UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

MICHAEL CASCIO, Individually and On Behalf ofAll Others Similarly Situated, CIVIL ACTION NO .

Plaintiff,

vs. CLASS ACTION COMPLAINT

AVON PRODUCTS, INC ., ANDREA JUNG,SUSAN J. KROPF and ROBERT J. CORTI ,

Defendants.JURY TRIAL DEMANDE D

Plaintiff, Michael Cascio, ("Plaintiff') alleges the following based upon the investigation of

Plaintiffs counsel, which included, among other things, a review of the defendants' public

documents, conference calls and announcements made by defendants, United States Securities and

Exchange Commission ("SEC") filings, wire and press releases published by and regarding Avon

Products, Inc . ("Avon" or the "Company") securities analysts' reports and advisories about the

Company, and information readily obtainable on the Internet .

NATURE OF THE ACTION AND OVERVIE W

1 . This is a federal class action on behalf of persons who purchased the securities o f

Avon between February 1, 2005 and July 18, 2005, inclusive (the "Class Period"), seeking to pursue

remedies under the Securities Exchange Act of 1934 (the "Exchange Act") .

2 . Avon engages in the manufacture and marketing of beauty and related product s

primarily in North America, Latin America, Europe, and Asia Pacific .

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3. The complaint alleges that defendants' Class Period representations regarding Avo n

were materially false and misleading when made for the following reasons : 1) that the Company

knew that the hybrid direct selling/retail model could hurt its existing business in China, as kiosk

owners, who paid substantial amounts for their businesses, resisted the introduction ofcommissione d

representatives into their territory; (2) that the Company's sustained revenue growth in expandin g

markets, such as Russia and Central Europe, had slowed down dramatically due to increase d

competition ; and 3) as such, defendants' positive statements regarding the Company's outlook were

lacking in any reasonable basis when made .

4. On July 19, 2005, Avon announced that its revenue for the second quarter 2005 wa s

below expectation . On news of this , shares of Avon fell $5.30 per share , or 14.48 percent , on July

19, 2005, to close at $31 .30 per share .

JURISDICTION AND VENUE

5. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) o f

the Exchange Act, (15 U .S.C . §§ 78j(b) and 78t(a)), and Rule 10b-5 promulgated thereunder (1 7

C.F.R. §240.10b-5) .

6. This Court has ju risdiction over the subject matter of this action pursuant to §27 of

the Exchange Act (15 U.S.C. §78aa) and 28 U.S .C. § 1331 .

7. Venue is proper in this Judicial District pursuant to §27 of the Exchange Act, 1 5

U.S.C . § 78aa and 28 U .S.C. § 1391(b) . Many of the acts and transactions alleged herein , including

the preparation and dissemination of materially false and misleading information, occurred i n

substantial part in this Judicial District. Additionally, the Company maintains a principal executive

office in this Judicial District .

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8. In connection with the acts, conduct and other wrongs alleged in this complaint ,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce ,

including but not limited to, the United States mails, interstate telephone communications and th e

facilities of the national securities exchange .

PARTIES

9. Plaintiff, Michael Cascio, as set forth in the accompanying certification, incorporate d

by reference herein, purchased Avon securities at artificially inflated prices during the Class Perio d

and has been damaged thereby .

10. Defendant Avon is a New York corporation with its principal executive office s

located at 1345 Avenue of the Americas, New York, NY 10105-0196 .

11 . Defendant Andrea Jung ("Jung") was, at all relevant times, the Company's Chie f

Executive Officer and a Director .

12. Defendant Susan J . Kropf ("Kropf ') was, at all relevant times, the Company' s

President and Chief Operating Officer .

13 . Defendant Robert J . Corti ("Corti") was, at all relevant times , the Company's Chie f

Financial Officer .

14. Defendants Jung, Kropf, and Corti are collectively referred to hereinafter as th e

"Individual Defendants ." The Individual Defendants, because of their positions with the Company ,

possessed the power and authority to control the contents of Avon's quarterly reports , press release s

and presentations to securities analysts, money and portfolio managers and institutional investors ,

i .e ., the market. Each defendant was provided with copies of the Company's reports and pres s

releases alleged herein to be misleading prior to or shortly after their issuance and had the ability and

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C

opportunity to prevent their issuance or cause them to be corrected . Because of their positions and

access to material non -public information available to them but not to the public, each of these

defendants knew that the adverse facts specified herein had not been disclosed to and were bein g

concealed from the public and that the positive representations which were being made were the n

materially false and misleading. The Individual Defendants are liable for the false statement s

pleaded herein, as those statements were each "group-published" information, the result of th e

collective actions of the Individual Defendants .

