NEW YORK — Due to a number of “external challenges” Elizabeth Arden Inc. faced in fiscal 2006 — including the Federated and May department store merger — the company experienced a net loss of $1.9 million in the fourth quarter, noted chairman and chief executive officer E. Scott Beattie.
“Although we met our previously amended guidance, the general disruption during the second half of the year had an impact on sales and earnings,” Beattie said during a conference call with analysts. “It’s not just a North American or U.S. issue. Consolidation has impacted our markets in Canada, the U.K. and Australia, as more and more department store retailers are merged or private equity groups are buying them out.”
Wal-Mart’s push to reduce inventory, a move that was followed by many other mass retailers, also negatively effected Arden’s sales in the second half of fiscal 2006, said Beattie.
The company reported net sales of $189.9 million in the quarter ended June 30, up slightly from $187.1 million a year prior. It experienced a net loss of $1.9 million in the quarter, or 7 cents per diluted share, compared with a loss of $4.5 million, or 16 cents per share, a year earlier. Net income for fiscal 2006 was $32.8 million, down 14.7 percent from $37.6 million in fiscal 2005. Net sales for fiscal 2006 were $954.6 million, up 3.7 percent from $920.5 million a year prior.
The company, which recently completed strategic acquisitions of the brand licenses for Riviera Concepts and the prestige fragrance distributor Sovereign Sales, is optimistic for fiscal 2007. Arden will launch With Love…Hilary Duff and Danielle by Danielle Steel this fall. Next year, it expects to launch two fragrances, one Elizabeth Arden scent and one under a license with Mariah Carey. The company also partnered with Sephora to sell a Prevage product exclusively in Sephora stores beginning in January.