Net Sales of $285 Million; Increase of 7.4%
GAAP EPS of $0.17 and Adjusted EPS of $0.18; Increase of 260%
NEW YORK, Nov. 4, 2010 (GLOBE NEWSWIRE) -- Elizabeth Arden, Inc. (Nasdaq:RDEN), a global prestige beauty products company, today announced financial results for its first fiscal quarter ended September 30, 2010.
FIRST QUARTER RESULTS
For the quarter ended September 30, 2010, the Company reported net sales of $284.8 million, an increase of 7.4%, as compared to the first quarter of the prior fiscal year. Excluding the unfavorable impact of foreign currency translation, net sales increased by 8.1%.
Net income per diluted share for the quarter ended September 30, 2010 was $0.17, as compared to net income per diluted share of $0.00 for the prior year period. Excluding expenses associated with the Company's Global Efficiency Re-engineering initiative, net income per diluted share for the three months ended September 30, 2010 was $0.18. For the prior year period, net income per diluted share excluding Global Efficiency Re-engineering and restructuring expenses was $0.05. A reconciliation between GAAP and adjusted results can be found in the tables and footnotes at the end of this press release.
E. Scott Beattie, Chairman, President and Chief Executive Officer of Elizabeth Arden, Inc., commented, "Through the first quarter, our business overall performed as we expected. Sales and earnings results were ahead of prior guidance, driven primarily by continued strong momentum in our international business. In constant currencies, net sales of our international business increased by 14%, with sales in Europe and our travel retail and distributor markets increasing by 14% and 31%, respectfully. Our net sales in North America rose by 6%."
Mr. Beattie continued, "We are pleased with the performance of our brands and the progress we are making with our global brand marketing initiatives. Sales of Elizabeth Arden branded skin care products rose by 12% in the first quarter, and sales of our fragrance business grew by 8.0% overall and 17% in Europe. As we head into the holiday period, we are encouraged and expect our key brands and launches to perform well."
OUTLOOK
For the second quarter of fiscal 2011, the Company is introducing guidance for net sales of $393 million to $403 million and net income per diluted share of $0.90 to $1.00.
The Company is raising its annual net sales guidance for the fiscal year ending June 30, 2011 to a net sales increase of 3.5% to 4.5%, as compared to the prior fiscal year, and confirming its earnings guidance of a range of $1.15 to $1.25 per diluted share. The current annual net sales guidance assumes minimal impact from foreign currency translation. The Company also continues to expect gross margins to increase by 225 to 250 basis points for fiscal 2011 as compared to fiscal 2010, and cash flow from operations for fiscal 2011 to be in the range of $70 million to $80 million.
The guidance assumes October foreign currency rates and excludes expenses associated with the Company's Global Efficiency Re-engineering initiative. The Company notes that continued global economic uncertainty may have a negative effect on retailer and consumer confidence and demand, and, along with the foreign currency volatility, makes forecasting difficult. The Company believes that net sales and earnings guidance, excluding the impact of foreign currency translation beyond assumed rates, and expenses associated with the Company's Global Efficiency Re-engineering initiative, as applicable, facilitates period to period comparisons of the Company's operating and financial performance on a consistent basis.
CONFERENCE CALL INFORMATION
The Company will host a conference call today at 9:30 a.m. Eastern Time. All interested parties can listen to a live web cast of the Company's conference call by visiting the Investor Relations section on the Company's web site at http://www.elizabetharden.com. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible on the Company's web site until December 4, 2010.
Elizabeth Arden is a global prestige beauty products company with an extensive portfolio of prestige beauty brands sold in over 100 countries. The company's brand portfolio includes Elizabeth Arden skincare, color, and fragrance products, PREVAGE® anti-aging treatment, the celebrity fragrance brands of Britney Spears, Elizabeth Taylor, Mariah Carey, Hilary Duff, and Usher; the designer fragrance brands of Juicy Couture, Alberta Ferretti, Alfred Sung, Badgley Mischka, Bob Mackie, Geoffrey Beene, Halston, John Varvatos, Kate Spade, Lucky Brand, and Rocawear; and the lifestyle fragrance brands Curve, Giorgio Beverly Hills, and PS Fine Cologne.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Elizabeth Arden, Inc. is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "should," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our guidance and expectations regarding net sales, earnings, gross margins, operating cash flow and returns on invested capital, and the costs, savings and benefits we expect in connection with our Global Efficiency Re-engineering initiative and related restructuring plan. In addition, any such statements are qualified in their entirety by reference to, and are accompanied by, the following key factors that have a direct bearing on our results of operations:
- factors affecting our relationships with our customers or our customers' businesses, including the absence of contracts with customers, our customers' financial condition, and changes in the retail, fragrance and cosmetic industries, such as the consolidation of retailers and the associated closing of retail doors as well as retailer inventory control practices, including, but not limited to levels of inventory carried at point of sale and practices used to control inventory shrinkage;
- risks of international operations, including foreign currency fluctuations, hedging activities, economic and political consequences of terrorist attacks, disruptions in travel, unfavorable changes in U.S. or international laws or regulations, diseases and pandemics and political instability in certain regions of the world;
- our reliance on third-party manufacturers for substantially all of our owned and licensed products and our absence of contracts with suppliers of distributed brands and components for manufacturing of owned and licensed brands;
- delays in shipments, inventory shortages and higher costs of production due to the loss of or disruption in our distribution facilities or at key third party manufacturing or fulfillment facilities that manufacture or provide logistic services for our products;
- our ability to respond in a timely manner to changing consumer preferences and purchasing patterns and other international and domestic conditions and events that impact consumer confidence and demand, such as domestic or global recessions;
- our ability to protect our intellectual property rights;
- the success, or changes in the timing or scope, of our new product launches, advertising and merchandising programs;
- the quality, safety and efficacy of our products;
- the impact of competitive products and pricing;
- our ability to (i) implement our growth strategy and acquire or license additional brands or secure additional distribution arrangements, (ii) successfully and cost-effectively integrate acquired businesses or new brands, and (iii) finance our growth strategy and our working capital requirements;
- our level of indebtedness, our ability to realize sufficient cash flow from operations to meet our debt service obligations and working capital requirements and the restrictive covenants in our revolving credit facility and the indenture for our 7 3/4% senior subordinated notes;
- changes in product mix to less profitable products;
- the retention and availability of key personnel;
- changes in the legal, regulatory and political environment that impact, or will impact, our business, including changes to customs or trade regulations, laws or regulations relating to product ingredients or other chemicals, or accounting standards or critical accounting estimates;
- the success of our Global Efficiency Re-engineering initiative, including our transition to a turnkey manufacturing process and implementation of our new Oracle financial accounting and order processing system;
- the potential for significant impairment charges relating to our trademarks, goodwill or other long-lived assets that could result from a number of factors, including downward pressure on our stock price; and
- other unanticipated risks and uncertainties.
We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended June 30, 2010.
CONTACT: Elizabeth Arden, Inc. Marcey Becker, Senior Vice President, Finance (212) 212-1068 Integrated Corporate Relations Investor/Press Contact: Allison Malkin Michael Fox (203) 682-8200