SUBSTANTIVE ALLEGATIONS

Background

15. Avon engages in the manufacture and marketing of beauty and related product s

primarily in North America, Latin America, Europe, and Asia Pacific . Its products are classified int o

three product categories: Beauty, which consists of cosmetics, fragrances, skin care, and toiletries ;

Beauty Plus, which includes fashion j ewelry, watches, apparel, and accessories ; and Beyond Beauty,

whichcompriseshome products, gift and decorative products, candles, and toys . The Company sells

its products principally through a combination of direct selling and marketing by independent Avon

representatives, as well as through its consumer Web site, avon.com .

Materially False And MisleadingStatements Issued During The Class Period

16. On February 1, 2005, Avon issued a press release entitled "Avon Repo rts Record

Fourth Quarter EPS of $ .6 1, Up 11% ." Therein, the Company, in relevant part, stated :

2005 Outlook

As announced in December, Avon expects to deliver another yearof standout growth in 2005 , reflecting ongoing strength in itsinternational operations . Local-currency total revenues are

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projected to grow 10% year over year, driven by double-digit gains inunits and active Representatives, with Beauty growth outpacingoverall revenue growth. Operating margin is forecast to expand 50-80 basis points, and earnings per share are expected to be in the rangeof $1 .95-$2 .00, with a 2005 effective tax rate of approximately 31 % .Additionally, cash flow from operations is projected to reach a record$1 billion this year.

For 2005, International operations are projected to post another yearof growth on growth, with revenue increasing mid-teens andoperating profit expected to grow over 20%, on particular strength inthe company's leading growth markets of Russia, China, Turkey andBrazil . Europe is expected to again be the company's growthleader-with revenue up in the low-20% range and operating profitgrowth in the mid-20% range . Latin America anticipates revenuegrowth in the range of 10% and operating profit growth in the mid-teens . In 2005 Asia Pacific's revenue growth is projected to be inthe low teens, with operating profit in the range of 25% .(Emphasis added.)

17. Also, on February 1, 2005, Avon held a conference c all for investors . During the call,

defendant Jung made the following comments with respect to the Company's Chinese operations :

The standout performer for the region, for the quarter, and for the fullyear was China . Fourth quarter sales grew 46%, operating profitincreased more than 60% after significant investments of our marketshare .

China's full-year 2004 sales increased to nearly 225 million and itsoperating margin improved 300 basis points . Our proposition andopportunity in China continue to be extremely compelling .Irrespective of the timing of the opening of direct selling, weexpect our 2005 growth in that market to be in line with that of2004 , which would put China 's revenue well over $300 millionthis year .

As you know, the industry is still awaiting the final government'sregulations for the resumption of direct selling. When issued, webelieve that this new framework will benefit both the Chineseconsumer and the direct selling industry . Very importantly, as Iknow, we've talked about before ; we feel that Avon is very wel l

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positioned with our current business model . We believe that our6,000 beauty boutiques will continue to be a powerful competitiveadvantage. (Emphasis added . )

18 . On March 2, 2005, Avon filed its annual report with the SEC on Form 10-K . The

Company's Form 10-K was signed by Individual Defendants and reaffirmed the Company's

previously announced financial results .

19 . On March 17, 2005, Avon issued a press release entitled "First-Quarter EPS Expected

to be $ .35; Revenue Forecast to Increase in the Range of 8%." Therein, the Company, in relevant

part, stated :

Avon Products, Inc. (NYSE: AVP) today reaffirmed its earningsoutlook for the first quarter and full-year 2005, with earnings in thefirst quarter of 2005 expected to increase 13% to $ .35 per share, andfull-year earnings projected to be in the range of $1 .95-$2.00 pershare .

Andrea Jung, Avon's chairman and chief executive officer, said,"Looking ahead, on a full-year basis, we remain very comfortablewith our earlier earnings-per-share projection in the range of$1 .95-$2 .00. This outlook reflects our previously announced U .S .repositioning , strength in our international portfolio andcontinued opportunities associated with the next generation ofBusiness Transformation . "(Emphasis added.)

