Elizabeth Arden Inc.’s second-quarter profits shot up 61.3 percent and the company raised its guidance for the year, but efforts by the Chinese government to improve safety controls have stymied growth in the country.
This story first appeared in the February 4, 2011 issue of WWD. Subscribe Today.
“The one weakness in terms of our international revenue growth was, for this quarter, our China business,” said E. Scott Beattie, chairman, president and chief executive officer, on a conference call with analysts. “We continue to experience new product registration challenges consistent with the rest of the industry and, as a result, we’re slowing our new store growth and focusing on growing sales and productivity of existing stores.”
The company sells beauty and fragrance products in 100 countries under a host of brands, including Elizabeth Arden, Britney Spears, Juicy Couture and Rocawear.
Second-quarter profits rose to $34 million, or $1.19 a diluted share, from $21.1 million, or 73 cents, a year earlier. Adjusted earnings of $1.20 a share came in well ahead of the $1.04 Wall Street was expecting.
The New York-based firm operated more efficiently in the quarter, cutting the costs of goods sold by 3 percent to $211.2 million, which helped the small uptick in sales go much further on the bottom line.
Sales for the quarter ended Dec. 31 rose 3.1 percent to $405.6 million from $393.3 million, with U.S. sales flat at $275.1 million and international revenues advancing 10.5 percent to $130.5 million.
The company raised its profit guidance for the year to a range of $1.40 to $1.50 a share, up from the $1.15 to $1.25 previously projected.