets improve markets a as to further these there the said along and operating working by proceeds. by are XX points of declined favorable points. net partially margin and basis of supply higher gross improved costs. adjusted basis XXX chain revenue, in Adjusted margin impact by because mix, price the offset are

is by future recent advertising. key outlined the conscious are to investments in we Representatives the expense, in as Brazil's turnaround quarter have and the national made our resetting to relationship of and Brazil success we field and Investor effort market to activity our to particularly this in These other Representatives foundation restore well XXXX, recover Day, imperative. level growth. second transportation As to during as Restoring with invest disrupted adjustments strike for

Moving to slide X.

by dollar and X% by X%. Representatives order declined on improved third I X% constant basis segments Active mentioned, As quarter average reportable revenue Brazil. from driven decline in declined a

focus priority. shared remains improved Avon's shifting Representative Investor reset has As more we at phase begun. productivity a towards our Day,

markets forward. are and are many may move changes in to necessary, create volatility, largest We dramatic but which making some in of necessary our case,

refresh. a by Life improvements with in Most in by segment Home product to In beginning sales upside Mexico, Total and our X%, fell and significant Intimate hear by success by of quarter competition in improvement largely growth, and Apparel. Week multiple sales Avon's our starting We both largely Ultra Home from competitiveness these The and Miguel. Rebel is well, for newest Discovery been the October, impacted are performance new pricing, in overall launched particularly Paris to Collection. has price/mix new improve portion in Kenzo more driven of with X%, integrated management. was improvements Beauty encouraging designed saw again management was driven Color are that during Trend grow three, This refreshes: on Fashion you'll Mark by to Home X% Fragrance and Color, productivity sales base while are category and to initiative, driven & Representative by and the promotional category, business. Skincare. Fashion particularly Fashion were the we recently, the Fashion & softness our Home working mix to had Fragrance about Mascara Brazil. In see notable success power. growth their brand strong, Away revenue and Avon grew is efficiency, note, Far in innovations by LatAm. Colour, where noticeable Fragrance in increased Of impacted improve and from in the efforts by aided Sales we performed Philippines LatAm. approach earning Takada. fundamental two brand Eve in an

mix we regimes to more create bundles products, overall see and continued Representatives our expect increasing improvement to demand train We as offer innovative while price/volume earnings. in our and Her

a Brazil. revenue Also of brochure Gross field, Representative primarily driven by was Moving experience. higher made in contributing pricing The points, basis primarily to new and foreign to and margin in X. also launches increased as investments on percentage XXX improved in basis decline in inflationary points revenue, was increase decreased the from driven operating of slide in Representatives, mix. investments expenses advertising a margin support SG&A Adjusted points. basis the Adjusted XX Mexico by product by XXX and by impact exchange. X%

is approximately as During had of million, XXXX attributable cost attributable and the half of run taxes. half Plan. total targeted. the the million $XXX rate other actions completed the Approximately to the saving with Avon we Open a before associated Plan is Transformation Up the this quarter, we'll to We restructuring $XX of with and Transformation third savings a exit

Turning slide X. to

compared will result changes Our adjusted million, decrease approximately million annualized a $XX operational year. of an $X previous the We and rate provision to was for income in of tax XXXX. structural our XX% tax that believe approximately

we three months XXXX, expect operations the $XX see for million. was ahead course period Looking year. the the reductions flow over Cash of for to from further

subsequently recovered of negatively tax cash Our it the return to October. million million $XX due payment our and timing positively tax by to impacted in impacted IPI cash was indirect by approximately have $XX deposit, we of that related an was Brazilian from in operations

year-to-date anticipated. cash been conversion has than Our lower

inventory progress made we balances, slower expected. it has our have good been While than some reducing in

Planning, and around excess We have putting on and forecasting, appointed Operational strategies, inventory. into place controls and demand focused Sales an integrated a improving process flowing he new Head of is

Turning in ongoing increased XX% due and to adjusted volatility dramatic year, declines million the – in a or Argentina adjusted profit points, with $XX slide Turkey, headwinds of XXX Currency half has along impacted first XX. by This of primarily QX, to operating and negatively negative basis Brazil. from revenue. the

quarter. QX is in headwind third to the to similar be Forex likely

headwinds like and localize productions pricing believe Argentina. the Russia, working help foreign to to impact exchange We We are throughout business continue will the XXXX. to mitigate taking that actions and markets devaluation, in Turkey,