20. On April 8, 2005, Avon issued a press release entitled "Avon Starts Direct Sellin g

Test With the State's Approval ." Therein, the Company, in relevant part, stated :

The Chinese Ministry of Commerce and the State Administration forIndustry and Commerce has officially approved Avon Products(China) Co., Ltd. to be the first company to test direct selling inBeijing, Tianjin, and Guangdong Province in April .

Andrea Jung, CEO of Avon Products Inc. (NYSE: AVP), said: "Weare so excited that we have received the formal approval from theChinese government . We are extremely honored of this

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opportunity as it equally shows the government's confidence andtrust on Avon as a responsible and reliable direct sellingcompany in China. We will do our part and are committed todeliver the objective and expectation of the government and lookforward to direct selling regulation . "

SK Kao, President of Avon China rejoined : "The objective of the testis to help the government find a suitable direct selling model thatwould fit the needs ofthe Chinese consumers, promote social stabilityand help protect consumers against illegal practices known as'Chuan-xiao' . We will keep doing what is right and responsible . "

Mr. Kao continued : "The direct selling test is a preparation for asuccessful implementation of the direct selling legislation . Avon willstrictly abide by the direct selling law and regulation when they areissued . "(Emphasis added . )

21 . On May 2, 2005, Avon issued a press release entitled "Avon Reports 16% Increase

in First-Quarter Earnings to $ .36 Per Share - Exceeding Expectations ." Therein, the Company, i n

relevant part , stated :

Avon Products , Inc . (NYSE: AVP) today reported earnings for thefirst quarter of 2005 of $ . 36 per share, up 16% from last year'sfirst-quarter earnings of $ .31 per share and $ .01 ahead of expectationsdue to strong operating profit growth .

Avon also raised its previous full-year 2005 earnings outlook to $2 .12-- $2 .17 per share from $1 .95 -- $2.00 per share, reflecting asecond-quarter benefit of approximately $80 million, or about $ .17per share, relating to prior years' tax-audit settlements .

***

First-Quarter 2005 Regional Highlights

Topline growth in Europe in the first quarter was impacted by theU.K., where revenues were 3% lower compared with the year-agoperiod as the U.K. anniversaried the highly successful launch o f

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Anew Clinical Line and Wrinkle Corrector . Revenues in Central andEastern Europe increased 27% in the quarter, with Russia up 24% ontop of extraordinary 89% growth in the prior-year quarter .

The Asia Pacific region posted first-quarter revenue growth of 10%in dollars and 8% in local currency, driven by gains in units andactive Representatives of 16% and 12%, respectively . Operatingprofit rose 20% and operating margin increased to 18.5%, up150-basis points year over year. China, Avon 's largest long-termgrowth opportunity , was again the biggest contributor to theregion's growth , with revenue up nearly 40%. In April 2005,Avon China was approved as the first company to conduct adirect -selling test in that market.

Second-Quarter Outlook

Avon said that revenue growth in the second-quarter 2005 shouldaccelerate ahead of the first quarter, with dollar-denominated andlocal-currency growth expected to be in the ranges of 10% and 6%,respectively . Operating profit is forecast to increase approximately inline with revenue growth, including an acceleration of consumerinvestments in emerging markets as well as funding for the Chinadirect-selling test .

Avon said that it expects U.S . results in the second quarter to be inline with those of the first quarter as it continues to reposition theU.S. business for improved performance in the second half of thisyear and a return to profitable growth in 2006 . With regard to thesecond-quarter outlook for each international region, the companysaid that Europe's revenue is projected to grow in the high teens, withoperating profit increasing slightly ahead of revenue . Latin America'srevenue and operating profit should each increase in the mid-teens .Asia Pacific's revenue is expected to be up double-digits whileoperating profit should grow in the high-single digits .

In addition, Avon said that second-quarter earnings are forecast to bein the range of $.66 per share, reflecting a non-cash benefit ofapproximately $80 million, or about $ .17 per share, relating to prioryears' tax-audit settlements. This compares to earnings of $ .49 pershare in last year's second quarter, which included a tax benefit of$.05 per share . The company said that additional tax settlements arepossible during 2005, which could result in further benefits .

