Elizabeth Arden reports loss but remains upbeat
Estee Lauder, L’Oreal and Avon have all cut their guidance figures suggesting that the cosmetics industry is not as well insulated from economic woes as had been hoped.
Lower forecast
For the fiscal year 2009, Elizabeth Arden had expected sales growth of between 12.5 and 14 percent but the company has now lowered its forecast to 6.5 to 8.5 percent.
'The challenging consumer and retail environment worldwide' and foreign currency fluctuations were cited as the reasons behind the reduction.
The results for the first quarter ending September 30 were published today and show a 4.6 percent rise in net sales to $284.2m.
The acquisition of the Liz Claiborne fragrance brands helped to increase the top line but the cost of integrating the business weighed heavily on profits.
Elizabeth Arden posted a net loss of $12.5m for the quarter compared to a net profit of $0.4m for the equivalent period last year.
Acquisition costs
Most of the estimated $19m costs related to the Liz Claiborne acquisition were absorbed in the quarter dragging the bottom line down with them.
Commenting on the results, Elizabeth Arden CEO E. Scott Beattie said they were 'essentially on plan' especially given the relative economic weakness and unfavorable foreign exchange fluctuations.
Beattie added: “The integration of the Liz Claiborne fragrance business has gone very well and is nearly complete.
“Our new launches, including new fragrance brands from Juicy Couture, Usher and Mariah Carey, as well as the Rocawear 9IX fragrance, performed well.”
