Elizabeth Arden investors take 30% share price hit

Times have been tough at Elizabeth Arden of late. Ex Arden CFO Stephen Smith, who had been there since 2001, has since left the company to join food operator Hain Celestial Group and there is no immediate successor to take his place. Meanwhile, the company's shares recently sold for $35.91, falling from mid May when they were selling for almost $49.

Looking ahead, 2014 earnings are not expected to rival those of 2013, which explains somewhat Arden’s crushed share price. All some distance from the spring when Arden was able to shout about 33% European sales growth.

“After a long history of posting positive quarterly earnings surprises, the company has missed two out of the past three quarters,” a recent Zacks research report said. Gross margins have been under pressure in recent quarters according to the analyst, “falling from 49.2% in the June quarter of 2012 to 46.77% in the June quarter of 2013”.

Despite this, the company is in the midst of repositioning its brand, an initiative which commenced last year. It’s also increasingly pushing its own brands in an effort to reduce its licensing exposure, which should support operating margins. The company is reportedly happy with the outcome of the repositioning so far; retail sales at Arden flagship counters have increased 20% since conversion and retail sales at its international flagship doors have increased 17%, driven by skin care and colour product sales.