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Beauty Industry, Mergers and Acquisitions

Elizabeth Arden Reports Decline In Celebrity Fragrances

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By: Jamie Matusow

Editor-in-Chief

Elizabeth Arden posted its financial results for its fourth fiscal quarter and year ended June 30, 2014 and says its loss was due to a “steeper than anticipated” decline in sales of celebrity fragrances – specifically, Justin Bieber and Taylor Swift.

Net sales for the fiscal year ended June 30, 2014, were $1.164 billion, a decrease of 13.4% from the prior year, or 12.8% excluding the impact of foreign currency rates.

On an adjusted basis, net sales were $1.174 billion, a decrease of 12.7% from the prior year, or 12.1% excluding the impact of foreign currency rates. The net loss per diluted share for the fiscal year ended June 30, 2014, was $4.90.

Net sales for the three months ended June 30, 2014, were $191.7 million, a decrease of 28.4%, as compared to the prior year.

By segment, for the 2014 fiscal year, net sales of the Company’s North America and International segments declined by 14% and 8% (at constant currency rates), respectively.

Retail sales at the Company’s Elizabeth Arden flagship counters have increased 9% in North America since conversion, and retail sales at the Company’s international flagship doors have increased 8% since conversion, or 16% excluding underperforming travel retail doors in Korea.

E. Scott Beattie, Chairman, President and Chief Executive Officer commented:

“Our primary focus as an organization is to improve performance and restore profitability and return on invested capital to levels consistent with historical results. In June 2014, we announced the 2014 Improvement Plan, which is expected to result in annualized savings of $27 million to $35 million. We remain committed to achieving a total of $40 million to $50 million of annualized savings upon full implementation of all of our cost-reduction efforts, and remain confident that we can get back to consistent improvement in quarter over quarter performance. Most of the changes to our organizational structure were implemented in the third and fourth quarters of fiscal 2014, which should position the Company for improved performance in fiscal 2015.”

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