Prestige beauty company Elizabeth Arden recorded a net sales decrease of 17.2% during the fiscal quarter ended 31 December.
On an adjusted basis, net sales totalled $346.2m,. The net loss per diluted share was $1.90.
E. Scott Beattie, Chairman, President and Chief Executive Officer, identified that the company's Chinese and celebrity fragrances businesses contributed to the poor results.
He said: “Our management team, with the full engagement of our Board of Directors and Rhone Capital, is focused on repositioning our brand portfolio and cost structure to return our business to sustainable growth and profitability. Fiscal 2015, as we have stated, is a transitional year as we work to set a strong foundation for the future. In China, we are making tough decisions in support of a new distribution strategy to drive a healthier and more profitable business.
“Aside from this market and the continued decline in sales of our celebrity fragrances, the remainder of our business, by and large, performed as expected during the quarter. Our balance sheet and cash flow metrics continue to improve, resulting in $37m in operating cash flow for the first half of our fiscal year. Our performance improvement plans continue to drive down costs and improve efficiencies in our business. Indirect overhead savings remain ahead of budget through the second quarter, and we remain committed to achieving a total of $40m to $50m of annualised savings.”
In the second half of fiscal 2015, Elizabeth Arden expects to see net sales increases in the international segment compared with the prior year, although it also expects declines in celebrity fragrances impacting the North American segment. It also predicts stronger cash flow and gross margin expansion due to improved pricing, better sales mix, lower discounts and realisation of reduced supply chain and product costs.