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Commenting on the year, Andrea Jung, Avon's chairman and chiefexecutive officer said, "We're pleased with Avon's performance in thefirst quarter, especially given the very challenging year-over-yearcomparisons . Looking ahead, we're projecting that local-currencyrevenue will accelerate, . as increased innovation in our second-halfproduct pipeline drives stronger Beauty sales . Continuing strongresults in our international regions are offsetting U .S. performanceduring this period of repositioning, with our emerging markets onceagain expected to deliver another full year of stand-out revenuegrowth," she said .(Emphasis added.)

22 . On May 3 , 2005, Avon filed its quarterly report with the SEC on Form 10-Q. The

Company's Form 10-Q was signed by defendant Corti and reaffirmed the Company's previousl y

announced financial results .

23. On June 9, 2005, Avon issued a press release entitled "Avon Confirms Intention to

No Longer Provide Mid-quarter Updates ." Therein, the Company, in relevant part, stated :

Avon Products, Inc . (NYSE: AVP) today confirmed its intention tono longer provide mid-quarter updates of its business performance,in line with the practices of a majority of peer companies . Avon saidit expects to release second-quarter results on July 25, 2005, andthird-quarter results on October 28, 2005 .

24. The statements contained in IT 16-23 were materially false and misleading when

made because defendants failed to disclose or indicate the following : 1) that the Company knew that

the hybrid direct selling/retail model could hurt its existing business in China, as kiosk owners, who

paid substantial amounts for their businesses, resisted the introduction of commissione d

representatives into their territory ; (2) that the Company's sustained revenue growth in expanding

markets, such as Russia and Central Europe, had slowed down dramatically due to increase d

competition ; and 3 ) as such, defendants' positive statements regarding the Company's outlook were

lacking in any reasonable basis when made .

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The Truth Begins To Emerge

25 . On July 19, 2005, Avon issued a press release entitled "Avon Reports Second-Quarter

Earnings of $ .69 Per Share, Including $.20 of Tax Benefits, on 6% Revenue Increase ." Therein, the

Company, in relevant part, stated:

Avon Products, Inc. (NYSE: AVP) today reported that earnings in thesecond quarter 2005 increased to $ .69 per share, including a$.20-per-share tax benefit ($ .03 per share more than initiallyanticipated) primarily from settlements of prior-year audits that werecompleted in the second quarter. These earnings compare withguidance of $ .66 per share . In the second quarter 2004, earnings were$.49 per share, including a tax benefit of $ .05 per share .

Avon said that revenue in the second quarter 2005 grew 6% (2% inlocal currencies) to $2 .0 billion -- on top of 13% growth in theyear-ago period. Revenue in the quarter was below expectations dueto two factors which each impacted topline growth by approximatelytwo points: an unexpected temporary decline in China as BeautyBoutique owners reacted with concern to the imminent resumption ofdirect selling in that country; and lower-than- anticipated revenuegrowth in Central and Eastern Europe resulting fromunderperformance of several key marketing offers as well as delayedexpansion into new geographies within Russia .

Total Beauty sales in the second quarter 2005 rose 7%, activeRepresentatives grew 6% and units increased 2%, respectively, versusthe prior year. Operating profit increased 6%, in line with revenuegrowth, and operating margin was 17 .3%, including the impact oflower corporate expenses that resulted primarily from the reversal ofaccruals for 2005 performance- based compensation plans . Netincome in the second quarter 2005 was $328.6 million, comparedwith $232.3 million a year ago .

In commenting on the company's second-quarter results, AndreaJung, Avon's chairman and chief executive officer, said, "While theU.S. and Latin America performed in line with our expectations, thesituation in China was clearly unexpected. We are moving rapidly toassure our Beauty Boutique owners that they will have an opportunityto earn as much or more with Avon in our future model, and believe

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this will be a transitional issue . We continue to feel privileged to havebeen chosen as the first company authorized to conduct adirect-selling test and our optimism about the long-term $1 billionopportunity in China remains unchanged. In Central and EasternEurope, where our topline momentum continues to be strong and weremain confident in our beauty leadership position, we havesignificantly enhanced our marketing offering and implementedaggressive plans to accelerate order growth in the back half of theyear . "

Revised Outlook

On a consolidated basis for the third quarter, Avon expects revenuegrowth to accelerate to the high-single digits (mid-single digits inlocal currencies) . Operating profit is forecast to be down slightly . EPSis expected to be in the range of $ .34-$.36, compared with 2004'sthird quarter of $.37 per share.