We In through with where we will summary, are to urgency. continue in the our we're mitigate phase pricing. journey, the attacking to sense the of basics monitor and impact accelerated of aim reset

strengthen focus commitments. effort the efficiencies sheet managing for over these to as our fund management, enhance This costs work with the to coupled our to while on turn been to future revenue now, us has balance it growth generating our with make done well that to expect Miguel. investments, financial We And ongoing ability provides plans as and meeting I'll our growth.

Miguel Fernandez

on you, Good morning. Starting Thank slide XX. Jamie.

our contributed Mexico, X.X%, third revenue our second Let quarter previously plus benefited initiatives training, top Argentina, and to Mexico saw begin group increased performance success and in the continued reviewing focus quarter, we top on of service. Mexico's markets: Philippines. markets. training. and efforts top three five the in in is revenue included me an we earners. growth enhanced the from the Building an in results focusing incentives, In the this This revenue by third segmentation among quarter, quarter have on quarter. increased overall on the about, their talked implementing resulted improved These model

Color X% and successful the based the average growth XX.X%, up Mexico's order. devaluation. on strong helped continued, of offset drive an pricing Finally, to Fragrance launch innovations in Argentina's increase

Skincare begun adoption got business. grew this up X.X% revenue actions market also team Philippines Brazil prior and taking Fragrance. sequential recover. platform. will and result We success Reps to improvement X% and highly can XXXX. Ending to the service. joined our as Representative. market success shrinking Marino, The Beauty Russia's use trends of usage anxious competitive, a believe of Brazil's in quarter, growing his of by And believe We have investing it an but over Vicente and time, General increased finally, by the focus While new begin a during increasing we recruitment softer, the shore message make see led we Manager, quarter we're and the the We're larger the rebuild in the but Avon meetings, benefits seeing energy along the the saw share our He resources take Beauty to believe with happen. market in during improvements the of about Brazilian and scale we're deliver the on market, but It clear of e-commerce Avon was the year supported focused mid-September. in becoming José

XX. on Now, slide

business, During competitive modernize our the turnaround of critical and we and I'm recent core position Investor first implement to going in breakouts, global Day, of speak the business the Beauty culture. transform to the our elements strategic regaining couple to the points. three outlined our market:

slide to XX. Turning

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XX. Turning to slide

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our exceeded quarter. this goal We have substantially

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plans to these accelerated have the quarter. We numbers our training in efforts with double fourth

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to Those customers. orders trained. these yet compared those We're who training. sending the training Another programs. average sales artists makeup then this all performance empowers trainer their Mexico, Representatives XX from example sales be field of our leaders launched events and to divisions XX sales to are train across and and organizations already their quarter, attended delivering the hands-on improved the benefits into higher they seeing provide Training to managers

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implemented across We have being initiatives in different stages the key globe. several

along plans further scale than to are and markets have and capabilities expand some recruiting build already our traction, markets others training across all efforts and we While in gaining XXXX. our to

be are take potential it to to model While highlighted including see reach today. for those full will fruits our labors, of changes some and we're time our there implemented, other beginning to its

Now, back to Jan.

Jan Zijderveld

Thanks, Miguel.

on slide the to XX strategic turning and Now, will I breakouts. now focus

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We expect end this all by the of to markets in be year.

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would take we to your Now, questions. like

process. First, to let to back start me Amy turn over this

Amy Greene

you. Thank

Q&A Dorothy turn want have possible. as that things of we to the to questions to begin answer thoughtfully and Before time accommodate session, to as many I plenty everyone we over to ensure can

that can So, go keep Q&A open? we the in you please Dorothy, session. mind please through as

Operator

Lauren your question your the of then pose question. Please from first comes Your line affiliation Lieberman. state

Lauren R. Lieberman

What public was standpoint? point. there to the can progress suggest an go from again will a is could results we of maybe Barclays. Great. really if offer, Thank this we at external the you that through things That checkmark, metrics it you. in and that that on are this going that in okay, Jan to color gauge would some able the moving be see should would we while But see of the embarked helpful trying keep to a that that direction be on anything Thank beneath sort reset get extra knowing it it great – upon? we Jamie, say, company, you've P&L, what's there's or stakeholders you you. work financial It's be right was to track things we can't helpful as are

