Elizabeth Arden third quarter results down due to weak fragrance sales

Elizabeth Arden third quarter results down due to weak fragrance sales

Elizabeth Arden third quarter net sales were US$191.4m, a decrease of 9.2 percent compared to the same period last year.

However, the company has pointed out that at a constant currency basis, the decrease was lower at 6 percent.

Falling sales have been attributed, in a large part, to lower demand for celebrity fragrances, particularly in North America. A lack of fragrance innovation has also been blamed for the sales decline.

Elizabeth Arden’s reported and adjusted results include US$2.9 million (pre-tax) of currency transaction losses.

The net loss per diluted share for the quarter was US$1.18. On an adjusted basis, excluding non-recurring and other items, net loss per diluted share was US$0.86.

Net sales of the Elizabeth Arden branded products increased by approximately 3 percent (10 percent at constant foreign currency rates) in the third fiscal quarter with growth across both the North America and International segments.

Yet net sales of non-Elizabeth Arden branded fragrances decreased by 18 percent (17 percent at constant foreign currency rates) in the third fiscal quarter.

Geographically, North America segment net sales declined by 12 percent (11 percent at constant foreign currency rates) and International segment net sales decreased by 6 percent (an increase of 1 percent at constant currency rates).

Sales of the International segment and the Elizabeth Arden brand are said to reflect increased skin care sales, particularly in Asia as a result of a new distribution strategy and the impact of prior period proactive tightening of distribution globally.

E. Scott Beattie, Chairman, President and Chief Executive Officer, commented, “We are pleased with the recent growth of the Elizabeth Arden brand that we are seeing across both our international and North American businesses, giving us confidence as we head into the re-launch of the Elizabeth Arden brand marketing campaign this fall.

“Our balance sheet and cash flow metrics also continue to improve and remain ahead of plan, resulting in US$41m in operating cash flow through the first nine months of this fiscal year. Our performance improvement initiatives continue to drive down costs and improve efficiencies in our business. Indirect overhead savings anticipated from our 2014 Performance Improvement Plan remain on track through the third quarter, and we remain committed to achieving a total of US$40m to US$50m of annualized savings.”

 

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