Elizabeth Arden Inc.
) has been reporting lower-than-expected earnings for the past few
quarters due to poor sales and persistent declining demand in the
fragrance business. In order to boost sales of the fragrance
sector, the prestige beauty product company entered into an
agreement with designer fashion brand, Wildfox Couture, to develop
and market Arden's flagship fragrance brands.
Wildfox is a clothing and accessories brand sold in selected
boutiques and department stores over 30 countries, including the
U.K., France, Spain, Germany, Brazil, Japan, South Korea,
Australia, Russia and Taiwan. The brand was founded by Jimmy
Sommers and Kimberley Gordon.
The partnership is a strategic fit for Elizabeth Arden as it
will be able to reach young, fashion-conscious consumers who prefer
the popular designer knitwears by Wildfox Couture. For Wildfox, the
agreement will provide a ready platform to debut in the fragrance
In the recently reported second quarter fiscal 2014 results,
Elizabeth Arden's earnings of 84 cents fell short of the year-ago
earnings as well as the Zacks Consensus Estimate due to continued
poor demand in the fragrance business. Reduced store traffic and
unprecedented store closings due to harsh winter resulted in the
decline in the fragrance category.
Net sales of $210.8 million of the Zacks Rank #5 (Strong Sell)
company also lagged year-ago results and the Zacks Consensus
Estimate by 20.3% and 17.7%, respectively, due to lower
year-over-year sales in all the geographical segments. Net sales of
branded skin care, color and fragrance products declined 19% in the
quarter due to poor demand.
Other Stocks to Consider
Other stocks in the industry that are performing well at the
current level and are worth considering include
Ingles Markets, Inc.
). While Coty sports a Zacks Rank #1 (Strong Buy), Kroger and
Ingles Markets have a Zacks Rank #2 (Buy).
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ELIZABETH ARDEN (RDEN): Free Stock Analysis
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INGLES MARKET A (IMKTA): Free Stock Analysis
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