NEW YORK--(BUSINESS WIRE)--Mar 13, 2019--Robbins Geller Rudman & Dowd LLP ( http://www.rgrdlaw.com/cases/avonproducts/ ) is updating purchasers of Avon Products, Inc. (NYSE:AVP) common stock during the period between August 2, 2016 and August 2, 2017 (the “Class Period”) regarding the April 15, 2019 deadline to seek appointment as lead plaintiff in the case captioned Bevinal v. Avon Products, Inc., No. 19-cv-1420 (S.D.N.Y.). The case is pending before Chief Judge Colleen McMahon.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Avon common stock during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Mary Blasy of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. You can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/avonproducts/.
The complaint charges Avon and certain of its current and former officers with violations of the Securities Exchange Act of 1934. Avon is a global manufacturer and marketer of beauty and related products. Avon’s business is conducted primarily in one channel, direct selling to Avon representatives. Avon representatives then resell Avon products to end-user customers. As of December 31, 2016, Avon had approximately 6 million active representatives.
The complaint alleges that during the Class Period, in order to inflate its reported revenue and representative growth metric, Avon engaged in an undisclosed scheme whereby it significantly loosened its credit terms in order to recruit new representatives in Brazil, its largest market. Avon did not disclose the changes to its credit terms in Brazil. Avon also failed to increase its allowance for doubtful accounts to account for the changes to its credit terms in Brazil. As a result of the concealment of defendants’ scheme during the Class Period, the price of Avon stock was artificially inflated to as high as $6.89 per share.
On November 3, 2016, Avon filed its Form 10-Q for the quarterly period ended September 30, 2016, which disclosed that Avon’s operating expenses and margins had been negatively impacted by higher bad debt expense. Over the next two days, the price of Avon stock declined more than 7%. On February 16, 2017, the Company issued a press release announcing its fourth quarter 2016 results and held a conference call to discuss the results, which revealed that the Company would report a net loss of $0.03 per share, a 2% decline in active representatives, and a $35 million bad debt charge attributable to the previously undisclosed changes to credit terms to recruit new representatives in Brazil. As a result of this news, the price of Avon stock declined 21% over the following two days to close at $4.61 per share on February 18, 2017. On May 4, 2017, Avon issued a press release announcing its first quarter 2017 results and held a conference call to discuss the results, revealing that the Company would report a net loss of $0.10 per share and a 3% decline in active representatives, and disclosing that, despite its earlier assurances that the Brazil bad debt problem had been fully accounted for in 2016, the Company was recording another significant charge for bad debt tied to Avon’s decision to loosen its credit terms to recruit new representatives in Brazil. As a result of this news, the price of Avon stock declined again, falling 22%.
Finally, on August 3, 2017, Avon issued a press release announcing its second quarter 2017 financial results and held a conference call to discuss the results, reporting a net loss of $0.12 per share and a 3% decline in active representatives. The Company also reported that Brazil revenue was “down 2% in constant dollars, primarily driven by a decrease in Active Representatives.” On the call, Avon’s CFO acknowledged that, despite Avon’s earlier representations, the remedial actions in Brazil ( i.e., stricter credit terms applied to recruiting new representatives) were negatively impacting active representatives and revenue in Brazil. As a result of this news, the price of Avon stock declined nearly 11%.
Plaintiff seeks to recover damages on behalf of all purchasers of Avon common stock during the Class Period (the “Class”) and is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is a national law firm representing investors in securities litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For five consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in both the amount recovered for shareholders and the total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also advocates for corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.
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CONTACT: Robbins Geller Rudman & Dowd LLP
Mary Blasy, 800-449-4900
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: PROFESSIONAL SERVICES LEGAL
SOURCE: Robbins Geller Rudman & Dowd LLP
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PUB: 03/13/2019 06:00 AM/DISC: 03/13/2019 06:01 AM