UPDATE 2-Elizabeth Arden to explore strategic options as sales plunge
* Hires Goldman Sachs to explore strategic alternatives
* 3rd-quarter sales fall 20 pct, North America sales fall 23 pct
* Loss of $0.84 per share vs est breakeven
* Shares down 16 pct after market (Adds CEO quote, details on perfume business)
May 12 (Reuters) - U.S. cosmetics company Elizabeth Arden Inc said it is evaluating strategic alternatives after reporting much weaker-than-expected quarterly results due to falling demand for its perfumes, sending its shares down 16 percent after the bell.
The company said it has engaged Goldman Sachs to explore strategic alternatives but did not give details.
Reuters reported in April that Elizabeth Arden had hired Goldman Sachs to explore a sale and had reached out to a small group of potential buyers.
South Korea's LG Household & Healthcare Ltd said last month it was considering a bid for Elizabeth Arden.
Elizabeth Arden, known for its skin care brands such as Ceramide and Prevage, said on Monday heavy price discounting and promotional activity have hurt the fragrance market and there was "strong erosion" at several brands including celebrity fragrances Justin Bieber and Taylor Swift.
"The reduced store traffic, the seasonal weakness, and the unprecedented store closings due to harsher winter weather, all contributed to continued poor demand and replenishment in the fragrance category," Chief Executive Scott Beattie said on a post-earnings conference call.
The company also said it was planning to save $40 million to $50 million a year by implementing a restructuring and cost savings program.
Beattie said the company was considering to rely more on distributors and regional joint ventures in its international business.
Elizabeth Arden's North American sales declined 23 percent to $121.9 million in the third quarter as it launched fewer fragrances in fiscal 2014 and some retail customers lowered replenishment orders.
The company sells its products to U.S. chains such as Wal-Mart Stores Inc, Target Corp and Kohl's Corp , as well as department stores including Nordstrom Inc and Macy's Inc.
Total revenue fell 20 percent to $210.8 million.
The company's net loss widened to $26.4 million, or 89 cents per share, in the quarter ended March 31, from $1.3 million, or 4 cents per share, a year earlier.
Excluding items, the company's loss was 84 cents per share.
Analysts on average had expected the company to break even on a per-share basis on revenue of $256.86 million, according to Thomson Reuters I/B/E/S.
Elizabeth Arden's shares closed at $35.63 on Monday. The company's shares have fallen 21.9 percent in the 12 months to Monday's close. (Reporting by Shailaja Sharma in Bangalore; Editing by Don Sebastian)