Jan Zijderveld

really that's with up first good you to good. really question, Lauren. again, It's Thanks, and your hear Yeah.

the to I Her all about in really is shifting increasing think productivity internally And Rep of end, in the Representatives end, retention. a and our of we're lot that focus earnings.

add So, simple training, talked it's the machine, core and a recruitment of earnings and by as and retention is that, pretty but to the machine, really good is and really is about. driven rebooting earnings, essence a the retention to the that really the that's it as about need Miguel selling we we've direct what of of

Operator

then Your the Please comes state pose next your of from your line Nicholson. Wendy question. question affiliation

Wendy C. Nicholson

just of, I part the long I I'm sense think I I new guess, is Hi. hires once. have. and are number too Citigroup. trying of initiatives with to question, to that, broad guess you question as is listen my do of list And about all at very, much a a very the of you

sure so sounds maybe it you huge everybody the right great. Thanks your time, you just is make that too? you the Jan, how organizational you oh, how mean, and to all can It's of the complexity, of spend ones can mean, speak prioritizing and So, Miguel, I kind the like, impact? I projects, a that work. gosh, but most sounds will exciting, it my just have amount

Jan Zijderveld

focus improve what Wendy, making a value the fundamentals, the do retention is recruiting what machine. and direct Her. can very as on creating to a we're focus company, is have we to for of refresh as see with as clear training And our just and Her just of said create essence lot a brands which of requires I to real but prioritization and more selling to In And part able starts we a about value turnaround through quite is that a of thanks, end, I machine, that's earnings right. to well, rebooting to interventions. more Then, do. got sure absolute how a experience. for the mean, I the we create it think obviously, But more be to that, become machine creating Her. not that the Lauren

and other business. starts go in thing away on the us go that simplifying decentralizing up the siloed complex to and really products of really higher processes, things value second leaner, the to processes, marketing, Her which the and in more we're to markets extent, make focusing the the third bundles closer business that thing And hand organization making with simplification creating doing. we're dramatic really faster reduction money, It's really overly the actions. some with and and to SKU make and that's the to the that processes, hand closer clog the is So, then

boil it really more really simplify creating value business. trying can selling; you it's she the the if then those and about items, So, so all more with brand for value higher money; about make to down, rebooting three it's direct things:

to got of won't supporting Avon really coaching we with and that places, really a new team needed talent, that, felt we And that's we're careful of some new little us then that people that direct of whether us and that get a we're part there. as – blending that's we're bit knows Now, here inject promoting, number new it talent really injecting talent selling the in that again. good a

back took Central hire inject America in building we direct company in a So, quite need companies last guy few e-commerce, sort rebooting there. people that. really we is example that the was them another from is direct selling direct talent a But selling, also injecting capabilities, new used here into the of course, to be team and in selling his to IT to understand the of of and Bernadette it's and build where existing of whether and

another Well, coaching, what teaching, every resetting talking really somewhere I Miguel I'm of we to our think actually in And and and do people and have new I was really and really also time, selling, in we you model talent the market, the boost new we've from really is a we do support your another spend where reteach I'm I week, anything them. enough and them, direct in Miguel, Every which then, and week, China is don't lift third fundamentals we're got plan to them So, think of careful markets. last market you? need we in a where we think the week, that about. else. have think the up, have where one. we of capabilities injecting add building

Miguel Fernandez

No.