In terms of regional performance for the third quarter, the companysaid that the U.S. revenue trendline is improving, with revenueexpected to be down slightly from the prior year . U.S. operating profitis forecast to decrease mid-to-high teens, with the majority of thedecline due to reversal of 2004 bonus accruals in the prior year .Europe's revenue is projected to increase double digits and operatingprofit is forecast to rise in the mid-single digits . In Latin America,revenue is anticipated to grow in the high teens and operating profitis forecast to increase around 10% . Asia Pacific's revenue is expectedto be up at least mid-single digits while operating profit for thatregion is projected to be down high-single digits, including a morethan doubling of advertising in China .

Looking ahead to the second half, the company said that it anticipatesrevenue growth of 7-8% (6-7% in local currency), double thefirst-half local- currency growth rate, but below the company'sprevious expectation . As a result, Avon expects full-year earnings tobe in the range of $2.03-$2.08, up from 2004 earnings of $1 .77 pershare. This EPS guidance reflects the second- quarter tax benefit of$.20 per share, partially offset by an impact of $ .02 per share from arevised higher effective tax rate in the second half. The company saidthat additional tax settlements are possible during 2005, which couldresult in further benefits. Additionally, cash flow from operations isprojected to be approximately $900 million for the full year .

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Commenting on the company's revised outlook, Ms . Jung said : "Weare encouraged by some recent trends in the U.S . In addition, weexpect our current recovery actions to improve performances in Chinaand Central and Eastern Europe as we move through the balance ofthe year. If all of these actions and trends play out in the back half ofthe year, we can achieve the top end of our earnings projection .However, given the volatility we've experienced in recent quarters ona number of fronts, we believe that it is prudent to allow for furtherrisk, thus the breadth of our forecast ."

Ms. Jung added, "Looking ahead, the broad strength of Avon's globalportfolio remains a significant competitive advantage and we remainconfident in Avon's unique growth and transformation strategies.Over the long term, we expect to deliver high-single-digitlocal-currency revenue growth, enabled by a greater step-up instrategic spending support and thoughtful trade-off between ourrevenue growth and margin targets, including evaluation of ourenterprise expense base. We remain confident that Avon's revenuegrowth will continue to well outpace the overall Beauty market,supported by appropriate levels of investment while also deliveringmargin expansion over the long term."

26. On news of this, shares of Avon fell $5 .30 per share, or 14 .48 percent, on July 19 ,

2005 , to close at $31 .30 per share.

PLAINTIFF'S CLASS ACTION ALLEGATION S

27. Plaintiff brings this action as a class action pursuant to Federal Rule of Civi l

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased the securities

of Avon between February 1, 2005, and July 18, 2005, or the Class Period, and who were damaged

thereby. Excluded from the Class are defendants, the officers and directors of the Company, at all

relevant times, members of their immediate families and their legal representatives, heirs, successors

or assigns and any entity in which defendants have or had a controlling interest .

28. The members of the Class are so numerous that joinder of all members is imprac-

ticable . Throughout the Class Pe riod, Avon' s securities were actively traded on the New York Stock

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Exchange ("NYSE") . While the exact number of Class members is unknown to Plaintiff at this tim e

and can only be ascertained through appropriate discovery, Plaintiff believes that there are hundreds

or thousands ofinembers in the proposed Class . Record owners and other members of the Class may

be identified from records maintained by Avon or its transfer agent and may be notified of the

pendency ofthis action by mail, using the form ofnotice similar to that customarily used in securitie s

class actions .

29 . Plaintiff's claims are typical of the claims of the members of the Class, as al l

members of the Class are similarly affected by defendants' wrongful conduct in violation of federa l

law that is complained of herein .

30. Plaintiff will fairly and adequately protect the interests of the members of the Clas s

and has retained counsel competent and experienced in class and securities litigation .

31 . Common questions of law and fact exist as to all members of the Class an d

predominate over any questions solely affecting individual members of the Class . Among the

questions of law and fact common to the Class are :

(a) whether the federal securities laws were violated by defendants' acts as allege d

herein;

(b) whether statements made by defendants to the investing public during the

Class Period misrepresented material facts about the business, operations and management o f

Avon; and

(c) to what extent the members of the Class have sustained damages and the

proper measure ofdamages .

