Earnings/News Release

Avon Reports Third-Quarter Total Revenue Up 13%

Beauty Sales Grew 15%; Active Representatives Up 5%

Earnings per Share Up 63% to $.52, Including $.09 per Share Tax Benefit

NEW YORK, Oct. 30 /PRNewswire-FirstCall/ -- Avon Products, Inc. (NYSE: AVP) today reported that third-quarter 2008 total revenue grew 13% year over year (6% in local currency) to $2.6 billion. Sales of Beauty products rose 15%. Active Representatives increased 5%. Revenues benefitted 7% from pricing and mix, and units sold decreased 1% versus the prior-year quarter.

Operating profit rose 33%, to $297 million from $224 million, and the company's operating margin rose to 11.2% from 9.5% in the year-ago quarter. Net income in the third quarter 2008 was $223 million compared with $139 million in the year-ago quarter. Earnings per share were $.52 versus $.32 per share in the prior-year quarter, or 63% higher. Earnings per share in the 2008 quarter benefitted from one-time tax adjustments of $.09 per share.

    Andrea Jung, chairman and CEO, commented, "Avon's third-quarter
performance reflects continued momentum of our turnaround plan.  Our
investments in advertising and the Representative Value Proposition (RVP) are
yielding strong results.  Again this quarter, growth in our Beauty sales
outpaced our overall revenue growth rate.  Additionally, our performance is
benefitting from the savings and benefits from our restructuring program and
strategic initiatives, as those programs remain on track to our longer term

The company's 15% growth in Beauty sales included increases in all categories: Color was up 19%, Fragrance grew 18%, Skin Care increased 9% and Personal Care rose 13%.

    Beauty sales benefitted in part from a year-over-year 11% increase in
advertising expense, to $106 million.  Advertising supported the launch of new
products, such as the Anew Rejuvenate line of skin care, U by Ungaro
fragrances and Pro-To-Go lipstick, as well as Representative recruitment
advertising in priority markets.  Additionally, 2008's third quarter included
an incremental $21 million of costs for initiatives to improve the
Representative Value Proposition.

Third-quarter 2008 operating profit included costs associated with the company's restructuring program of $14 million ($.02 per share after tax), versus costs of $33 million ($.05 per share after tax) related to the company's restructuring program ($27 million) and Product Line Simplification initiative (PLS) ($6 million) in the prior-year period.

    Avon reiterated that it expects to achieve annualized savings of
approximately $430 million once all initiatives of its multi-year
restructuring program, launched in late 2005, are fully implemented by 2011 -
2012.  Those savings are expected to reach $270 million in 2008 and $300
million in 2009.  The company anticipates costs to implement all restructuring
initiatives from inception to completion to be approximately $530 million.
Additionally, Avon reiterated that beginning in 2010, it expects to achieve in
excess of $200 million annual benefits each from its PLS program and Strategic
Sourcing Initiative for a total in excess of $400 million from these two
programs and over $830 million annually from all initiatives when fully

At quarter end, Avon's total debt had increased $313 million from the year-end level, and cash had increased $4 million. Net cash provided by operating activities was $303 million through nine months of 2008, compared with $63 million in the same period of 2007. This favorable comparison was due in large part to higher net income and improved management of inventory and accounts receivable levels. Looking forward, the company said that it continues to expect full-year 2008 cash flow from operating activities to be substantially higher than that of full-year 2007.

Third-Quarter Regional Highlights

Latin America's third-quarter revenue rose 25% year over year (13% in local currency). Avon said that revenue increased over 30% in Brazil, nearly 40% in Venezuela, and nearly 10% in Mexico. The region's Active Representatives increased 4%, and units sold were flat with the prior year. Operating profit grew 44% versus the 2007 quarter, primarily due to higher revenue as well as favorable foreign exchange rates. Latin America's third-quarter operating margin was 19.4%.

    In the North America region, third-quarter revenue was 3% lower (4% lower
in local currency) than the prior-year's level.  Active Representatives rose
1%.  Units sold decreased 5% from prior-year levels.  Sales of Beauty products
were flat year over year, while sales of Beyond Beauty products declined 23%,
reflecting, in large part, the general retail environment of the region.
Operating profit was 29% lower than that of the 2007 quarter, primarily due to
lower revenue coupled with higher input costs.  The region's operating margin
was 5.1%.