Jan the seller direct good as and market. that parts not the a is key differentiator saying a biggest think of priority for training the is this some between This good a I muscle is lost the that we was world in and direct seller.

of and training. better parts get We markets much have in much, our to relearn in some

priorities, one downside. So, we're no that is training has prioritizing

much is we how many be better, this and to beat competitors. many, have can We

Operator

Your question. the of pose your line next question Dibadj. Please Ali state affiliation from your then comes

Ali Dibadj

Hey, a what's about terms of, just particularly Talk happening Brazil. guys. couple your last competition. in bit in little competitive I'm from off leading one, perspective, Bernstein. a I a comment from had about just

was You where worse your to you Brazil number more there. that and got even that transportation are we might a I want when look, understand mentioned turn because, little it bit issues. difficult had how on

to So, the a better? comfortable to bit words, in XXXX, count Rep Rep a training could elaborate if then receptivity on get just the you stabilize And of hoping what your more continues. a the is to it's you're growth seeing the the for little things terms might that decline still that's and And of little relative competitive, if in you're it from productivity of that why us going increased get bit similarly, perspective, goal? if Rep the to actually,

Jan Zijderveld

Yeah. Thanks, Ali.

effect And alone this So, million you're on quarter, over had Brazil. decline, a comes disproportionate results Brazil from right about $XX Brazil. $XX million our

but So, that's XX% Rep of That's revenue, in the decline. in count. also

X% over total So, decline in Rep count.

Brazil, it's exclude you If X%.

the in components with it. table, So, clear know is So, an has lot we $XX all Brazil, but to are of have to in significant, QX is volatility, be and at on is Brazil a million which (XX:XX:XX), the number the doing? definitely that market a we all easy what Brazil, Brazilian of work is minus market we and done operating the which moment it's that the not results

Representatives hangover of we Brazil lot First and we lost in the strike, enough weren't we to from strike still because Brazil is, important them. have a the the

our pick we is that that only to focus to we The improve they they now retain and productive. the And also and become top not also and what Mexico, was was we're more sure Reps. that's Brazil a of to that's we around them, their in going none productivity, Reps, So, but and was start start to walking very fact that is all, incentives, but top make to second our lost service, and and one real to invested and therefore, now our doing on in we We biggest trick our up that invested and biggest and very, of motto losing money that, like invested have reengage better we focus happened is, training. but started really in well as top securing did earn well. of exactly their training, zero that's to – in them first money is terms of Reps, in huge the more we

touch focus all some trained the the X million fact, in the training going earnings, earners QX. who've of them million, We end about now to get to been X.X of the to QX of Reps end leaders have and our improve and part-time their with form at XX,XXX year is the sales million X.X into of target improve quickly And before especially our really them the X,XXX also above the X that BRL how to BRL Brazil about productivity sales to part-time people, landing we that XX,XXX using those and is on as earners all, the And every ones. to possible as of get leaders Miguel the for in see X,XXX to campaign. touch talked training to million

them thing we've APAC. we're Reps third getting and we've some the about for small the lost getting The doing lost, those of new smaller that is significant scaled back, Reps, is that of a recruitment model amount repeatable Reps,

how scaled APAC better So, build, to to sent of Brazilian we and teach recruitment. quality from the to we learn team a do and bunch

In fact, XX XX,XXX Campaign new going in we're in people. to Brazil, recruit

give down and had SKUs. to also simplify to and year, the with point Russians, really example business we only models on We and So, and about. talked into quality we productive, to And that's power recruitment the Brazilians there's make the we're of the trying overly a of meetings, them fold, and This sent to sent also Africans back – we'll X,XXX this bit I'll little business. the before see get again. fourth We our sent how the only is X,XXX complicated, scale not recruit people new overly José siloed, the the that become working SKUs, also an repeatable a to we dramatic learn more and team the to more haven't then, get how simplifying program the then you that Brazilian business. really there. had South is end we APEC

simpler third driving a focused that to over more harder. and the make So, the business the in reduction really core of SKUs and core on

Brazilian also but is that market. behind, say that else, the I tough recipe think little a similar a it's we're and everywhere it's doing bit So, market fair and we're a to competitive

Miguel, give you bit in Now, moving terms more decline, that. of your to second or the can overall question to a but Rep flavor better maybe

Miguel Fernandez

with. whole first to approach be to dealing has the to us. to and primary launching to concept be even training with just The had We going highlight them, people them, great product, program that step person's very do this we the on to is We – is certain relevant days that continuously want the better is more, in we're example that a in we of a that training first the did very Mexico. effectively, QX. identified is their If saw And the we to that to we of do adapted this in understand what that what with stay an interest need get concept is person even time learning it. Yeah. kind want becomes that still Obviously, level segmented results we're tracking take step in whole training we're in XX interests. of to they is first the segmented intent. with and of it then the is a spectacular an to what and follow training, so around better, was income first the with this to approach campaign. about reason how a the first We're more works world people We the this that the us training, them, that wanted group, Mexico. created earn and results a money up service, in with we behind I to meaningful

whole to them. of and train give the actually want who's be them and concept is really, make the them, of going really progress tools tracking the how that's we're with identify us, So, the money to services, all

