Zacks Investment Research downgraded
Elizabeth Arden Inc.
) to a Zacks Rank #5 (Strong Sell) on Feb 22, 2014 following weak
results in the second quarter fiscal 2013.
Why the Downgrade?
Elizabeth Arden witnessed sharp downward estimate revisions
after reporting weak second-quarter fiscal 2014 results on Feb 5,
2014. Notably, The Miramar, Fla.-based Cosmetics Company withdrew
its fiscal 2014 guidance on Jan 21, 2014.
Elizabeth Arden's second-quarter earnings of $1.08 fell short
of the year-ago earnings by 31.6% due to lower sales and gross
margins. Net sales of $418 million also lagged year-ago results
by 10.1% due to lower year-over-year sales in all the
geographical segments. Gross profit declined 17.3% year over year
to $200.0 million due to lower sales and higher depreciation
related to cost of goods sold.
Weak holiday sales due to bad weather conditions in December
and January were responsible for the weak results in the reported
quarter. Moreover, the company also reported higher inventory due
to low traffic in the company's mass retail accounts, and reduced
discretionary spending by consumers facing macroeconomic
However, both earnings and sales inched past Zacks Consensus
Estimate. We would like to remind investors that the company
released weak preliminary sales results for the second quarter on
Jan 21, 2014 which led to the sharp downward revision of
estimates. The actual results were in line with the revised
The Zacks Consensus Estimate came down 27.2% to $1.07 for the
second quarter over the last thirty days. For fiscal 2014 most of
the estimates were revised downward over the last thirty days,
sinking the Zacks Consensus Estimate by .6% to $2.09.
Like Elizabeth Arden, many U.S.-based retailers like
Ross Stores Inc
) have registered lower-than-expected sales during the holiday
FREDS INC (FRED): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
ELIZABETH ARDEN (RDEN): Free Stock Analysis
ROSS STORES (ROST): Free Stock Analysis
To read this article on Zacks.com click here.