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AVON INCOME UP 10 PERCENT ON CONTINUING OPERATIONS; CHARGES FOR FAS 106 AND DISCONTINUED OPERATIONS CAUSE LOSS

 NEW YORK, April 20 /PRNewswire/ -- Avon Products, Inc. (NYSE: AVP) today announced first quarter income from continuing operations of $24.6 million, or 34 cents per share. However, a net non-cash charge of $107.5 million, or $1.49 per share, for the cumulative effect of changes in accounting for other post retirement benefits (FAS 106) and income taxes (FAS 109) and a $10 million, or 14 cents per share, charge to discontinued operations for the previously announced interim award in a California arbitration proceeding, created a net loss of $92.9 million, or $1.29 per share, for the first quarter 1993.
 Income per share from continuing operations was up 10 percent over the prior year's 31 cents per share, excluding the impact of a first-quarter 1992 after-tax restructuring charge of $64.4 million, or 90 cents per share. Sales increased to $841.9 million or 4 percent, over the prior year period.
 "First quarter results, which historically contribute a small percentage of our annual earnings, are in line with our expectations," said James E. Preston, chairman and chief executive officer. "Given the continued sluggish economic environment around the world, we are pleased with our results. We were able to offset soft operating results in certain regions with lower net interest expense and non-operating charges as well as a small decrease in the tax rate."
 At the end of the quarter, total debt was $324 million, down from $427 million at the end of the first quarter 1992.
 Avon International's sales and pretax profit increased 6 percent over the prior year. The company saw strong sales and pretax results in the Americas, particularly in Mexico and Argentina. Sales and profits were up significantly in the Pacific Rim countries; however, the impact of the recession in Japan caused a decline in the pretax profit of the Region as a whole. In Europe, sales and profits were hurt by lower unit volume mainly in Germany and the United Kingdom. A substantial part of the European sales decline was a result of the strong dollar against many European currencies.
 Avon U.S. sales were even with last year; however, pretax profit decreased 10 percent. Higher sales of jewelry, color cosmetics and skin care were offset by a decline in sales of gift products. "In certain areas of the United States, our business was affected by the sluggish economic recovery," said Preston. "U.S. profitability was down primarily because of a significant investment in advertising -- which we expect to pay off later in the year -- and the ongoing incremental expense of FAS 106."
 Consolidated direct selling units were up 5 percent. International units increased 10 percent. U.S. units declined 2 percent.
 On March 23, Avon reported that an interim arbitration award ordered the company to pay $20.4 million to the former CEO and minority shareholder of Retirement Inns of America, a former health care subsidiary which Avon sold in 1988 and 1989. The interim award, which had an after-tax impact of $10 million or 14 cents per share, does not include possible punitive damages. The underlying dispute in this case arose out of the divestiture by Avon of Retirement Inns of America. The arbitration proceedings are continuing.
 Avon is the world's leading direct seller and marketer of beauty and related products with $3.8 billion in annual revenues. Avon markets its products to women in more than 100 countries through 1.7 million independent representatives. Avon product lines include such recognizable brands as Anew, Skin-So-Soft, Moisture Therapy, Color Rich Lipstick and Imari fragrance. Avon is also the world's leading manufacturer of fashion jewelry, and markets an extensive line of gifts and collectibles. The company employs approximately 30,000 people worldwide.
 AVON PRODUCTS, INC.
 Consolidated Statement of Operations
 (In millions, except per share data)
 Three months ended March 31 1993 1992 Percent change
 Net sales $ 841.9 $810.2 4
 Costs, expenses and other:
 Cost of sales 322.9 312.9
 Mktg., distrib., & admin.
 expenses 462.8 438.0
 Provision for restructuring
 costs -- 96.0
 Interest expense 10.1 11.6
 Interest income (9.2) (7.3)
 Other expense, net 14.8 17.0
 Total costs, expenses
 and other 801.4 868.2 (8)
 Income (loss) before taxes,
 minority interest and
 cumulative effect of
 accounting changes 40.5 (58.0) --
 Income taxes (benefit) 16.2 (16.1)
 Income (loss) before minority
 interest and cumulative
 effect of accounting changes 24.3 (41.9) --
 Minority interest .3 (.2)
 Income (loss) from cont. opers.
 before cumulative effect of
 accounting changes 24.6 (42.1) --
 Discontinued Operations, net (10.0) --
 Cumulative effect of changes
 in accounting for post-
 retirement benefits and
 income taxes (107.5) --
 Net (loss) $ (92.9) $(42.1) --
 Income (loss) per share of
 common stock
 Income (loss) from cont.
 opers. before
 cumulative effect of
 accounting changes $ .34 $ (.59) --
 Discontinued operations (.14) --
 Cumulative effect of
 accounting changes (1.49) --
 Net (loss) $ (1.29) $ (.59) --
 Average shares outstanding 72.03 71.81
 -0- 4/20/93
 /CONTACT: Mary Taylor, 212-546-6341, or Jim Daniels, 212-546-6058, both of Avon Products, Inc./
 (AVP)


CO: Avon Products, Inc. ST: New York IN: HOU SU: ERN

TS -- NY016 -- 7823 04/20/93 09:10 EDT
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Date:Apr 20, 1993
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