Jan Zijderveld

know certain in until of as is that reach we for measuring order, the these Obviously, the question, of related threshold to them stay us retaining Reps much us those key and other factor higher. the people with average to productivity each they chance we're to that the going the be them are

Operator

question. your comes Bolton Please pose Weiser. from your then Your question affiliation state next Linda

Linda Bolton Weiser

Davidson. Hi. D.A.

you focused and a improving. service So, quarters and about you started on talking Jan, certain fixing in were levels really your the performance, give in lot to to first numbers that the service metrics sort issues, the illustrate of

us if – after that one that would is just important service some service, talk all? attacking improve, And what update thing I to And thing that? service be to Thanks. second service that second it to can how So, you about the mean, most you second continuing just most after you that thing levels? of on is maybe mean, have name first secondly, I you're important can would give then the be after thing? attack service,

Jan Zijderveld

Yeah. Thanks, Linda.

off We It's improving. crisis damaged service remember Now, we anymore, there, XX% products; is damaged or had a lots now. more had that of the That improved. a product. created X% X% where down sense a started boxes to a is in has we not The of delivery service. segmented

some best So, are no, the service company the Am and in we is it the platform that world made improvements lots but biggest was I we of at quite. of a away not happy burning we had. that totally in QX, not now taken it all; issues that yet,

have in want home, we're more service, points, pay So, to want to at delivered lots we're there's it and doing have a to it, and try delivered tests of they do, do do to they to pickup want progress, lot to service, for to optionality pay making it more for people at differentiate don't they good do it. want but give

this So, to how almost service a become the moving better company. thinking crisis issues we're really really where we from fixing is

also our solutions, also service, do As probably open to our more see solutions. than with better we it it all are different many can looking not; many, teams we can suppliers part do talking can probably; people, work other we ourselves, new can improve of that, at other to can we we're people to partner with find us, how do who need we

go, you say, company. to hard working if issues becoming service we're to fixing best-in-class So, really the real a

the So, I would call it, journey. there on

We If business. product, the our it's second taught heart it's to believes how believes – being rewarded any training X of she make feels heart company. that, and how forgot training, Avon And efforts, really many that money, training. she's it's to one really, forgotten go if she meaningful more say the the to I putting simple, recognized she feels of that direct with of that to easier, earnings, got of then of business get that's priority, well, on at must in important are We've your she she time training, is question, for will back. is our we've if our million all she whatever and is these a The ladies in us really what in if the you – brand, things we're – if for these it's doing second gets what's period that that want and for last second Her selling most say.

the that she is at discount all is a sure making advisor So, Beauty she saleslady that becomes it about really versus this moment. trained

this that about that we that's you countries is XX%, to many, non-trained example, you when of we training, Now with famous We whole products that uplifts bundles Mexican selling our from buy discounted in talked thing people you've loyalty training center, is turn When where in a sell in in Her, is we're pick do those got the assisted in sales really and pretty also training, And sales can the Brazil, this become, training Hungary, soon XX% the leaders our knows trainer, The consistent and we the the between whether it in invest intent, regimes invest developers, happen, to up. to see and Her is into but products, that doing. are especially evidence whether she's but reset is got the and in has our from become our starting Beauty that that's Argentina, but see and advisor brochure, as this whether increasingly train now. many that has a can organization trained results. business become that's about about picture. got invest we and and see there knows good lady, trained selling brands, and to

people really priority, that's to train So, that's million we're second half. and out called in the the X.X second why big going we

in how and get In the create how people almost the to how what that to QX at is on do the you simple, better training, segmented But you one priority training, X million different is and training, the big the you need training how we that, of we've continue drive invest really the prove rural trained train you we're is in fact, how fix the Her second to earnings. really further, probably in and in train going follow-up, train, you continue what's it, different areas. narrative to service, to city increase

