Elizabeth Arden Earnings Stink, Blames Weather; Stock Tumbles 15%

Tyler Durden's picture

Q1 2014 was the first negative EBITDA quarter for Elizabeth Arden since before Lehman (June 2008) and worst quarterly EBITDA loss for the company since Q3 2001... and the rest of the data was terrible:

  • *ELIZABETH ARDEN 3Q SALES $210.8M, EST. $255.7M
  • *ELIZABETH ARDEN 3Q ADJ. LOSS/SHR 84C, EST. BREAK-EVEN

The reason... come on you can guess... "an unprecedented number of weather-related store closures in our North America business during the quarter."

 

EBITDA...

 

The data:

Net sales for the third fiscal quarter were $210.8 million, a decrease of 20.3%, or 19.4% excluding the impact of foreign currency rates. Net loss per diluted share was $0.89. On an adjusted basis, excluding non-recurring items, net loss per diluted share was $0.84. The non-recurring items include Elizabeth Arden repositioning and restructuring costs. 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 North America segment decreased 23% to $121.9 million from $158.7 million in the prior year. The decline in net sales was primarily due to fewer fragrance launches in the fiscal 2014 period as compared to the prior year and lower replenishment orders at a number of non-prestige retail accounts.

The excuse...

E. Scott Beattie, Chairman, President and Chief Executive Officer commented, “Clearly these results are not indicative of the strength and potential of our brand portfolio. We have been hampered this year by weak performance in our North American mass fragrance business and a global environment that has been highly promotional. We also did not have the same level of significant fragrance innovation as we did last year. This coincided with an unprecedented number of weather-related store closures in our North America business during the quarter, which is our seasonally weakest quarter, exacerbating the impact of these other factors and contributing to the weak overall results.”

So if some cold weather can cause your entire business model to collapse to 13 year low EBITDA... then maybe it is time for that "strategic alternative"...

The Company has engaged Goldman, Sachs & Co. to assist the Board of Directors in exploring potential strategic alternatives to enhance shareholder value and to accelerate the growth and maximize the value of its brand portfolio. 

The reaction...