    In Central & Eastern Europe, third-quarter revenue rose 17% (5% in local
currency). The region's growth was driven by Russia, where revenue increased
12%, and also Ukraine, where revenue expanded 50%. The region's Active
Representatives grew 5%.  Units sold increased 2%.  Operating profit was 13%
lower than the prior year, as the region's revenue increase was offset by
higher RVP and advertising expense and the unfavorable impact of foreign
exchange on product costs.  The region's third-quarter operating margin was

    The Western Europe, Middle East & Africa region achieved revenue growth of
8% (6% in local currency), due in large part to continued growth in Turkey,
where revenue increased over 20%, and Italy, where revenue rose nearly 30%.
U.K. revenue grew 1%.  Year over year, the region's Active Representatives
rose 6%.  Units sold decreased 5%.  Operating profit was 73% higher versus the
2007 quarter due to higher revenue. The region's third-quarter operating
margin was 5.8%.

    Asia-Pacific revenue increased 6% (2% in local currency), with the
Philippines contributing revenue growth of 20%.  The region's Active
Representatives rose 1% year over year, while units sold increased 3% compared
with the prior year.  Operating profit was up 96% year over year, primarily as
a result of lower overhead expenses.  The region's operating margin was 11.0%.

    Revenue in China grew 25% (13% in local currency), Active Representatives
were up 98%.  Units sold were 5% lower.  Reflecting continued strategic
investment, the region reported an operating loss of $7 million versus a loss
of $5 million in the 2007 period.  The region's third-quarter operating margin
was (9.6)%.


    Avon reiterated its strategy to invest in both its brand and
direct-selling channel to drive sustainable, profitable growth.  As a result,
the company continues to expect revenue growth over the long term to average
mid-single digits, excluding the impact of foreign exchange.

    The company has not experienced a measurable impact on its business
outside of North America from the current economic and financial crisis.
While the company considers the consequences of possible deterioration in
these economies and remains watchful of its business trends in these markets,
it currently expects fourth-quarter 2008 local-currency revenue growth rates
in these markets similar to those of the third quarter. The negative consumer
environment in North America continues to weigh on Avon's performance in that
region, and the company expects that trend to further deteriorate in the
fourth quarter.  Additionally, recent significant movements in
foreign-exchange rates, if maintained at current levels, will negatively
impact fourth-quarter and full-year 2008 growth rates and operating margins.
As a result, the company now expects a full-year 2008 operating margin in the
range of 13%, compared with its previous expectation of an operating margin
approaching 2005's level of approximately 14%.

    Avon believes that it will continue to generate strong operating cash
flow. Combined with global cash balances approaching $1 billion and a single-A
credit rating, this should more than enable the company to meet its financial

Avon will conduct a conference call at 9:00 A.M. today to discuss the quarter's results. The dial-in number for the call is (800) 843-2086 in the U.S. or (706) 643-1815 from non-U.S. locations (conference ID number: 67076202). The call will be webcast live at www.avoninvestor.com and can be accessed or downloaded from that site for a period of two weeks.

    Avon, the company for women, is a leading global beauty company, with over
$10 billion in annual revenue. As the world's largest direct seller, Avon
markets to women in more than 100 countries through over 5.5 million
independent Avon Sales Representatives.  Avon's product line includes beauty
products, fashion jewelry and apparel, and features such well-recognized brand
names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals,
and Mark.  Learn more about Avon and its products at www.avoncompany.com.


    Statements in this release that are not historical facts or information
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.  Words such as "estimate," "project,"
"forecast," "plan," "believe," "may," "expect," "anticipate," "intend,"
"planned," "potential," "can," "expectation" and similar expressions, or the
negative of those expressions, may identify forward-looking statements.  Such
forward-looking statements are based on management's reasonable current
assumptions and expectations.  Such forward-looking statements involve risks,
uncertainties and other factors, which may cause the actual results, levels of
activity, performance or achievement of Avon to be materially different from
any future results expressed or implied by such forward-looking statements,
and there can be no assurance that actual results will not differ materially
from management's expectations.  Such factors include, among others, the
    --  our ability to implement the key initiatives of and realize the
        operating margins and projected benefits (in the amounts and time
        schedules we expect) from our global business strategy, including our
        multi-year restructuring initiatives, product mix and pricing
        strategies, enterprise resource planning, customer service

initiatives, product line simplification program, sales and operation

planning process, strategic sourcing initiative, outsourcing

strategies, zero-overhead-growth philosophy, cash flow from operations

and cash management, tax, foreign currency hedging and risk management


-- our ability to realize the anticipated benefits (including our

projections concerning future revenue and operating margin increases)

        from our multi-year restructuring initiatives or other strategic
        initiatives on the time schedules or in the amounts that we expect,
        and our plans to invest these anticipated benefits ahead of future
    --  the possibility of business disruption in connection with our

multi-year restructuring initiatives or other strategic initiatives;

-- our ability to realize sustainable growth from our investments in our

brand and the direct selling channel;

-- a general economic downturn or recession in one or more of our

geographic regions, such as North America, and the ability of our

broad-based geographic portfolio to withstand an economic downturn or

recession in one or more particular regions;

-- the inventory obsolescence and other costs associated with our product

line simplification program;

-- our ability to effectively implement initiatives to reduce inventory

levels in the time period and in the amounts we expect;

-- our ability to achieve growth objectives or maintain rates of growth,

        particularly in our largest markets and developing and emerging
    --  our ability to successfully identify new business opportunities and
        identify and analyze acquisition candidates, and our ability to
        negotiate and consummate acquisitions as well as to successfully
        integrate or manage any acquired business;
    --  the effect of political, legal and regulatory risks, as well as

foreign exchange or other restrictions, imposed on us, our operations

        or our Representatives by governmental entities;
    --  our ability to successfully transition our business in China in
        connection with the resumption of direct selling in that market, our
        ability to operate using the direct selling model permitted in that
        market and our ability to retain and increase the number of Active
        Representatives there over a sustained period of time;

-- the effect of economic factors, including inflation and fluctuations

        in interest rates and currency exchange rates, and the potential
        effect of such fluctuations on revenues, expenses and resulting
    --  general economic and business conditions in our markets, including
        social, economic and political uncertainties in Latin America, China,
        Asia Pacific, Central and Eastern Europe and the Middle East;
    --  any consequences of the internal investigation of our China
    --  information technology systems outages, disruption in our supply chain
        or manufacturing and distribution operations, or other sudden
        disruption in business operations beyond our control as a result of

events such as acts of terrorism or war, natural disasters, pandemic

        situations and large scale power outages;
    --  the risk of product or ingredient shortages resulting from our
        concentration of sourcing in fewer suppliers;
    --  the quality, safety and efficacy of our products;
    --  the success of our research and development activities;
    --  our ability to attract and retain key personnel and executives;
    --  competitive uncertainties in our markets, including competition from
        companies in the cosmetics, fragrances, skin care and toiletries
        industry, some of which are larger than we are and have greater
    --  our ability to implement our Sales Leadership program globally, to
        generate Representative activity, to increase Representative

productivity, to improve Internet-based tools for our Representatives,

        and to compete with other direct selling organizations to recruit,
        retain and service Representatives;
    --  the impact of the seasonal nature of our business, adverse effect of

rising energy, commodity and raw material prices, changes in market

trends, purchasing habits of our consumers and changes in consumer

preferences, particularly given the global nature of our business and

the conduct of our business in primarily one channel;

-- our ability to continue to help offset higher commodity costs through

        the savings and benefits from our strategic initiatives, strategic
        price increases and holding cost growth below our revenue growth;
    --  our ability to protect our intellectual property rights;
    --  the risk of an adverse outcome in our material pending and future
    --  our ratings and our access to financing and ability to secure
        financing at attractive rates; and

-- the impact of possible pension funding obligations, increased pension

expense and any changes in pension regulations or interpretations

thereof on our cash flow and results of operations.

    Additional information identifying such factors is contained in Item 1A of
our Annual Report on Form 10-K for the year ended December 31, 2007, filed
with the U.S. Securities and Exchange Commission.  We undertake no obligation
to update any such forward-looking statements.

                                 AVON PRODUCTS, INC.
                         (In millions, except per share data)

                         Three months ended Percent Nine months ended Percent
                            September 30     Change    September 30    Change
                         ------------------ ------- ----------------- -------
                           2008      2007             2008     2007
                         --------  --------         -------- --------

    Net sales            $2,618.7  $2,326.1    13%  $7,807.6 $6,795.8    15%
    Other revenue            26.0      23.0             74.9     67.4
                         --------  --------         -------- --------
      Total revenue       2,644.7   2,349.1    13%   7,882.5  6,863.2    15%

    Cost of sales(1)        975.0     889.0          2,892.1  2,642.6
    Selling, general
     and administrative
     expenses (1)         1,372.6   1,236.6          4,023.2  3,572.4
                         --------  --------         -------- --------
      Operating profit      297.1     223.5    33%     967.2    648.2    49%
                         --------  --------         -------- --------

