Zacks Investment Research downgraded
Elizabeth Arden, Inc.
to a Zacks Rank #5 (Strong Sell) on Aug 13, following dismal
fourth-quarter and fiscal 2013 results announced last week.
Why the Downgrade?
Elizabeth Arden has witnessed sharp downward estimate
revisions after reporting lower-than-expected fourth quarter and
fiscal 2013 results. Shares of this makeup and skin care company
crashed after the announcement and given its weak outlook for the
upcoming fiscal year it has more downside left.
On Aug 8, Elizabeth Arden reported fiscal fourth-quarter
earnings per share of 10 cents, missing the Zacks Consensus
Estimate by 68.8% and the year-ago earnings by 64.3% due to lower
revenues and poor margins. Revenues rose only 0.8% to $267.9
million and missed the Zacks Consensus Estimate of $289
The fiscal 2013 earnings and revenues also missed the Zacks
Consensus Estimates and fell short of the company's expectations.
The company's growth expectations for the Elizabeth Arden brand -
one of the most widely recognized beauty brands in the world -
proved to be too optimistic leading the company to perform below
expectations in the year. Additionally, lower-than-expected
orders from one of the largest North American mass retail
customers and a weak performance in Europe, especially in the
U.K., pulled down revenues in both fourth quarter and fiscal
In addition, Elizabeth Arden issued a relatively weak outlook
for fiscal 2014. 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
The Zacks Consensus Estimate for 2014 decreased a sharp 22.1%
to $2.19 per share over the last 7 days as all the estimates were
revised downwards. Estimates for fiscal 2015 went down 23.6% over
the same timeframe.
Other Stocks to Consider
Other companies in the cosmetics industry that are currently
doing well include
Inter Parfums Inc.
Nu Skin Enterprises Inc.
Helen of Troy Limited
). While IPAR and NUS carry a Zacks Rank #1 (Strong Buy), HELE
holds a Zacks Rank #2 (Buy).
HELEN OF TROY (HELE): Free Stock Analysis
INTER PARFUMS (IPAR): Free Stock Analysis
NU SKIN ENTERP (NUS): Free Stock Analysis
ELIZABETH ARDEN (RDEN): Free Stock Analysis
To read this article on Zacks.com click here.