“We’re coming out of a very difficult transformation period over the last two years,” E. Scott Beattie, Arden’s chairman and chief executive officer, told Wall Street analysts during the company’s earnings call on Thursday.
During the fourth quarter, Arden narrowed its net loss attributable to the company to $108.7 million, or $3.65 a diluted share, compared with a net loss of $155.9 million, or $5.24 a share, in the year-ago period.
Net sales for the three months ended June 30 declined 8.5 percent to $175.5 million, compared with $191.7 million in the year-earlier period.
By region, net sales in North America declined 14 percent, and international sales gained 4 percent.
For the year, net loss attributable to Arden widened to $246.3 million, or $8.26 a diluted share, compared with a net loss of $145.7 million, or $4.90 a share.
Net sales for the year declined 16.6 percent to $971.1 million, compared with $1.16 billion.
Beattie said the company has worked to elevate its flagship Elizabeth Arden brand and tighten its distribution.
“This brand has high levels of awareness and a relatively low level of penetration,” said Beattie. “All of the tough decisions we’ve made in terms of tightening our distribution, I think it absolutely can provide multiple years of substantial growth. But what we have to do is start showing that growth consistently and prove to our stakeholders and to ourselves that we’re on the right track and that we’re doing it and executing it.”
In the quarter, adjusted net sales of the Elizabeth Arden brand declined 2 percent, but gained 7 percent in constant currency.
Beattie said, “This is the second consecutive quarter of sales growth for the Elizabeth Arden brand. The 7 percent constant currency increase this quarter is on top of a 9 percent constant currency increase in the third fiscal quarter. This gives us confidence as we head into the launch of the new Elizabeth Arden brand marketing campaign this fall, which is accompanied by a richer innovation pipeline.”
The brand also has a change in leadership. On Monday, JuE Wong assumed the post of president of the Elizabeth Arden brand, a newly created role at the company.
Prior to Wong’s appointment, Arden’s former chief marketing officer had overseen the Arden brand and the company’s fragrance portfolio, a role which Beattie acknowledged was “too complex.”
With Wong overseeing the Arden brand and Joel Ronkin as president of the fragrance business, Beattie said, “We’ll become much more agile on both business.” He noted the company “will become simpler” and have less handoffs between functions.
During the quarter, Arden put its fragrance business under review, as part of its ongoing Performance Improvement Plan, which was introduced in 2014.
It reported that celebrity scents, which have seen sales fall off, now account for 5 percent of Arden’s total sales. The company said it remains committed to the fragrance segment, but has introduced lower pricing for some brands and also introduced more value-laden body sprays.
Arden also signed a joint venture agreement for the Southeast Asia region with Luxasia, whose specific expertise is in Asia, and expects to commence operations in late September.
Beattie said, “We have great brands. We have a track record of success that we will return to, and our people have been incredibly dedicated during difficult times, and it is my objective to return our business to the growth and success that we’ve had in the past but built on a much stronger, more sustainable, profitable base of business.”