Elizabeth Arden Inc. is seeing the payoff of a larger fragrance portfolio and the repositioning of its flagship brand, with second-quarter sales gaining 8.8 percent.
But the news wasn’t all roses: Arden’s chairman, president and chief executive officer E. Scott Beattie said consumers, particularly the mass-market shopper, is feeling the pinch of the U.S. payroll tax increase and has curtailed spending as a result.
“Generally, our retail plans for the second quarter were too optimistic,” said Beattie.
Nevertheless, the company reported solid second-quarter results. Net income for the three months ended Dec. 31 rose 13.4 percent to $48.1 million, or $1.58 a diluted share, from $42.4 million, or $1.42 a share, a year earlier.
Net sales in the quarter gained 8.8 percent to $467.9 million, compared to the year-ago period. Excluding the unfavorable impact of foreign currency translation, net sales increased by 9.1 percent. In North America, net sales increased 8.4 percent for the quarter and 13 percent for the fiscal year-to-date, driven by new launches from Taylor Swift, Justin Bieber and Nicki Minaj. Arden acquired the latter two celebrity fragrance businesses from Give Back Brands in 2012. Separately, that same year, the company also acquired the fragrance licenses of Ed Hardy, True Religion and BCBG Max Azria from New Wave Fragrances.
In the U.S., Bieber’s Girlfriend fragrance ranked number three among new launches for calendar year 2012, and Minaj’s Pink Friday ranked number six, according to Arden.
Internationally, net sales grew 11 percent in constant currency for the quarter, and 10 percent for fiscal year-to-date.
The increase, however, fell short of the company’s forecasts due to lower-than-expected sales in department stores and a weaker-than-anticipated holiday season at a major mass-market retailer.
“We saw a weak Christmas season through most of our markets and most of our channels of distribution,” Beattie told analysts during the company’s earnings call Thursday, noting that sales began decelerating after Thanksgiving.
Based on a softening in consumer spending and the seasonality of the fragrance market, Arden reduced its guidance for the second half of 2013. For the full fiscal year ending June 30, Arden expects net sales to increase by 9 to 11 percent, and for earnings per diluted share to be in the range of $2.30 to $2.50.
The company said the initial roll out of its revamped Elizabeth Arden brand to its roughly 40 flagships over the past several months is beginning to yield solid returns. “Flagship counters in the North American markets were converted earlier this fall, with all door conversions complete by the end of October. U.S. flagship doors delivered 24 percent year-over-year retail sales growth from conversion through the end of December, well in excess of the U.S. prestige category, which grew 5 percent for the second quarter,” said Beattie. He said the roll out across key international doors was more staggered, but resulted in a 9 percent lift. Arden plans to install the revamped brand to 200 more doors globally during the remainder of fiscal 2013. Beattie said the Elizabeth Arden brand is close to a $1 billion business, and reiterated that a successful restaging could double brand sales over five years.
For the first half, Arden’s net income rose to $61.5 million, or $2.02 a diluted share, compared to $51.6 million, or $1.73 a share, in the year-earlier period. Net sales for the six months, gained 10.8 percent to $812.5 million, up from $733.5 million.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast