Elizabeth Arden shares fall to $12.17 following results

9-Nov-2015

The beauty company's Q3 revenues were not far off analyst predictions of $268m

Elizabeth Arden saw net sales dip to $266m in Q3 2015, a figure that was not far off the $268m anticipated by brokers.

Overall, net sales were clipped 1.6%. The news did little for Arden’s share price, which came in at $12.17 (before this article was published) although it has reached as high as $21.67 in the last year (more than a 42.6% fall).

Despite Elizabeth Arden’s ailing performance, Euromonitor analyst Nicholas Micallef said: “A ray of light is evident in the Elizabeth Arden brand, posting positive growth in the latter part of FY2015. Buoyant prospects for premium-aligned products in key markets where it operates is benefitting its skin care lines.”

However, more is needed to pull back Arden’s fragrances arm, which generate over 60% of sales Micallef added. Despite stalling growth in celebrity fragrance, Arden has gone ahead and renewed its Britney Spears licence, which Micallef said is not a good move. “Instead, it could focus more on high-end lines such as exclusive collections and cater more for men; US premium men’s fragrances are forecast to generate US$140m in absolute gains from 2014-2019, while UK and Germany’s men’s growth forecasts exceed those for women’s.”

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The owner of Red Door and White Shoulders is attempting to boost sales in Asia with distribution expert Luxasia Partners and the appointment of new President Jue Wong, who has strong Asian experience. Arden was recently upgraded to a Hold from a Strong Sell rating in a recent research note to investors from Zacks although Zacks’ analyst consensus target for the next 12 months remains low at $11.

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