Avon Products Inc. Investor Relations

Avon Products Inc. (ticker: AVP, exchange: New York Stock Exchange (.N)) News Release - 3/28/2003

Avon Expects First Quarter Earnings to Exceed Prior Guidance by $.01 Per Share

NEW YORK, Mar 28, 2003 /PRNewswire-FirstCall via COMTEX/ --

Strong Sales Growth of 6-7% Expected, Driven by Double-Digit Gains in Units, Active Representatives Company On Track for $2.55 E.P.S. in 2003

Avon Products, Inc. (NYSE: AVP) today said that it expects earnings per share in the first quarter of 2003 to exceed prior guidance, and that the company is on track for its fourth consecutive year of double-digit growth in local currency sales and earnings before unusual items.

Avon said it expects earnings in the first quarter to be $.41 cents per share -- $.01 per share ahead of guidance provided by the company in February -- after absorbing approximately $.05 per share in the quarter related to the previously announced repositioning of the beComing brand. Earnings in last year's first quarter were $.40 per share.

The company said that sales in the first quarter are forecast to increase 11-12% in local currency terms, or 6-7% in dollars, driven by double-digit gains in units and the number of active Representatives, with increases in all geographic regions.

Excluding the costs of beComing, operating profit is forecast to be up 15-16% and operating margin up approximately 100 basis points. Reported operating profit in the quarter is expected to rise 5-6% and operating margin should be about flat.

Avon will discuss the outlook for the quarter and full-year 2003 and provide an update on its strategic initiatives at a company-hosted investor meeting today, March 28, beginning at 9:00 a.m. New York time. The meeting will be webcast live and can be accessed from the company's investor website, www.avoninvestor.com.

Commenting on the outlook for the first quarter, Andrea Jung, Avon's chairman and chief executive officer, said, "We're pleased that Avon continues to generate robust top-line growth on top of the excellent results in 2002.

"Our international regions are performing at or above our expectations. Europe again is delivering stellar results, with dollar-denominated sales and operating profit forecast to increase in the range of 35% and 50%, respectively. Latin America is looking to generate strong double-digit gains in local currency sales and operating profit, however after currency translation dollar sales should be down about 10% and operating profit up slightly. Asia is having a very strong quarter, and is on track to post dollar-denominated gains of 15-20% in sales and nearly 50% in operating profit.

"In the U.S., we expect sales to be up slightly, due to the temporary disruption to our business caused by severe snow storms and war-related consumer uncertainty in recent weeks. However, active Representatives in the quarter are expected to increase a very solid 3%, reflecting record recruiting levels, and sales of beauty products should be up 6-7%, underscoring the continued strength in the fundamentals of our U.S. business. U.S. operating profit should be up 5-6%, and operating margin should grow by some 80 basis points, even after a significant increase in strategic investments in the quarter," Ms. Jung said.

Commenting on the full-year 2003 outlook, Ms. Jung said, "We're looking for another double-digit increase in local currency sales as well as earnings per share. In addition, we are on track to deliver accelerated operating margin expansion of 100 basis points in 2003, versus the 50 basis points achieved in 2002, as the benefits of our Business Transformation initiatives continue to build. We expect to more than double incremental strategic investments to over $50 million for the year and we look for excellent cash flow in the range of $650-700 million, versus $565 million in 2002. We remain comfortable with our previous earnings guidance of $2.55 per share, which would make 2003 our fourth consecutive year of double-digit growth in earnings before unusual items," she said.

Avon is scheduled to report financial results for the first quarter of 2003 on April 25.

Avon is the world's leading direct seller of beauty and related products, with $6.2 billion in annual revenues. Avon markets to women in 143 countries through 3.9 million independent sales Representatives. Avon product lines include such recognizable brands as Avon Color, Anew, Skin-So-Soft, Advance Techniques Hair Care, beComing and Avon Wellness. Avon also markets an extensive line of fashion jewelry and apparel. More information about Avon and its products can be found on the company's web site www.avon.com.

Cautionary Statement under the Private Securities Litigation Reform

Act of 1995

Statements in this release, which are not historical facts or information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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 the Company 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 following: general economic and business conditions in the Company's markets, including economic and political uncertainties in Latin America; the Company's ability to implement its business strategy and its Business Transformation initiatives, including the integration of similar activities across markets to achieve efficiencies; the Company's ability to achieve anticipated cost savings and its profitability and growth targets; the impact of substantial currency fluctuations in the Company's principal foreign markets and the success of the Company's foreign currency hedging and risk management strategies; the impact of possible pension funding obligations and increased pension expense on the Company's cash flow and results of operations; the effect of legal and regulatory proceedings, as well as restrictions imposed on the Company, its operations or its Representatives by foreign governments. The Company's ability to successfully identify new business opportunities; the Company's access to financing; and the Company's ability to attract and retain key executives. Additional information identifying such factors is contained in the Company's Form 10-K report for the year ended December 31, 2002, filed with the SEC. The Company undertakes no obligation to update any such forward-looking statements.

AVON PRODUCTS, INC. RECONCILIATION SCHEDULE

The release includes a statement that "_the company is on track for its fourth consecutive year of double-digit growth in local currency sales and earnings before unusual items," which is based on non-GAAP EPS amounts. The table below reconciles GAAP and non-GAAP EPS growth for each year of the four years.



