NEW YORK, Feb. 15, 2019 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Avon Products, Inc. (“Avon” or the “Company”) (NYSE: AVP) in the United States District Court for the Southern District of New York on behalf of those who purchased or acquired the securities of Avon between August 2, 2016 and August 2, 2017, inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
The Complaint alleges Defendants made materially false and misleading statements and/or failed to disclose that: (1) Avon was engaged in an undisclosed scheme whereby it significantly loosened its credit terms in order to recruit new representatives in Brazil, its largest market; (2) its specific credit terms in Brazil; (3) Avon failed to increase its allowance for doubtful accounts to account for the changes to its credit terms in Brazil; and (4) as a result of these concealments, Avon stock was trading at artificially inflated prices throughout the class period.
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. The Company reported 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 dropped $0.36 per share to close at $3.00 per share on August 3, 2017, a decline of nearly 11%.
Investors who purchased or otherwise acquired shares during the Class Period should contact the Firm prior to the April 15, 2019 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com .
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