Wall Street apparently likes the look and scent of the Liz Claiborne-enhanced Elizabeth Arden Inc.
Shares of Arden beefed up $1.75, or 10.3 percent, to close at $18.80 in Nasdaq trading Thursday after the company matched estimates with a charge-heavy net loss in the fourth quarter but provided upbeat guidance for the year ahead, a good deal of it based on the ability of the Liz Claiborne roster to reenergize a North American business that sputtered in the just-concluded year.
For the final quarter of 2008, ended June 30, the New York-based beauty concern registered a net loss of $10.4 million, or 38 cents a diluted share, versus net income of $9.6 million, or 33 cents, in the year-ago quarter.
Stripping out charges to reflect the addition of the Liz Claiborne brand portfolio, related product discontinuation costs and restructuring expenses, adjusted earnings came in at $6.3 million, or 22 cents a share, matching analysts’ consensus estimates, versus $9.9 million, or 34 cents, in the 2007 quarter. Adjusted gross profit receded 1.4 percent, to $105.1 million, and increased, to 43.9 percent from 43.5 percent, as a percentage of sales.
Elizabeth Arden acquired the global licensing rights to Liz Claiborne’s fragrance brand portfolio, which includes Juicy Couture, Lucky Brand and other scents, in May, moving beyond its previous relationship as a distributor for Liz Claiborne fragrances in the U.S. mass channel.
E. Scott Beattie, chairman, president and chief executive officer of Elizabeth Arden, said, “As we look to fiscal 2009, we expect the Liz Claiborne transaction to provide us with significant incremental sales and earnings growth, particularly in our North America fragrance business.” Calling the transition “on track,” he pointed out that the sales organization had been strengthened “with minimal incremental head count additions to our sales force, and all of the key marketing personnel associated with the Liz Claiborne fragrances already have joined us in our New York City offices.”
Falling slightly below the consensus estimate of $237.6 million, sales declined 2.6 percent to $236.3 million from their year-ago level of $242.7 million. Revenues were down slightly more, 3.8 percent, when the favorable effects of foreign currency translation were excluded.
Of greater concern was the performance of the company’s fragrance business in North America, responsible for 60 percent of company revenues. While international business for the year grew 9.2 percent — 4.2 percent without currency fluctuation — the North American component declined 1.5 percent and, Beattie told a Thursday morning conference call, business in U.S. department stores declined “about 14 percent.”
The ceo said that department store business had improved somewhat in the fourth quarter but that the company had seen “continued weakness in the North American consumer,” a softness expected to extend at least into the first half of fiscal 2009.
The company introduced 2009 earnings guidance of $1.65 to $1.85 a diluted share based on expectations of a 12.5 to 14 percent increase in sales. Apart from the addition of the Liz Claiborne brands, “modest growth” is expected in the U.S. and Europe.
“We do expect to see continued growth in our international business with the exception of certain of the European markets where we see weakness, but our growth is going to be modest across our existing brand portfolio and obviously significant double-digit growth as a result of the integration of the Liz Claiborne brand portfolio,” Beattie said on the call.
He noted upcoming fall launches of the Viva la Juicy fragrance from Juicy Couture, the company’s first fragrance under a license from Rocawear, and new scents from Mariah Carey and Usher. A new Elizabeth Arden fragrance is set for a spring launch.
The company also expects to benefit from improvements in its supply chain and logistics, realizing savings of between $10 million and $12 million in the new year and up to $15 million in fiscal 2010.
For the year, net income declined 46.7 percent to $19.9 million, or 68 cents a diluted share, from $37.3 million, or $1.30, in 2007. Excluding charges, EPS matched estimates of $1.31 a share versus the year-ago mark of $1.36. Sales grew 1.2 percent to $1.14 billion from $1.13 billion with China and Eastern Europe making significant contributions.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)