Elizabeth Arden Inc. (RDEN, Financial) will release its third quarter 2014 earnings after the bell at 4:30 p.m., EST, on Monday, May 12, 2014. A simultaneous webcast of the earnings report is available here starting at 4:30 p.m., EST. Elizabeth Arden cosmetics and skin care is sold in over 120 countries. Along with its Red Door line, the company sells celebrity and designer fragrances including Elizabeth Taylor, Halston and Giorgio Beverly Hills.
Analysts Expect:
- EPS ranging from $-0.09 to $0.03 with a target of $-0.01.
- Revenue ranging from $247 million to $264 million with a target of $254 million.
Revenue/EPS Recap
Over the past 12 months, Elizabeth Arden has returned a mixed bag of earnings to investors and analysts. The company’s North American sales continue to slide and European sales are still dropping. In the last quarter alone, North American sales fell 13%. The company’s high-end products have fallen out of favor with customers who are looking for similar products at a lower price. Elizabeth Arden adamantly refuses to lower its product prices or revamp specific brands to bolster sagging sales.
| Revenue | Q2 2014 | Q1 2014 | Q4 2013 | Q3 2013 |
| Estimate | $422M | $342M | $290M | $261M |
| Actual | $418M | $344M | $268M | $264M |
| Difference | -4M | +2M | -22M | +3M |
The economy has not been kind to retailers in general and Elizabeth Arden in particular. The company gutted its revenue estimates for the year and analysts adjusted their expectations accordingly. Since then, the company has missed EPS estimates twice in the past four quarters and only exceeded analyst estimates in first quarter 2014.
| EPS | Q2 2014 | Q1 2014 | Q4 2013 | Q3 2013 |
| Estimate | $1.12 | $0.15 | $0.33 | $0.02 |
| Actual | $1.08 | $0.22 | $0.10 | $0.02 |
| Difference | -0.04 | +0.07 | -0.23 | +0.00 |
Competitors
Elizabeth Arden’s primary competitors are Estee Lauder Companies Inc. (EL, Financial), Revlon Inc. (REV, Financial) and Inter Parfum Inc. (IPAR, Financial). Revlon’s first quarter 2014 revenue came in at $470 million while Estee Lauder posted third quarter 2014 revenue of $2.55 billion. Analysts are waiting to see if Elizabeth Arden can post the expected $254 million or if the company will miss the estimate again.
| Ă‚ | RDEN | EL | REV | IPAR |
| Price | $34.06 | $73.69 | $28.77 | $35.42 |
| Total Revenue | $418M | $2.5B | $469M | $121M |
| EPS (TTM) | $1.00 | $2.64 | $0.72 | N/A |
| Projected EPS Growth for 2015 | 23.85% | 12.83% | 14.29% | 18.89% |
Trade Considerations
Analysts are very bearish on Elizabeth Arden. All seven of the major firms covering Elizabeth Arden rate the company as underperform or neutral. The stock gapped downward on Jan. 16, 2014, from $34.88 to $27.70 on Jan., 17, 2014. When the company announced it had recently hired Goldman Sachs (GS, Financial) to assist with its potential sale to South Korea's LG Household & Healthcare, the stock gapped up to $33.30. Another potential buyer might be Cody who tried to buy Avon (AVP, Financial) in 2012 without success. The company may strongly consider selling to LG Household & Healthcare, Cody or a similar suitor should it miss another earnings estimate.
