* Net loss $0.38/share vs $0.33/share year earlier
* Total revenue down 16 pct, Brazil down 33 pct (Adds comments, details, shares)
May 5 (Reuters) - Avon Products Inc reported a surprise quarterly loss as it found fewer takers for its beauty products amid intense competition and economic slowdown in its key markets.
The company, which reported the 18th quarterly fall in revenue on Thursday, sold some businesses, cut costs and outsourced some of its technical operations in its latest turnaround plan announced in January.
Avon sold 80 percent of its North American business to Cerberus Capital for $170 million in December. The private investment firm also bought a 16.6 percent stake in Avon, helping the company in its transformation.
Analysts were still doubtful about Avon’s ability to turn around given its costly business model of direct-selling.
“Before competing for final consumers, Avon has to compete for sales representatives by incurring high advertising expenses for attracting talent and ... incurring costs related to training...,” research firm Trefis said in a pre-earnings note.
Avon, which has a network of about 6 million representatives actively selling its products door-to-door, said the number fell 1 percent in the latest quarter.
“Direct selling is a good place to be, and we still feel very strongly about it,” Chief Executive Sheri McCoy said on a conference call with analysts.
First-quarter sales in the beauty business fell 17.5 percent to $951.4 million, hurt by the company’s exposure to troubled markets such as South America and a strong dollar.
Sales in Brazil dropped 33 percent as newer taxes on cosmetics made Avon’s products more expensive.
Avon’s total revenue fell 16 percent to $1.31 billion. On a constant dollar basis, revenue rose 2 percent.
The average value of the dollar rose 2.6 percent in January-March this year compared with a year earlier.
Net loss attributable to the company widened to $165.9 million, or 38 cents per share, in the quarter ended March 31 from $147.3 million, or 33 cents per share, a year earlier.
Excluding items, Avon reported a loss of 7 cents per share.
Analysts on average had expected earnings of 2 cents per share and revenue of $1.29 billion, according to Thomson Reuters I/B/E/S.
The company’s shares fell as much as 8 percent before reversing course to trade up 4.5 percent on Thursday. Up to Wednesday, the stock had risen 77 percent since the company announced its turnaround plan. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Maju Samuel and Don Sebastian)