Arden optimistic of growth despite 4Q sales drop

ELIZABETH Arden Inc.’s fourth quarter sales ended June 30 dropped from $191.7 million to $175.5 million. A 4% uptick in international sales was countered by a 14% slide in North America sales. Adjusted sales fell by 6.2% to $188.7 million, with analysts' consensus revenue at $188 million.

Net sales for the fiscal year ended June 30, 2015 reached $971.1 million, dropping 14.9% from 2014 at $999.3 million on an adjusted basis or 13.1% at constant foreign currency rates. Even as the S&P 500 has expanded by 2%, the stock, which was halted for news dissemination, has slumped 52% year to date.

Notwithstanding the sales drop, the beauty products company boasted sales within its flagship unit were on the rise. It expects net sales for fiscal 2016 to exceed 2015 figures.

Chairman and CEO E. Scott Beattie remained certain of growth, citing continued improvements on the company’s balance sheet and cash flow metrics. He also said the company finished the fiscal year ahead of plan, resulting in $54 million in operating cash flow for fiscal 2015.

“This is the second consecutive quarter of sales growth for the Elizabeth Arden brand. The 7% constant currency increase this quarter is on top of a 9% constant currency increase in the third fiscal quarter. This gives us confidence as we head into the launch of the new Elizabeth Arden brand marketing campaign this fall, which is accompanied by a richer innovation pipeline," Mr. Beattie said.

Mr. Beattie hopes cost-cutting and productivity initiatives and new leadership will further boost the company’s performance in the months ahead. 

He noted the series of business changes the company undertook over the past year, including changes to the leadership and organizational structure announced last July as part of efforts to strengthen the company.

“Our appointment of JuE Wong as president, Elizabeth Arden brand, and Joel Ronkin as president, global fragrances, should better align our sales and marketing organizations to improve the commercial execution of the business and deliver our financial metrics. With a stronger innovation pipeline, across both the Elizabeth Arden brand and our core fragrances, improved go-to-market capabilities, and reinvestment of savings from our performance improvement initiatives, we expect to return to consistent sales growth and margin expansion in fiscal 2016,” Mr. Beattie stated.