Elizabeth Arden (RDEN) Prelim. Q2 Results Miss Views
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Financial Fact:
Provision for income taxes: 1.24M
Today's EPS Names:
SVBT, ZEO, OTLK, More
Financial Fact:
Provision for income taxes: 1.24M
Today's EPS Names:
SVBT, ZEO, OTLK, More
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Elizabeth Arden, Inc. (Nasdaq: RDEN) announced preliminary unaudited financial results for its second fiscal quarter ended December 31, 2013.
The Company expects to report second fiscal quarter net sales of $415 million to $418 million and net income per diluted share of $1.13 to $1.16. On an adjusted basis, excluding non-recurring items, the Company expects to report net income per diluted share of $1.05 to $1.08. The non-recurring items include Elizabeth Arden repositioning and restructuring costs of $0.27 per diluted share and a one-time gain of $0.35 per diluted share related to the reversal of a contingent liability associated with an acquisition.
*** The Street sees Q2 revs of $467.9 million and EPS of $1.48.
For the first half of fiscal 2014, net sales of Elizabeth Arden branded products increased by approximately 2%, and sales of fragrances decreased by approximately 10%, as compared to the prior year period. Retail sales of Elizabeth Arden branded products at U.S. department stores increased by 4%, which the Company believes is above the performance of the overall category. Net sales of the Company’s North America segment decreased by approximately 9%, and net sales of the Company’s international segment decreased by approximately 1%, as compared to the prior year period. The net sales percentages are on a GAAP basis.
E. Scott Beattie, Chairman, President and Chief Executive Officer commented, “While still solidly profitable, our second quarter results will be below our prior expectations primarily due to lower than anticipated net sales. Our results were significantly impacted by an increased level of highly promotional and discounted activity globally and weaker than anticipated holiday retail sales and replenishment orders at a number of our non-prestige retail accounts in North America. While we are disappointed with these results, we made the strategic decision in the quarter not to participate fully in the heavy promotional and discounted environment.”
Mr. Beattie continued, “Moving forward, the greatest opportunity to drive margins and earnings growth continues to be the commercial expansion of our international business, which provides us with significant operating leverage. However, that business has performed inconsistently in recent periods. With new leadership in place under Eric Lauzat, Executive Vice President and General Manager, International, we are engaging in a fundamental reorganization of how we commercially execute our international business, focusing on priority markets, strengthening our travel retail and distributor relationships and exiting low-return businesses.”
Mr. Beattie concluded, “We are confident our recent results are not reflective of the underlying strength of our fragrance brand portfolio and the tremendous potential of the Elizabeth Arden brand. We are focused on increasing shareholder value and remain fully committed to growing our brands and unlocking their value for the benefit of our shareholders.”
Fiscal 2014 Outlook
In light of these preliminary results, and the importance of the second fiscal quarter to full year results, the Company now expects its fiscal 2014 net sales and earnings to be below its prior guidance provided on October 30, 2013. That previous guidance was for net sales growth in the lower half of a 3% to 5% range and for earnings per diluted share in the lower half of a range of $2.15 to $2.30. The Company has decided to withdraw its previous guidance and will not be providing updated guidance for fiscal 2014 as part of its second quarter earnings announcement on February 5, 2014.
The Company expects to report second fiscal quarter net sales of $415 million to $418 million and net income per diluted share of $1.13 to $1.16. On an adjusted basis, excluding non-recurring items, the Company expects to report net income per diluted share of $1.05 to $1.08. The non-recurring items include Elizabeth Arden repositioning and restructuring costs of $0.27 per diluted share and a one-time gain of $0.35 per diluted share related to the reversal of a contingent liability associated with an acquisition.
*** The Street sees Q2 revs of $467.9 million and EPS of $1.48.
For the first half of fiscal 2014, net sales of Elizabeth Arden branded products increased by approximately 2%, and sales of fragrances decreased by approximately 10%, as compared to the prior year period. Retail sales of Elizabeth Arden branded products at U.S. department stores increased by 4%, which the Company believes is above the performance of the overall category. Net sales of the Company’s North America segment decreased by approximately 9%, and net sales of the Company’s international segment decreased by approximately 1%, as compared to the prior year period. The net sales percentages are on a GAAP basis.
E. Scott Beattie, Chairman, President and Chief Executive Officer commented, “While still solidly profitable, our second quarter results will be below our prior expectations primarily due to lower than anticipated net sales. Our results were significantly impacted by an increased level of highly promotional and discounted activity globally and weaker than anticipated holiday retail sales and replenishment orders at a number of our non-prestige retail accounts in North America. While we are disappointed with these results, we made the strategic decision in the quarter not to participate fully in the heavy promotional and discounted environment.”
Mr. Beattie continued, “Moving forward, the greatest opportunity to drive margins and earnings growth continues to be the commercial expansion of our international business, which provides us with significant operating leverage. However, that business has performed inconsistently in recent periods. With new leadership in place under Eric Lauzat, Executive Vice President and General Manager, International, we are engaging in a fundamental reorganization of how we commercially execute our international business, focusing on priority markets, strengthening our travel retail and distributor relationships and exiting low-return businesses.”
Mr. Beattie concluded, “We are confident our recent results are not reflective of the underlying strength of our fragrance brand portfolio and the tremendous potential of the Elizabeth Arden brand. We are focused on increasing shareholder value and remain fully committed to growing our brands and unlocking their value for the benefit of our shareholders.”
Fiscal 2014 Outlook
In light of these preliminary results, and the importance of the second fiscal quarter to full year results, the Company now expects its fiscal 2014 net sales and earnings to be below its prior guidance provided on October 30, 2013. That previous guidance was for net sales growth in the lower half of a 3% to 5% range and for earnings per diluted share in the lower half of a range of $2.15 to $2.30. The Company has decided to withdraw its previous guidance and will not be providing updated guidance for fiscal 2014 as part of its second quarter earnings announcement on February 5, 2014.
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