Operator

Your state next Please your question comes Steph affiliation question. pose then from Wissink. your

Stephanie Wissink

function incremental comments training impact step I the the training to talk and the Jefferies. another be step you follow-up little a on want in financial From SG&A. Will on bit there third just Thanks. Can the your in about in function baseline then just we as year, assume new through progress quarter? phase expect down fourth as into And should Thank is an this you. the to level we we as look this XXXX? in a you that XXXX, incremental level and expenses this quarter? or

Jan Zijderveld

build second the think the think So, you're is it do – in the in training focus said to train don't But money the end, to year. really be. this the in did $XX world. And do done scaling about training cost we cascading key QX, where it is need to around money, trainer that million teach amount of $X.X mobilizing to the sales that about I last right? of the end the our half, which in training we in the I double the the program QX. the $X.X We needs people. we million, the of leaders I that's is saying that is in get quarter of about we've about same the of what to and invest rate we'll obviously about and invested training think, issue the training, Stephanie, million capability because is

money, again. it's capability it's and building than that the So, more muscle

is the digital stepping we're unlocking The which really of up as really training power second well. area

a So, segmented it's approach. about

to creating have a want the For people, how some what full-time get we're the want be little create earner, how be bundles. part-time definitely seconds, it's further to distribute you minutes, if this try fan a product, how short you're them videos, as you via it's But to know, network. set doing trained there if training. this you and a also some Beauty this is of then want or or they face-to-face to consumer, And distributed XX you throughout or to seconds, regime social get X new XX media, use to look, and maximum

So, it'll more than it's of and about money I be lots digital stage. follow-up, about training and capabilities a face-to-face, at combination of think this

Operator

from line of comes the Please question. affiliation question pose Doug Lane. state your next Your your then

Douglas Lane

Yeah. talk Hi. Thanks. I Lane Research. to want about the China.

you direct of is And about, the who the than talking that do or Boutiques, to different that a more just think Beauty the you Boutiques Beauty You you're distribution? e-commerce. e-commerce can now selling? talk or part about got little three How who and in distribution e-commerce that? bit that through the the retail, routes can get reach you retail targeting And you're you reach and wouldn't

Jan Zijderveld

Yeah.

So, said selling – also made in direct remember, brand that our first decision week. power because model Investor was I with of is Tier And centers, fact bold Avon's cities we is China got awareness, a the as I We've warmth the the I actually and Tier phenomenal. Conference recognition and likeability urban but in that all said, brand to feel the X of XX%. not not in in of X brand there last follow anymore, and a and in Tier X in China just we

from a to people meet huge to for as that our you is You opportunity most to the the anyone, talk hotel check phenomenal. person into obviously us you know And brand. It's people consumers, unlock. a

with it's that first distribution all, and retail. more of is, So, building about traditional channels through the

got e-commerce making the brand that that we unlocking our also and in And can going all those you when business goods, that market our leveraging most for driving is So, available e-commerce developed getting world products building consumer and now build in hard and known those to is and But retail growth and fact already then back in have are a they've e-commerce. fast. fast platforms a have through into really phenomenal and most big know business starting start by channels e-commerce you we the rates to that's already see we're and retail the biggest goods, platforms drive that on and that China, very, from. and very to you of China really build recommitting

quite Dress is, We think, star, program It's way powerful. very one a Our great very, in brand. sold activation and with Chinese a of e-commerce over really Little local China Fragrance new digital example good it year-to-date, in it, and is in Black Fragrance number drove encouraging the around great activated a terms example. a to I a become course, units of

them have upgrading way. Boutiques or of bold there this see, Avon, who where going over really we're thing, place Avon absolutely normal selling. our leverage sort tell products, the regimes trained shop have in it X,XXX, create that really a value going that have the and the franchisees e-commerce unlock. and the do we're going where whether can the the a e-commerce, we approach, about new the then the is can innovations, then and and that in we door feel physical to those way, of to about it's different and do brand next and we buy say brand, final improve it's retail, direct to multichannel a a the and them touch X,XXX whether And it's people can power not to move or So, the brand through that to whether it's We're people

was very a – As but we that and have there, you know, out big big underutilized. totally factory

the new capabilities to going in, that buy China put new sale the and we've for we're up and factory, fill drive in, find And that hopefully put partner a going put put with to new and is So, lines to partner then together. therefore, build investments actually to partner now them that, in together.

