NEW YORK — Hurt by a weak U.S. retail scene and the impact of SARS, Elizabeth Arden Inc.’s first-quarter sales dipped while red ink pooled on the bottom line.
This story first appeared in the May 29, 2003 issue of WWD. Subscribe Today.
Losses attributable to common shareholders widened to $16.7 million, or 93 cents a share, for the three months ended April 26. This compared with the year-ago loss of $10.8 million, or 61 cents.
Investors traded down shares of the prestige fragrance and beauty products firm 30 cents, or 2.5 percent, to close at $11.73 in Nasdaq trading Wednesday.
Net sales declined 3.9 percent for the quarter to $134.8 million from $140.3 million in the year-ago period.
Results were in line with reduced forecasts laid out on May 19. At that time, the manufacturer prepared Wall Street for losses of 92 to 94 cents a diluted share on sales of $133 million to $135 million. Arden’s prior guidance had been in line with last year’s first-half loss of $1.24, of which half was incurred in the first quarter.
Negative pressure from poor market conditions at home and the impact of SARS, particularly in Asia, Canada and travel retail markets, was tempered by increased business in the mass market and favorable foreign currency translation.
Largely because of increased advertising to support the firm’s brands, Arden’s selling, general and administrative expenses during the quarter climbed 310 basis points, as a percentage of sales, to $55.6 million.
“The continued strength of our mass customers and the number of initiatives we have slated for the remainder of the year, including the distribution of new brands and a strong innovation calendar of new products, combined with generally favorable foreign exchange benefits, should positively impact our results for the rest of the year,” said chairman and chief executive E. Scott Beattie in a statement.
While the firm had anticipated adverse retail conditions this year, SARS came as a surprise and could continue to dampen results in coming quarters. Arden said it was comfortable with Wall Street’s second-quarter estimates calling for losses of 65 cents a share while sales should come in at $130 million to $140 million.
For the full year, the firm is still looking for earnings growth of 20 to 25 percent a diluted share on a 5 to 7 percent upswing in sales.