    Interest expense         24.6      29.2             76.8     83.8
    Interest income         (10.1)    (10.2)           (27.9)   (32.8)
    Other expense
     (income), net            3.4      (3.2)            16.1     (1.4)
                         --------  --------         -------- --------
      Total other
       expenses              17.9      15.8             65.0     49.6

    Income before taxes
     and minority
     interest               279.2     207.7    34%     902.2    598.6    51%
    Income taxes (2)         54.5      68.6            254.3    195.2
                         --------  --------         -------- --------

    Income before
     minority interest      224.7     139.1            647.9    403.4
    Minority interest        (2.1)      0.0             (5.0)    (1.6)
                         --------  --------         -------- --------
      Net income           $222.6    $139.1    60%    $642.9   $401.8    60%
                         ========  ========         ======== ========

    Earnings per share:
    Basic                    $.52      $.32    63%     $1.51     $.92    64%
                         ========  ========         ======== ========
    Diluted                  $.52      $.32    63%     $1.49     $.92    62%
                         ========  ========         ======== ========

    Average shares
    Basic                  425.74    430.03           426.36   435.13
    Diluted                429.75    433.03           430.14   438.38
    (1) For the three and nine months ended September 30, 2008, costs to
implement restructuring initiatives impacted cost of sales by $2.6, and $2.9,
respectively, and selling, general and administrative expenses by $11.8 and
$50.3, respectively. For the three and nine months ended September 30, 2007,
costs to implement restructuring initiatives impacted cost of sales by ($0.4)
and $0.3, respectively, and selling, general and administrative expenses by
$27.6 and $57.1, respectively.

(2) For the three and nine months ended September 30, 2008, income taxes includes net favorable impacts of $38.0 resulting from an audit settlement, which was partially offset by the establishment of a valuation allowance against deferred tax assets relating to loss carryforwards.

                                AVON PRODUCTS, INC.
                                   (In millions)

                                                  Sep 30      Dec 31
                                                   2008        2007
                                                 --------    --------

    Cash, including cash equivalents               $967.0      $963.4
    Accounts receivable, net                        704.4       795.0
    Inventories                                   1,236.8     1,041.8
    Prepaid expenses and other                      898.1       715.2
                                                 --------    --------
    Total current assets                          3,806.3     3,515.4

    Property, plant and equipment, net            1,372.1     1,278.2
    Other assets                                    950.2       922.6
                                                 --------    --------
    Total assets                                  6,128.6     5,716.2
                                                 ========    ========

    Debt maturing within one year                   732.4       929.5
    Accounts payable                                728.8       800.3
    Other current liabilities                     1,186.7     1,323.6
                                                 --------    --------
    Total current liabilities                     2,647.9     3,053.4

    Long-term debt                                1,677.7     1,167.9
    Other non-current liabilities                   743.8       783.3
    Total shareholders' equity                    1,059.2       711.6
                                                 --------    --------
    Total liabilities and shareholders' equity   $6,128.6    $5,716.2
                                                 ========    ========

                               AVON PRODUCTS, INC.
                                  (In millions)

                                                           Nine Months Ended
                                                              September 30
                                                            2008        2007


Cash Flows from Operating Activities:

    Net income                                            $642.9      


Depreciation and amortization 143.0


Provision for doubtful accounts 149.1


Provision for obsolescence 54.2


      Share-based compensation                              46.5        48.1
      Deferred income taxes                                  8.7        (8.1)
      Other                                                 33.1        27.4

Changes in assets and liabilities:

Accounts receivable (63.8)


Inventories (262.6)


Prepaid expenses and other (183.5)


      Accounts payable and accrued liabilities            (178.8)       


Income and other taxes (49.2)


Noncurrent assets and liabilities (36.9)


                                                          -------     ------- Net cash provided by operating activities              302.7       


Cash Flows from Investing Activities:

    Capital expenditures                                  (238.3)     


Disposal of assets 8.5


Other investing activities (33.8)




    Net cash used by investing activities                 (263.6)     


Cash Flows from Financing Activities:

    Cash dividends                                        (262.3)     


Total debt, net change 294.9


    Repurchase of common stock                            (171.4)     


Proceeds from exercise of stock

     options, net of excess tax benefits                    93.1       




    Net cash used by financing activities                  (45.7)     


