NEW YORK — Elizabeth Arden Inc. cut its first-quarter red ink almost in half with increased sales, tighter inventories and reduced expenses.
Net losses for the period improved to $9.9 million, or 61 cents a share, against the year-ago deficit of $18.1 million, or $1.15. Year-ago results were restated by the company to reflect the Emerging Issues Task Force Issue No. 01-09, a change in accounting which decreases both sales and gross profits and creates an offsetting reduction in selling, general and administrative expenses.
Losses attributable to common shareholders totaled $10.8 million compared with $19 million a year ago.
Sales for the quarter ended April 27 ramped up 14.2 percent to $140.3 million from $122.8 million a year ago.
Chairman, president and chief executive E. Scott Beattie, in a statement, said the improvement “reflects the success of our integration and restructuring initiatives.” As reported, the firm, formerly known as FFI, acquired the Elizabeth Arden business from Unilever in January 2001.
The top-line gain was drawn from expansion of the company’s open sell program, new product launches and the addition of certain popular distribution brands, partially offset by fewer prestige department store doors.
Gross margin jumped in excess of 200 basis points against a year ago as most of the high-cost inventory purchased before the acquisition was sold. The benefit, though, was partially offset by changes in the sales mix.
Inventories at the end of the quarter were chopped by 16.3 percent against a year ago.
Restructuring and workforce reductions helped pull selling, general and administrative expenses down by 630 basis points for the quarter.
Going forward, Beattie said Arden would engage in several marketing initiatives to further boost its operations, the introduction of Catherine Zeta-Jones as the brand’s new face and the new fragrance Ardenbeauty among them. Also, a new Elizabeth Taylor fragrance, Forever Elizabeth, will launch in the fall.
For the full year, the Miami-based firm anticipates sales of $735 million to $775 million with a gross margin of 42 to 44 percent, including the effects of the accounting change. Previously, without the adjustment, Arden projected sales of $800 million to $840 million with margins of 50 to 52 percent.
“While the economic and retail environment continues to be somewhat uncertain, our outlook for the year has not changed,” said Beattie.
Shares of the beauty firm picked up $1.15, or 8.6 percent, to close at $14.55 in Wednesday’s Nasdaq trading.”