Elizabeth Arden's fiscal Q1 net income rose to US$9.2M compared with US$4.9M for the prior year period due in part to robust sales in skin care, color cosmetic portfolio; net sales increased 6.6% year-over-year to US$303.5M
November 3, 2011
Elizabeth Arden, Inc., a global prestige beauty products company, today announced financial results for its first fiscal quarter ended September 30, 2011.
FIRST QUARTER RESULTS
For the quarter ended September 30, 2011, the Company reported net sales of $303.5 million, an increase of 6.6%, as compared to the first quarter of the prior fiscal year. Excluding the favorable impact of foreign currency translation, net sales increased by 3.2%.
Net income per diluted share for the first quarter ended September 30, 2011 was $0.31, as compared to net income per diluted share of $0.17 for the prior year period. For the prior year period, net income per diluted share was $0.18, excluding expenses associated with the Company's Global Efficiency Re-engineering initiative. A reconciliation between GAAP and adjusted results can be found in the tables and footnotes at the end of this press release.
Net sales of the Company's international business increased by 16.6%, or by 7.5% at constant rates, driven by growth in the travel retail and distributor markets and in Asia. Net sales in North America grew by 1.6%, or 1.1% at constant rates, and were balanced across the prestige and mass businesses. Gross margins increased by 180 basis points despite a negative impact of $1.5 million, or 50 basis points, from foreign currency transaction losses during the quarter. EBITDA margins expanded by 130 basis points and included a total of $3.5 million, or 115 basis points, from foreign currency transaction losses.
Mr. Beattie commented, "We had another quarter of strong growth for the Elizabeth Arden brand and are progressing with our re-branding initiative. Global sales of Elizabeth Arden branded products grew by 14% this quarter with sales of the skin care and color cosmetic portfolio increasing by 22%. Sales of Britney Spears and Elizabeth Taylor fragrances also rose by 14% and 16%, respectively. The Taylor Swift fragrance Wonderstruck was successfully launched this quarter, and we are excited by the early results. Looking forward, despite the uncertain economic environment globally, we remain confident that our identified initiatives to drive sales increases across our brand portfolio and improve margins will result in strong cash flow and earnings growth for fiscal 2012."
For the second quarter of fiscal 2012, the Company is introducing guidance for net sales of $424 million to $434 million, or an increase of 4.5% to 7.0% over the prior year period, and for net income per diluted share of $1.32 to $1.42, or an increase of 11.0% to 19.0% as compared to the second quarter of the prior fiscal year. The net sales guidance for the second quarter assumes a favorable impact from foreign currency rates of approximately 0.5%.
The Company is also confirming its guidance for fiscal 2012 for a net sales increase of 5.0% to 6.0% over the prior fiscal year, including a favorable impact from foreign currency rates of approximately 0.5%. The Company also confirms its guidance for earnings per diluted share of $1.90 to $2.00 and for a gross margin increase of 200 to 225 basis points as compared to fiscal 2011.
The Company also announced that on September 20, 2011, the rating on the Company's $250 million aggregate principal amount of 7 3/8% Senior Notes due March 2021 was upgraded by Standard & Poor's to a B+ from a B, with the outlook revised to positive from stable reflecting the Company's operating momentum and improved credit measures.
The guidance assumes foreign currency rates as of the end of October. 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.
CONFERENCE CALL INFORMATION
The Company will host a conference call today at 11:00 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 3, 2011.
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 formulas, the celebrity fragrance brands of Britney Spears, Elizabeth Taylor, Mariah Carey, Taylor Swift, and Usher; the designer fragrance brands of Juicy Couture, Alberta Ferretti, Alfred Sung, 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.