         EPS                   2003   2002       2001      2000      1999
         As Reported (GAAP)   $2.55  $2.22      $1.85     $2.02     $1.12
           % vs. prior year      15%    20%        -8%       80%

         Special Charge          --   0.12 (A)   0.28 (B)    --      0.43 (G)

         Reversal of 2001
          Charge                 --  (0.02)(A)     --        --        --

         Sears Settlement        --     --      (0.05)(C)    --        --

         Argentina Tax
          Settlement             --     --       0.01 (D)    --        --

         Asset writedowns/
          reorganization
          costs                  --     --         --      0.02 (E)    --

         Tax Refund              --     --         --     (0.16)(F)    --

         Asset Impairment
          Charge                 --     --         --        --      0.09 (H)

         Adjusted             $2.55  $2.32      $2.09     $1.88     $1.63
           % vs. prior year      10%    11%        11%       15%


    (A) The Company recorded a Special Charge of $43.6 pretax ($30.4
        after-tax; $0.12 diluted EPS) related to the Company's Business
        Transformation initiatives. Also, the Company recorded a benefit of
        $7.3 pretax ($5.2 after-tax; $0.02 diluted EPS) from an adjustment to
        the special charge for Business Transformation initiatives recorded in
        the fourth quarter of 2001. The net effect of the two unusual items is
        a charge of $36.3 pretax ($25.2 after-tax; $0.10 diluted EPS), of
        which $2.0 pretax is included in Cost of Sales.

    (B) The Company recorded a Special Charge of $94.9 pretax, primarily
        related to facility closures and workforce reduction programs. A Cost
        of Sales charge of $2.5 relating to inventory write-downs was
        associated with facility closures. 2001 Special Charges totaled $97.4
        pretax ($68.3 after-tax; $0.28 diluted EPS).

    (C) Includes contract settlement gain, net of related expenses, of
        $25.9 pretax ($15.7 after-tax; $0.06 diluted EPS), partially offset by
        estimated lost profits of $4.3 pretax ($2.6 after-tax; $0.01 diluted
        EPS), which are included in the $2.09 EPS, adjusted for unusual items.

    (D) Relates to the settlement of a disputed excise tax liability in
        Argentina of $6.4 pretax ($3.4 after-tax; $0.01 diluted EPS).

    (E) The Company incurred expenses of $8.9 pretax ($5.4 after-tax; $0.02
        diluted EPS) related to asset write-downs and executive reorganization
        costs.

    (F) The results of operations include a tax benefit of $40.1 ($0.16
        diluted EPS) related to a U.S. income tax refund.

    (G) The Company recorded a Special Charge of $136.4 pretax ($111.9 after-
        tax; $0.43 diluted EPS) for the Company's Business Process Redesign
        program, of which $46.0 pretax was included in Cost of Sales.

    (H) The Company recorded an Asset Impairment Charge of $38.1 pretax
        ($24.0 after-tax; $0.09 diluted EPS) related to the write-off of an
        Order Management Software System.

                 AVON PRODUCTS, INC. RECONCILIATION SCHEDULE

The release includes a statement that "_we are on track to deliver accelerated operating margin expansion of 100 basis points in 2003, versus the 50 basis points achieved in 2002_" which is based on non-GAAP operating margin in 2002. The table below reconciles GAAP to non-GAAP operating margin growth for each of the two years.



                                                 OPERATING MARGIN

                                            2003       2002          2001
            As Reported (GAAP)              15.6%      14.0%         12.9%
                 % vs. prior year        1.6 pts    1.1 pts

            Special Charge                    --        0.7 (A)       1.6 (B)

            Reversal of 2001 Charge           --       (0.1)(A)        --

            Sears Settlement                  --         --          (0.4)(C)

            Adjusted                        15.6%      14.6%         14.1%
                 % vs. prior year        1.0 pts    0.5 pts


    (A) The Company recorded a Special Charge of $43.6 pretax ($30.4
        after-tax; $0.12 diluted EPS) related to the Company's Business
        Transformation initiatives. Also, the Company recorded a benefit of
        $7.3 pretax ($5.2 after-tax; $0.02 diluted EPS) from an adjustment to
        the special charge for Business Transformation initiatives recorded in
        the fourth quarter of 2001. The net effect of the two unusual items is
        a charge of $36.3 pretax ($25.2 after-tax; $0.10 diluted EPS), of
        which $2.0 pretax is included in Cost of Sales.

    (B) The Company recorded a Special Charge of $94.9 pretax, primarily
        related to facility closures and workforce reduction programs. A Cost
        of Sales charge of $2.5 relating to inventory write-downs was
        associated with facility closures. 2001 Special Charges totaled
        $97.4 pretax ($68.3 after-tax; $0.28 diluted EPS).

    (C) Includes contract settlement gain, net of related expenses, of $25.9
        pretax ($15.7 after-tax; $0.06 diluted EPS), partially offset by
        estimated lost profits of $4.3 pretax ($2.6 after-tax; $0.01 diluted
        EPS), which are included in the $2.09 EPS, adjusted for unusual items.

SOURCE Avon Products, Inc.

CONTACT:
Media, Victor Beaudet
1-212-282-5344
Brian Martin
1-212-282-5103
or Investors
Renee Johansen
or Rob Foresti
1-212-282-5320
all of Avon Products