Elizabeth Arden records second quarter loss

By Simon Pitman contact

- Last updated on GMT

Related tags: Elizabeth arden brand, Revenue

Elizabeth Arden records second quarter loss
Elizabeth Arden’s second quarter results missed Wall Street’s expectations and recorded a loss, as actual sales figures were hard hit by the strong dollar.

It was the fourth consecutive quarter for the company to post constant currency revenue growth for the Elizabeth Arden brand and international sales, but negative currency translations on international revenues more than counterbalanced that achievement for the current quarter.

Net sales were down by 5.4% at $316.2m, which reflected a decrease of 1% at constant current sales for the entire group.

International sales drive growth

The revenues reflected a sharp contrast between its North America and International sales, with net sales across the globe increasing by 5.4% and sales in North American falling by 5.1%.

Falling North American sales and negative currency translations also affected the bottom line, with the company registering a net loss of $5.6m during the quarter, although this was a significant improvement on the loss of $56.6m registered in the corresponding period last year.

A large part of the company’s drive in recent years has been to focus on the Elizabeth Arden brand, which the company said is continuing to pay dividends as sales for the brand grew by 3% in the quarter, driven by both fragrance and skin care.

Sales of non-Elizabeth Arden fragrance fell by 4%, in contrast to the company's own brand fragrances growing by 7%, driven by John Varvatos and Juicy Couture, but offset by slower celebrity fragrance sales.

China and Europe register big growth

On a regional basis, net sales growth was strongest in Europe, where revenues were up 9%, driven by the Elizabeth Arden brand, while net sales in Greater China increased by 18%.

Looking ahead to the full financial year 2016 net sales are expected to be driven by the Elizabeth Arden brand and the international business, while foreign currency headwinds are expected to negatively impact the business by around 3.75%, up from earlier estimates of 3%.

“We continue to expect sales growth, at constant foreign currency rates, and margin expansion for fiscal 2016 and beyond driven by a stronger innovation pipeline and reinvestment of savings from our performance improvement initiatives,"​  said Elizabeth Arden CEO Scott Beattie.

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