Promotional intensity claims another victim

Leading beauty products manufacturer Elizabeth Arden is the latest company to cite an intensely promotional marketplace as the reason for worse-than-expected holiday season sales and profits.

The company said sales for its second quarter ended Dec. 31, would be in the range of $414 to $418 million and earnings per share would be between $1.13 and $1.16, substantially below sales of $468 million and earnings of $1.47 during the same period the prior year.

“Our results were significantly impacted by an increased level of highly promotional and discounted activity globally and weaker than anticipated holiday retail sales and replenishment orders at a number of our non-prestige retail accounts in North America,” said E. Scott Beattie, president and CEO of Elizabeth Arden. “While we are disappointed with these results, we made the strategic decision in the quarter not to participate fully in the heavy promotional and discounted environment.”

According to Beattie, the company’s recent results are not reflective of the underlying strength of its fragrance brand portfolio and the potential of the Elizabeth Arden brand, especially in international markets which were cited as the greatest opportunity area for profit growth.

Elizabeth Arden is the company behind some of the biggest names in beauty, including the flag ship Elizabeth Arden brand as well as celebrity fragrances such as Britney Spears, Elizabeth Taylor, Justin Bieber, Mariah Carey, Nicki Minaj, Taylor Swift, Usher and Jennifer Aniston and designer brands such as Juicy Couture, Alfred Sung, BCBGMAXAZRIA, Geoffrey Beene, Halston, Bob Mackie, Ed Hardy, John Varvatos, Lucky Brand, True Religion and Rocawear.