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Aug 8, 2013
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Elizabeth Arden posts fourth-quarter loss

By
Reuters
Published
Aug 8, 2013

Elizabeth Arden on Thursday reported much worse quarterly results than expected as an unnamed retailer ordered less than planned and the beauty products company struggled to make over its namesake brand.

Adjusted earnings were less than one-third of Wall Street's target, ending what Arden Chief Executive E. Scott Beattie called a "transitional year."

Sales rose 0.8 percent to $267.6 million while analysts looked for sales of $289.8 million, according to Thomson Reuters I/B/E/S.

Elizabeth Arden said an unnamed North American mass retailer ordered less than it had anticipated, especially in June, the end of its quarter. It saw weak sales in Europe, particularly in the United Kingdom.

The company did not identify the retailer and could not be reached immediately for comment. In fiscal 2012, its largest customer was Wal-Mart Stores Inc (WMT.N), the world's largest retailer. Wal-Mart accounted for about 13 percent of its total sales and about 20 percent of its North American sales that year.

Weakness from the unidentified retailer, both in sales performance and orders, as well as overly optimistic projections for the Elizabeth Arden brand were the two main reasons annual results came in below expectations, Beattie said in a statement.

FOREIGN CURRENCY HIT

The company lost $5 million, or 17 cents per share, in the fiscal fourth quarter ended June 30, compared with a profit of $3.6 million, or 12 cents per share, a year earlier. Adjusted earnings per share, excluding items such as costs related to its brand repositioning, fell to 10 cents from 28 cents.

Sales should rise 3 percent to 5 percent in the fiscal year ending next June, including a hit of about 1 percentage point from foreign currency, it said. The company forecast earnings per share of $2.15 to $2.30, including a hit of about 19 cents from foreign currency translation.

For the current first quarter ending in September, it forecast sales flat to down 1 percent, with adjusted earnings per share of 13 cents to 18 cents. Analysts expected 50 cents per share this quarter.

The company expects to spend $11 million to $16 million for the Elizabeth Arden repositioning this year, including about $7.5 million in the first quarter. It also forecast about $5 million in restructuring and severance charges, with $3.5 million in the first quarter.

Elizabeth Arden repeated its warning that continued global economic uncertainty may hurt retailer and consumer confidence and demand and along with foreign currency volatility makes forecasting difficult.

Elizabeth Arden, known for its namesake cosmetics brand that started more than 100 years ago, also sells celebrity fragrances from Britney Spears, Elizabeth Taylor, Justin Bieber and Nicki Minaj.

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