Effect of exchange rate changes on

     cash and cash equivalents                              10.2       




    Net increase (decrease) in cash and cash equivalents    $3.6     $(358.4)
                                                          =======    ========

                                AVON PRODUCTS, INC.
                               SUPPLEMENTAL SCHEDULE
                                   (In millions)

                            THREE MONTHS ENDED 9/30/08

                                  REGIONAL RESULTS

                                     In Local
                          Total      Curr-  Operating      Op.          Active
    $ in Millions      Revenue US$   ency   Profit US$   Margin  Units   Reps
                     --------------- ----- ------------- ------- ------ ------
                              % var. % var.       % var.         % var. % var.
                                vs     vs           vs    2008     vs     vs
                               3Q07   3Q07         3Q07  percent  3Q07   3Q07
                     --------------- ----- ------------- ------- ------ ------
    Latin America    $1,064.8   25%   13%  $207.1   44%    19.4%    0%     4%
    North America(1)    584.5   -3    -4     29.9  -29      5.1    -5      1
    Central & Eastern
     Europe             382.4   17     5     59.3  -13     15.5     2      5
    Western Europe,
     Middle East &
     Africa             315.8    8     6     18.3   73      5.8    -5      6
    Asia Pacific        221.4    6     2     24.3   96     11.0     3      1
    China                75.8   25    13     (7.3) -52     -9.6    -5     98
    Total from
     Operations       2,644.7   13     6    331.6   22     12.5    -1      5
    Global Expenses         -    -     -    (34.5)  29        -     -      -
    Consolidated (1) $2,644.7   13%    6%  $297.1   33%    11.2%   -1%     5%

                               CATEGORY SALES (US$)
                                                                 % var. vs
      (cosmetics/fragrances/skin care/toiletries)     $1,905.3        15%
    Beauty Plus
      (fashion jewelry/watches/apparel/accessories)      474.4        10
    Beyond Beauty
      (home products/gift and decorative products)       239.0         1
                                                      --------    --------
      Net Sales                                       $2,618.7        13%
    Other Revenue                                         26.0        13
                                                      --------    --------
      Total Revenue                                   $2,644.7        13%

                            NINE MONTHS ENDED 9/30/08

                                  REGIONAL RESULTS

                                     In Local
                          Total      Curr-  Operating      Op.          Active
    $ in Millions      Revenue US$   ency   Profit US$   Margin  Units  
                     --------------- ----- ------------- ------- ------ ------
                              % var. % var.       % var.         % var. % var.
                                vs     vs           vs    2008     vs     vs
                               9M07   9M07         9M07  percent  9M07   9M07
                     --------------- ----- ------------- ------- ------ ------
    Latin America    $2,939.8   27%   15%   $515.2   49%   17.5%    4%     7%
    North America (1) 1,811.4   -2    -3     169.0    5     9.3    -3      3
    Central & Eastern
     Europe (2)       1,236.6   21     8     244.0   27    19.7     7     17
    Western Europe,
     Middle East &
     Africa             987.4   13     7      79.5    *     8.1     0      4
    Asia Pacific        666.0    9     0      74.8   51    11.2     1      3
    China               241.3   24    13      (1.6)  59    -0.7     7     75
    Total from
     Operations       7,882.5   15     7   1,080.9   38    13.7     2      9
    Global Expenses         -    -     -    (113.7)  16       -     -      -
     (1)(2)          $7,882.5   15%    7%   $967.2   49%   12.3%    2%     9%

                              CATEGORY SALES (US$)

                                                                 % var. vs
      (cosmetics/fragrances/skin care/toiletries)     $5,646.0        17%
    Beauty Plus
      (fashion jewelry/watches/apparel/accessories)    1,464.9        12
    Beyond Beauty
      (home products/gift and decorative products)       696.7         6
                                                      --------    -------
      Net Sales                                       $7,807.6        15%
    Other Revenue                                         74.9        11
                                                      --------    -------
      Total Revenue                                   $7,882.5        15%

    * Calculation not meaningful

    (1) North America Active Representative growth benefitted from increased
ordering opportunities in Canada as a result of a move from a three-week
campaign cycle to a two-week campaign cycle beginning in the second quarter of

    (2) Central & Eastern Europe Active Representative growth during the first
half of 2008 benefitted from increased ordering opportunities as a result of a
move from a four-week campaign cycle to a three-week campaign cycle in the
second half of 2007.

CONTACT: Renee Johansen, or Anita Bialkowska, both of Avon Products, Inc., +1-212-282-5320/