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Elizabeth Arden Inc.’s net income declined 22 percent in the first quarter, dragged down by costs tied to the repositioning of its flagship brand.
Net income attributable to Arden was $1.7 million, or 22 cents a diluted share, compared with $2.18 million, or 44 cents a share, in the year-ago period. The adjusted net income excludes non-recurring costs related to the revamp of the Elizabeth Arden brand and restructuring activities, and for fiscal 2013, excludes costs tied to fragrance acquisitions completed in 2012.
Net sales for the quarter ended Sept. 30 dipped 0.3 percent to $343.6 million, compared with $344.5 million from the prior-year period. At constant foreign currency rates, net sales gained 0.6 percent.
The company reported that net sales in the international segment gained by 5.3 percent, or 7.2 percent at constant currency, driven by growth in Greater China and European markets. Net sales in Arden’s North America business declined by 3 percent.
The company is seeing traction across its revamped flagship Elizabeth Arden brand: Arden reported that the brand’s sales gained 11.1 percent, or 12.3 percent at constant exchange, compared with the prior year.
“Overall results for the quarter were essentially in line with our expectations,” said E. Scott Beattie, the company’s chairman, president and chief executive officer. “We are pleased with the progress of the Elizabeth Arden brand repositioning as well as our other key initiatives. Recall, we had strong sales growth in the first half of last year due to the contribution of acquisitions and an unprecedented level of fragrance launch volume. This clearly has an impact on revenue growth and gross margin improvement comparisons for this fiscal year. As we head into the holiday season, we expect to continue to execute against our plans, but our outlook remains cautious given the continued challenging economic environment globally.”
Beattie also said the company has recruited former L’Oréal executive Eric Lauzat as executive vice president and general manager of International.
At L’Oréal, Beattie said of Lauzat, “He has an exemplary track record of organization building and commercial brand development of prestige beauty brands across categories in the regions he managed, including the Lancôme and Biotherm beauty brands, as well as the Giorgio Armani, Ralph Lauren and Yves Saint Laurent fragrances.”