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Stocks: Breaking News: Elizabeth Arden Posts Improved Results

Breaking News
Elizabeth Arden Posts Improved Results
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March 19, 2003

NEW YORK -- Elizabeth Arden Inc. (RDEN) posted a narrower loss after the payment of preferred dividends in its fiscal fourth quarter, as stepped-up advertising and strong performance by new fragrance brands helped boost sales.

The fragrance and beauty products company Wednesday reported net income of $473,000 for the quarter ended Jan. 31, compared with a net loss of $19.2 million a year earlier.

After payment of preferred dividends, however, the company posted a loss of $440,000, or two cents a share, compared with a year-earlier loss of $20.1 million, or $1.14 a share. Analysts surveyed by Thomson First Call had expected a loss of five cents a share.

Sales jumped 18% to $169.8 million from $144.2 million. Elizabeth Arden credited an increase in advertising and promotional spending, particularly its "Open for Beauty" campaign featuring Catherine Zeta-Jones, and a strong internationally launch of its fragrance, ardenbeauty.

The company said its performance was also aided by its restructuring of distribution, service and financial information systems.

For the full year ended Jan. 31, Elizabeth Arden posted a profit of $18.2 million, compared with a year-earlier loss of $29.8 million. After the payment of preferred dividends, the company said it earned $14.5 million, or 78 cents a share, for fiscal 2003, compared with a loss of $33.3 million, or $1.92 a share, a year earlier. Sales increased 13% to $752 million from $668.1 million in fiscal 2002.

Looking ahead, Elizabeth Arden said it expects a 5% to 7% increase in sales for the full fiscal year 2004, as well as a 20% to 25% increase in diluted per-share earnings. That outlook would put fiscal-2004 earnings at roughly 94 cents to 98 cents a share. Analysts are looking for earnings of $1.04 a share for the year.

Elizabeth Arden said it restructured its sales force during fiscal 2003 and expects to absorb any associated costs in the first half of fiscal 2004. The company said it should see the benefits of the restructuring in its second-half results.

For the first half of fiscal 2004, Elizabeth Arden forecasts a per-share loss before the effect of a tax benefit, in line with year-earlier results, as the company's increased advertising and promotional costs are spread over the seasonally slow first and second quarters.

Over the long term, the company anticipates top-line growth of 4% to 6% and more than 20% annual growth in per-share earnings.

Elizabeth Arden said its forecast assumes some degree of uncertainty because of the challenging retail environment in the U.S. and world-wide geopolitical events. The outlook doesn't assume any change in exchange rates.

Separately Wednesday, Elizabeth Arden named Paul West, 53 years old, president and chief operating officer. He had been executive vice president and chief operating officer of the beauty products firm.

-Amy Reilly, Dow Jones Newswires; 609-520-7806

(Tim Paradis contributed to this article.)

(END) Dow Jones Newswires

03-19-03 1033ET

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