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32. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable . Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden o f

individual litigation make it impossible for members of the Class to individually redress the wrongs

done to them. There will be no difficulty in the management of this action as a class action .

SCIENTER ALLEGATIONS

33 . As alleged herein, defendants acted with scienter in that defendants knew that the

public documents and statements issued or disseminated in the name of the Company wer e

materially false and misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced in

the issuance or dissemination of such statements or documents as primary violations of the federal

securities laws . As set forth elsewhere herein in detail, defendants, by virtue of their receipt o f

information reflecting the true facts regarding Avon, their control over, and/or receipt and/or

modification of Avon's allegedly materially misleading misstatements and/or their associations with

the Company which made them privy to confidential proprietary information concerning Avon,

participated in the fraudulent scheme alleged herein .

34. During the Class Period and with the Company's stock trading at artificially inflate d

prices , company insiders sold 624,224 shares for gross proceeds of $27,658,148 as evidenced by th e

following chart :

Date # of Shares Proceeds

Stanley C. Gault 02/03/2005 200,000 @ $44 .431 $8,886,20 0

Robert J. Corti 02/03/2005 204,224 @ $44 .429 $9,073,468

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Susan J. Kropf 02/09/2005 220,000 @ $44 .084 $9 ,698,480

UNDISCLOSED ADVERSE FACTS

35. The market for Avon's securities was open, well-developed and efficient at al l

relevant times . As a result of these materially false and misleading statements and failures t o

disclose, Avon's securities traded at artificially inflatedprices during the Class Period . Plaintiff and

other members of the Class purchased or otherwise acquired Avon securities relying upon th e

integrity of the market price of Avon's securities and market information relating to Avon, and have

been damaged thereby.

36. During the Class Period, defendants materially misled the investing public, thereb y

inflating the price of Avon' s securities, by publicly issuing false and misleading statements an d

omitting to disclose material facts necessary to make defendants' statements, as set forth herein, no t

false and misleading . Said statements and omissions were materially false and misleading in that

they failedto disclose material adverse information and misrepresented the truth about the Company,

its business and operations, as alleged herein .

37. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of th e

damages sustained by plaintiff and other members of the Class . As described herein, during th e

Class Period, defendants made or caused to be made a series of materially false or misleadin g

statements about Avon's business , prospects and operations . These material misstatements an d

omissions had the cause and effect of creating in the market an unrealistically positive assessment

of Avon and its business , prospects and operations, thus causing the Company's securities to be

overvalued and artificially inflated at all relevant times . Defendants' materially false and misleadin g

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statements during the Class Period resulted in plaintiff and other members of the Class purchasin g

the Company's securities at artificially inflated prices, thus causing the damages complained o f

herein .

LOSS CAUSATIO N

38 . Defendants' wrongful conduct, as alleged herein, directly and proximately caused th e

economic loss suffered by Plaintiff and the Class .

39 . During the Class Period, Plaintiff and the Class purchased securities of Avon at

artificially in flated prices and were damaged thereby. The price of Avon's common stock declined

when the misrepresentations made to the market, and/or the information alleged herein to have bee n

concealed from the market, and/or the effects thereof, were revealed, causing investors' losses.

Applicability Of Presumption Of Reliance :Fraud-On-The-Market Doctrine

40. At all relevant times, the market for Avon securities was an efficient market for th e

following reasons, among others :

(a) Avon stock met the requirements for listing, and was listed and actively traded

on the NYSE, a highly efficient and automated market ;

(b) As a regulated issuer, Avon filed periodic public reports with the SEC and the

NYSE ;

(c) Avon regularly communicated with public investors via established market

communication mechanisms, including through regular disseminations of press releases on th e

national circuits ofmajor news wire services and through other wide-ranging public disclosures, such

as communications with the financial press and other similar reporting services ; and

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(d) Avon was followed by several securities analysts employed by major brokerag e

firms who wrote reports which were distributed to the sales force and certain customers of their

respective brokerage firms. Each of these reports was publicly available and entered the publi c

marketplace .