is is So, Avon, foot Avon, on thinking the Avon business example China that's China. and a an Open I think in differently, that's an microcosm New Avon building a the new front nice of the

Operator

Your pose your affiliation state the Carla your comes Casella. then line last from question. of question Please

Carla Casella

Hi. mentioned where talked tax structural I'm rate. – operational with here, your to changes the your of that questions revenue. in the you're as of your had of liabilities more structure U.S., to on outside changes – about well You Couple to are moving you the the one improve on that the and better JPMorgan. past going Any front? capital match

Jamie Wilson

Yes. most quarter, the this second next down starting our obviously Well, I we and our (XX:XX:XX) mean, paid debt leaves in nearest dated one million off bonds, debt of we've that – so in the our paid year XXXX. $XXX

is rising So, in mismatch we a our said at will earned dollars is we've predominantly past debt clearly, look the between yes, is, in that. flow when there income what And overseas.

to look earning try continue dollars. at we in a it sheet, we're unlikely way manage that go of we'd raised raise that will debt it the currency where on as raise to We'll where gets we our that through the in So, to by sales. balance currency and it's

So, overseas. to it's be likely

Carla Casella

Okay. way you of competitor there a they dropping different you're could the by there. Reps, And going or give any market? is when more then, to typically losing to track, market is it color us are out Any or

Miguel Fernandez

So, it's back because creating narrative. say we're we're hard Reps most them was to market. fulfilling that comes of we're depends that saying by the to losing because to not Jan and what expectation about an is it the that But

offer clear we sure and to absolutely opportunity which make that to train what them. is meaningful narrative more have them, part-time we to in them that are we We for get the that

that going they're still say these people income. wouldn't need somewhere – I that are but else, still they that basically, So,

they going income. go can that find they're to So, anywhere where

them. that place to we be for have So,

Carla Casella

Thanks. great. Okay,

Amy Greene

call. today's joining for you Thank

replay reminder, after we our look and on Relations again the and are available a website, speaking As forward the Investor fourth quarter. with webcast you to materials

Now, I'll out Jan with few a quick close comments. let the call

Jan Zijderveld

to and a the a and and is that's actually direct in questions. selling, great is you feel going and real interest really and also around the as training. plan, on, it One And focus four to lot there's for improving honest, about becoming And hear, a can importantly everyone rebooting Her most to there's focus up most our plan that, but is things. with thanks So, and be machine it really up training retention making to first and drive got business as that really that's do easier through productivity the to stabilize us. step And simple they do that, Her as making we productivity, improve business. and important and sure really our priority

one in more is our creating brand. second value The

transaction is unit the next only player. average $X which half Our cost is

the So, it it we can to up higher for terms make in improving bundles, we're got ability provide to to tier transaction, and item, strengthen of so it's and our Her with have (XX:XX:XX) she easier so Her increasing second doing of so That's Her up a value our value money. brands money. builds earn priority the to marketing,

the So, that's thing second focusing on. we're

brand of working working, out okay, and e-commerce simplifying more it, It's big out we're that third our to is examples be all make it's all unlocking reenergizing activities, finally, are starting how then and business. The opening as there, simplify us e-commerce those, digital four creating see and do Asia. one to this really on. of themes: there focusing Her, away to mess, up, down And repeatable and models those well new rebooting want opportunity Asia, driving really our course, geography theme. trying as huge of company, for unlocking good access, in and in of really clutter, and is are as and the we all open the we're is create replicate as To that. value the all to it's things in then Underneath marketplace, selling, those thing then honest, team. another areas thing, the and to say, That SKUs, lots then our agenda it's getting which direct that's taking more area. the simple we we're closer those called us, up a is, we new really that are that but processes, And simplifying for an the and in the creating business, our value end and four a that, take to because lock into as do those really turning

lot Avon being a joining thanks So, for supporter. the for call and everyone an

it. that's So,

Amy Greene

and it. you to forward Thank speaking look That's we'll again with soon. you

Avon Products (AVP) 1 Nov 182018 Q3 Earnings call transcript