Fragrance Fueling Business at Elizabeth Arden

The company’s fragrance portfolio continued to add market share, with both prestige and mass retailers gaining 2.15% and 2.1%, respectively. Sales growth was driven by the recently acquired brands, new launches, including Justin Bieber’s Girlfriend, Pink Friday Nicki Minaj and Taylor Swift Wonderstruck Enchanted, which all ranked among the top fragrance launches in US prestige department stores for the holiday season, and growth in existing pillar fragrance brands.

Performance at prestige retailers was strong with a number of the Company’s key existing brands as well, with the largest retail sales increases posted by the Juicy Couture, John Varvatos and Curve fragrances.

Net sales of Elizabeth Arden branded products decreased 6% for the quarter and 6.5% fiscal year-to-date in North America. In terms of retail sales, overall retail sales at Elizabeth Arden counters in North America were flat, with the company’s recently converted Elizabeth Arden flagship counters increasing 24% year over year since conversion through the end of December. Internationally, net sales grew 11% for the second fiscal quarter and 10% for the fiscal year-to-date.

E. Scott Beattie, chairman, president and chief executive officer of Elizabeth Arden, Inc., commented, “Second quarter sales and earnings were up solidly from the prior year, with strong retail sales performance within our North America and International businesses. Nonetheless, our net sales results were below original guidance due to lower than forecasted sales in department stores as well as softer than anticipated holiday sales at one of our major mass retail accounts. Despite strong sales growth among many of our global affiliates, international net sales were impacted by lower than expected inventory replenishment in our travel retail business and weakness in Greater China.”

Beattie continued, “Over the course of the past few months, we successfully completed the conversion of our Elizabeth Arden flagship doors and are very excited with the momentum of sales increases. The flagship model was established as a way for us to test, learn, and gather feedback on the repositioning of the Elizabeth Arden brand as well as build confidence in the growth potential of the brand with our key retail partners. Flagship counters in the North American markets were converted earlier this fall, with all door conversions complete by the end of October. US flagship doors delivered 24% year-over-year retail sales growth from conversion through the end of December, well in excess of the US prestige category which grew 5% for the second quarter.

“The timing of the conversion of international flagship doors was staggered across the quarter due to retailer constraints. International flagship doors delivered 9% retails sales growth from conversion, reflecting later conversion dates as compared to the flagship doors in North America, and are gaining momentum by the week. The most recent weeks have achieved retail sales growth of 23%. Given our early success, we plan to extend key elements of the flagship model to the next tier of approximately 200 doors globally during the remainder of fiscal 2013 and drive sales growth behind the roll out of new products for our international markets during the second half of the fiscal year.”

For the six months ended Dec. 31, 2012, the company reported a 10.8% rise in net sales to $812.5 million.

Based on the retail trends year-to-date and the seasonally slower fragrance market in the second fiscal half, the company is reducing its second half revenue and earnings guidance. For the full fiscal year ending June 30, 2013, the company currently expects net sales to increase by 9% to 11%, according to the report.