41 . As a result ofthe foregoing, the market for Avon securities promptly digested curren t

information regarding Avon from all publicly-available sources and reflected such information i n

Avon's stock price . Under these circumstances, all purchasers of Avon securities during the Clas s

Period suffered similar injury through their purchase of Avon securities at artificially inflated price s

and a presumption of reliance applies .

NO SAFE HARBO R

42. The statutory safe harbor provided for forward-looking statements under certai n

circumstances does not apply to any of the allegedly false statements pleaded in this complaint .

Many of the speci fic statements pleaded herein were not identified as "forward-looking statements "

when made. To the extent there were any forward-looking statements , there were no me aningful

cautionary statements identifying important factors that could cause actual results to differ materiall y

from those in the purportedly forward-looking statements . Alternatively, to the extent that the

statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants are

liable for those false forward-looking statements because at the time each of those forward-looking

statements was made, the particular speaker knew that the particular forward-looking statement wa s

false, and/or the forward-looking statement was authorized and/or approved by an executive officer

of Avon who knew that those statements were false when made.

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FIRST CLAIMViolation Of Section 10(b) Of

The Exchange Act Against And Rule lOb-5Promulgated Thereunder Against All Defendant s

43. Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein .

44. During the Class Period, defendants carried out a plan, scheme and course of conduct

which was intended to and, throughout the Class Period, did : (i) deceive the investing public ,

including Plaintiff and other Class members, as alleged herein ; and (ii) cause Plaintiff and other

members of the Class to purchase Avon securities at artificially inflated prices . In furtherance of this

unlawful scheme, plan and course of conduct, defendants, and each of them, took the actions se t

forth herein.

45 . Defendants (a) employed devices, schemes, and artifices to defraud ; (b) made untrue

statements of material fact and/or omitted to state material facts necessary to make the statement s

not misleading ; and (c ) engaged in acts, practices , and a course of business which operated as a fraud

and deceit upon the purchasers of the Company's securities in an effort to maintain artificially high

market prices for Avon securities in violation of Section 10(b) of the Exchange Act and Rule 1 Ob-5 .

All defendants are sued either as primary participants in the wrongful and illegal conduct charge d

herein or as controlling persons as alleged below .

46. Defendants, individually and in concert, directly and indirectly, by the use, means or

instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about the business, operation s

and future prospects of Avon as specified herein .

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47. These defendants employed devices, schemes, and artifices to defraud, while i n

possession of material adverse non-public information and engaged in acts, practices, and a cours e

of conduct as alleged herein in an effort to assure investors of Avon value and performance an d

continued substantial growth, which included the making of, or the participation in the making of ,

untrue statements of material facts and omitting to state material facts necessary in order to make th e

statements made about Avon and its business operations and future prospects in light of the

circumstances under which they were made, not misleading, as set forth more particularly herein,

and engaged in transactions, practices and a course of business which operated as a fraud and deceit

upon the purchasers of Avon securities during the Class Period .

48. Each of the Individual Defendants' primary liability, and controlling person liability,

arises from the following facts : (i) the Individual Defendants were high-level executives and/o r

directors at the Company during the Class Period and members of the Company's management tea m

or had control thereof; (ii) each of these defendants, by virtue of his or her responsibilities and

activities as a senior officer and/or director of the Company was privy to and participated in th e

creation, development and report ing of the Company's internal budgets, plans , projections and/or

reports; (iii) each of these defendants enjoyed significant personal contact and familiarity with the

other defendants and was advised of and had access to other members of the Company' s

management team, internal reports and other data and information about the Company's finances,

operations, and sales at all relevant times ; and (iv) each of these defendants was aware of the

Company's dissemination of information to the investing public which they knew or recklessl y

disregarded was materially false and misleading .

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49. The defendants had actual knowledge of the misrepresentations and omissions o f

material facts set forth herein, or acted with reckless disregard for the truth in that they failed t o

ascertain and to disclose such facts, even though such facts were available to them . Such defendants '

material misrepresentations and/or omissions were done knowingly or recklessly and for the purpos e

and effect of concealing Avon's operating condition and future business prospects from the investing

public and supporting the artificially inflated price of its securities . As demonstrated by defendants '

overstatements and misstatements of the Company' s business , operations and earnings throughout

the Class Period, defendants, if they did not have actual knowledge of the misrepresentations and

omissions alleged, were reckless in failing to obtain such knowledge by deliberately refraining fro m

taking those steps necessary to discover whether those statements were false or misleading .

