By  on February 2, 2007

NEW YORK — Bolstered by its mass market fragrance business, Elizabeth Arden Inc. reported sales growth of about 19 percent in the second quarter.

“Our business truly benefitted from our diversified business model,” E. Scott Beattie, chairman, president and chief executive officer said during a conference call Thursday, referring to the company’s own fragrance portfolio and scents made by other firms that Arden distributes.

Due primarily to transition and integration costs of recent acquisitions, net income for the quarter decreased 21.7 percent, to $25.9 million, or 91 cents a diluted share, from $33.1 million, or $1.12 a share, in the year-ago period.

Arden’s sales surged 18.8 percent to $410.8 million from $345.9 million in the prior period, driven by its mass market business, double-digit sales growth of the Britney Spears franchise and the addition of fragrance brands from the Riviera Concepts acquisition last June. The company noted that during the quarter, Fantasy Britney Spears was the number-one new scent in the mass market. For the year, the Elizabeth Taylor brand occupied the top seat in the mass channel and in J.C. Penney.

For the first half, net income decreased to $24.5 million, or 86 cents a share, from $34 million, or $1.15, in the prior year, on sales that gained 16.1 percent, to $665.6 million from $573.3 million a year ago.

The company said that net sales of its North America fragrance business, which accounts for about 60 percent of company sales, grew 27 percent during the quarter.

Regarding sales by channel, Beattie said the firm’s mass market fragrance business gained 38 percent, driven by the Britney Spears franchise, while its department store sales decreased 35 percent due to a “weaker than planned” holiday period in department stores.

Beattie noted that U.S. department stores account for less than 10 percent of the company’s total business. International sales gained 14 percent, boosted by Prevage, the antiaging treatment billed as a Botox alternative.

The firm acknowledged that the sales of With Love Hilary Duff, which ranked number three in women’s fragrances for fall, were softer than anticipated, but said the scent will likely get a boost from the Feb. 8 video premiere of Duff’s companion song for the fragrance, called “With Love.” The company plans to introduce Mariah Carey’s eponymous scent, originally slated for spring, this fall.Beattie said the mass market helped offset softness in the department store channel, declaring, “Our Wal-Mart fragrance business is almost double the size of our whole department store fragrance business…and it’s growing much more rapidly.”

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