On Oct 31, 2013, makeup and skin care company
Elizabeth Arden, Inc.
), announced first-quarter fiscal 2014 results. While the results
significantly surpassed the Zacks consensus Estimate, they fell
year over year.
Fiscal first-quarter (ended Sep 30) earnings per share of 22
cents beat the Zacks Consensus Estimate of 15 cents by 46.7%.
Earnings, however, declined 50.0% from the year-ago levels due to
lower revenues and poor margins.
Revenues slipped 0.3% year over year to $343.6 million.
However, sales beat the Zacks Consensus Estimate of $342 million.
Excluding currency headwinds, revenues increased 0.6%.
Strong sales in the Greater China and European markets were
offset by 3% decline in sales in the North American segment.
First-quarter net sales for the international segment went up
7.2% in constant currency. Branded products recorded a strong
sales growth of 12.3% in constant currency backed by strong
growth in skin care, color cosmetics and fragrance
The gross margin declined 30 basis points (bps) to 6.0% in the
quarter due to sluggish top-line growth.
Weak FY14 Outlook
For the second quarter of fiscal 2014, sales growth is
expected to grow by 3% to 5% (including currency headwinds of
around 0.4%). Adjusted earnings are expected in the range of
$1.30 to $1.60.
RDEN has maintained the fiscal 2014 guidance. For full year
2014, sales are expected to grow between 3.0% and 5.0% year over
year, much lower than the growth seen in fiscal 2013. Earnings
are expected in the range of $2.15 to $2.30, representing
approximately 4% growth at the mid-point. Currency headwinds are
expected to hurt fiscal 2014 sales by 1% and earnings by 19
In fiscal 2014 the company will continue to focus on Elizabeth
Arden's brand repositioning initiative and expansion of the
fragrance brands overseas. Innovative marketing programs, product
introductions and the upcoming holiday season could bode well for
Elizabeth Arden is a leading global marketer and manufacturer
of prestige beauty products. Its brands include fragrance brands
like Elizabeth Arden and Red Door, celebrity fragrance brands of
Britney Spears, Elizabeth Taylor etc., skin care brands like
Visible Difference and Ceramides; and some cosmetic products
under the Elizabeth Arden brand. The Elizabeth Arden brand is one
of the most widely recognized beauty brands in the world.
Other Stocks to Consider
The stock carries a Zacks Rank #3 (Hold). On Oct 31, 2013,
another cosmetics company.
Estee Lauder Companies Inc.
) posted first-quarter fiscal 2014 earnings of 76 cents per share
(excluding restructuring charges). The earnings exceeded the
Zacks Consensus Estimate of 74 cents by 2.7% and management's
guidance range of 67 cents to 71 cents.
Other stocks in the consumer staples sector worth
NU Skin Enterprises Inc.
Reckitt Benckiser Group plc
). Both the stocks carry a Zacks Rank #1 (Strong Buy).
ESTEE LAUDER (EL): Free Stock Analysis Report
NU SKIN ENTERP (NUS): Free Stock Analysis
RECKITT BENCKSR (RBGLY): Get Free Report
ELIZABETH ARDEN (RDEN): Free Stock Analysis
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