50 . As a result of the dissemination of the materially false and misleading information

and failure to disclose material facts, as set forth above, the market price of Avon securities was

artificially inflated during the Class Period. In ignorance of the fact that market prices of Avon' s

publicly-traded securities were artificially inflated, and relying directly or indirectly on the false an d

misleading statements made by defendants, or upon the integrity of the market in which the securitie s

trade, and/or on the absence of material adverse information that was known to or recklessl y

disregarded by defendants but not disclosed in public statements by defendants during the Clas s

Period, Plaintiff and the other members ofthe Class acquired Avon securities during the Class Perio d

at artificially high prices and were damaged thereby .

51 . At the time of said misrepresentations and omissions , Plaintiff and other members

of the Class were ignorant of their falsity, and believed them to be true . Had Plaintiff and the other

members of the Class and the marketplace known the truth regarding the problems that Avon wa s

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experiencing, which were not disclosed by defendants, Plaintiff and other members of the Clas s

would not have purchased or otherwise acquired their Avon securities, or, if they had acquired suc h

securities during the Class Period, they would not have done so at the artificially inflated price s

which they paid.

52. By virtue of the foregoing, defendants have violated Section 10(b) of the Exchang e

Act, and Rule IOb-5 promulgated thereunder.

53. As a direct and proximate result of defendants' wrongful conduct, Plaintiff and th e

other members of the Class suffered damages in connection with their respective purchases and sale s

of the Company' s securities during the Class Period.

SECOND CLAIMViolation Of Section 20(a) O f

The Exchange Act A ainst the Individual Defendants

54 . Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein .

55. The Individual Defendants acted as controlling persons of Avon within the meanin g

of Section 20(a) of the Exchange Act as alleged herein . By virtue of their high-level positions, and

their ownership and contractual rights, participation in and/or awareness of the Company's

operations and/or intimate knowledge of the false financial statements filed by the Company with

the SEC and disseminated to the investing public, the Individual Defendants had the power to

influence and control and did influence and control, directly or indirectly, the decision-making of

the Company, including the content and dissemination of the various statements which Plaintif f

contend are false and misleading . The Individual Defendants were provided with or had unlimited

access to copies of the Company's reports, press releases , public filings and other statements alleged

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by Plaintiff to be misleading prior to and/or shortly after these statements were issued and had th e

ability to prevent the issuance of the statements or cause the statements to be corrected .

56 . In particular, each of these defendants had direct and supervisory involvement in th e

day-to-day operations of the Company and, therefore, is presumed to have had the power to contro l

or influence the particular transactions giving rise to the securities violations as alleged herein, an d

exercised the same.

57 . As set forth above, Avon and the Individual Defendants each violated Section 10(b )

and Rule 1 Ob-5 by their acts and omissions as alleged in this Complaint . By virtue of their position s

as controlling persons , the Individual Defendants are liable pursuant to Section 20(a) of the

Exchange Act . As a direct and proximate result of defendants' wrongful conduct, Plaintiff and other

members of the Class suffered damages in connection with their purchases of the Company' s

securities during the Class Period.

WHEREFORE, Plaintiff prays for relief and judgment, as follows :

(a) Determining that this action is a proper class action, designating Plaintiff as Lead

Plaintiff and certifying Plaintiff as a class representative under Rule 23 of the Federal Rules of Civi l

Procedure and Plaintiffs counsel as Lead Counsel ;

(b) Awarding compensatory damages in favor of Plaintiff and the other Clas s

members against all defendants , jointly and severally, for all damages sustained as a result of

defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees ; and

(d) Such other and further relief as the Court may deem just and proper .

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JURY TRIAL DEMANDE D

Plaintiff hereby demands a trial by jury.

Dated :By:------------------------------BRODSKY & SIVIITH, LLCEvan J . Smith, Esquire240 Mineola BoulevardMineola, NY 11501(516) 741-497 7

SCHIFFRIN & BARROWAY, LLPMarc A. Topaz, EsquireRichard A. Maniskas, EsquireTamara Skvirsky, Esquire280 King of Prussia Road,Radnor, PA 1908 7(610) 667-7706

Attorneys for Plaintiff

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