...Weak Operating Trends: Avon Products, Inc.'s operating results have been on a declining trajectory over the past five years. Two of the key metrics that demonstrate the health of a direct-selling organization, representative base and volume growth, have continually declined. Avon has taken some positive steps, targeting operating margin improvement through a three- year Transformation Plan, and selling a majority stake in the low-margin, EBITDA-neutral North American business in 2016, which allows it to focus on more profitable geographies. Turnaround Visibility: Avon's recently reported first quarter showed a 1.4% increase in revenue (negative 1% in constant currency). It was Avon's first quarter of positive growth since third-quarter 2011 (including currency impact). Fitch Ratings notes that the growth is a result of higher price/mix, as units sold continue to decline. Margins continue to be challenged as Avon invests back in advertising and contends with significantly higher bad-debt...
