Avon Products Inc. (AVP) reported first-quarter earnings of 33 cents per share. Earnings were a penny above the Zacks Consensus Estimate of 32 cents and up 10% from 30 cents reported in the prior-year period.

Total revenue increased 14.0% year over year to $2.5 billion, attributable to a 6% benefit from foreign currency translations, 4% benefit from volume and a 4% benefit price/mix. The number of active representatives grew 6% during the quarter.

Sales of Beauty products increased 14%, due to increases across all the categories. Color Cosmetics increased 23%, Fragrance increased 21%, Personal Care increased 11% and Skin Care grew 1%.

In North America, sales fell 2% as units sold were flat year over year, while active representatives were up 2%. In Latin America, sales grew 22% as units sold rose 4% and active representatives grew 7%.

Revenue in Western Europe, the Middle East and Africa increased 23%, due to a 15% growth in units sold and 17% growth in active representatives. Sales in Central and Eastern Europe fell 28% as units sold and active representatives both increased 12%.

Quarterly sales growth in Asia Pacific increased 10%, as units sold were up 4% year over year and active representatives rose 6%. Sales in China decreased 31%, primarily due to a 31% decline in units sold. However, active representatives for the quarter declined 25%.

Gross margin for the quarter contracted 99 basis points (bps) to 61.9% versus 62.9% in the comparable prior-year quarter. The decline in gross margin was primarily attributable to Venezuelan special items. The operating margin for the quarter was almost flat year over year, increasing marginally by 4 bps to 7.7%.

For the first quarter of 2010, net cash provided by operating activities increased to $17 million, compared to a use of $61 million in the prior-year quarter. The improvement in cash flow was primarily due to improved working capital management. At the end of the quarter, Avon’s total debt increased $153 million to $2.6 billion.

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