Elizabeth Arden Inc. (RDEN) posted a narrower quarterly loss on Thursday, topping analysts' expectations, as expanded distribution of the popular Curious by Britney Spears (search) fragrance boosted sales.
The company reached beyond fans of fragrances such as Elizabeth Taylor's (search) White Diamonds by selling the scent named after Spears, the one-time teen pop icon, and now plans to go after NASCAR fans with new products while also serving its core female demographic with a fresh $150 anti-aging treatment.
Curious was launched in U.S. department stores last fall and has since expanded into other stores such as Wal-Mart Stores Inc. (WMT) with smaller, lower-priced bottles.
"The strength appears to be coming primarily from the expansion of the Britney Spears Curious line into the mass retailer channel in the U.S. as well as continued international expansion of the line," said CIBC analyst Joseph Altobello, who has a "neutral" rating on the shares.
Building on the success of Curious, Elizabeth Arden said it plans to launch Fantasy Britney Spears, a higher priced, more sophisticated fragrance, in U.S. department stores this fall and internationally early next year.
The loss for the fiscal fourth quarter, which ended June 30, narrowed to $4.5 million, or 16 cents per share, from $28.5 million, or $1.12 per share, a year earlier. Elizabeth Arden typically reports a fourth-quarter loss, reflecting slower sales during the non-holiday period.
Excluding a charge related to the sale of property and some related assets, the company posted a loss of 11 cents per share, compared with a loss of 35 cents a year earlier.
Analysts, on average, expected the New York-based company to post a loss of 13 cents per share, according to Reuters Estimates.
Elizabeth Arden shares rose 95 cents, or 4 percent, to $24.35 after hitting $24.49 on the New York Stock Exchange.
Net sales jumped 21 percent to $187.1 million, surpassing Wall Street's average revenue forecast of $171.1 million, aided by Curious and stronger sales of skin care and color items.
The company said it plans to start selling Prevage, its anti-aging treatment being created in alliance with Botox Cosmetic-maker Allergan Inc. (AGN (search)), at U.S. department stores this fall and in international markets starting next year.
Elizabeth Arden expects to have Prevage in 2,000 stores in time for the key holiday season, including about 200 higher-end stores that do not already carry Elizabeth Arden products.
The company also expects to see growth from a licensing pact with International Speedway Corp. (ISCA), which owns, Daytona Speedway, famed for its Daytona 500 auto race. Products from that pact could be launched in fiscal 2006 or 2007.
Elizabeth Arden forecast fiscal 2006 earnings of $1.50 to $1.55 per share, excluding some items, with full-year sales of $1 billion to $1.015 billion. The company forecast fiscal 2006 net income of $1.37 to $1.42 per share.
Analysts, on average, expect the company to earn $1.52 per share in fiscal 2006, on sales of about $969.6 million.
Elizabeth Arden also said it elected Maura Clark to its board on Aug. 9 as George Dooley retired to focus on personal philanthropic activities. Clark, senior vice president of strategy and mergers and acquisitions at Centrica Direct Energy, will serve on the audit and nominating committees, the company said.