Aug 11, 2011
Elizabeth Arden profit helped by cost cuts
Aug 11, 2011
August 11 - Elizabeth Arden posted a higher-than-expected quarterly profit on Thursday, helped by the weak dollar and cost cuts, and forecast earnings above analysts' expectations for the current fiscal year.
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Elizabeth Arden has been outsourcing its non-core business activities, including packing and print, as part of a larger cost-cutting move.
Earnings for the maker of skin-care products and a host of celebrity fragrances totaled $5.4 million, or 18 cents a share, compared with $2.3 million, or 8 cents a share, in the same quarter of 2010. Analysts on average forecast 10 cents a share, according to Thomson Reuters I/B/E/S.
Net sales for the fourth quarter were $253.8 million, an increase of 11 percent from $228.2 million last year. Excluding the impact of the weak dollar, which boosts the dollar value of sales made overseas, sales rose 7.7 percent
Elizabeth Arden forecast earnings of $1.90 to $2.00 per share for 2012, and 25 cents to 35 cents for the first quarter. The guidance takes into account favorable currency rates of about 2 percent and strong net sales growth in North America and Europe.
Analysts on average forecast earnings of 26 cents for the first quarter and $1.49 a share for the year
The cosmetics company also said it would acquire the trademarks for several fragrance brands from Liz Claiborne Inc and lower the effective royalty rate it pays to make other fragrance brands under the Juicy Couture and Lucky Brand names. The change in the licensing agreement with Liz Claiborne should modestly boost earnings in fiscal year 2012, Elizabeth Arden said.
The company's shares rose to $27.50 in premarket trading from Wednesday's Nasdaq close of $26.64.
(Reporting by Eunju Lie; Editing by Derek Caney and Maureen Bavdek)
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