* Q3 adj loss $0.11/shr vs Wall Street view loss $0.15
* Sales rise 6.7 pct to $217 million
* Raises FY earnings guidance, confirms sales forecast
* Sees improved cash flow this year
* Shares up 7 percent at $18.04
(Adds looking for acquisitions, share buyback, outlet
By Jessica Wohl
CHICAGO, May 6 Elizabeth Arden Inc RDEN.O
posted a narrower-than-expected quarterly loss and raised its
profit forecast on Thursday, helped by strong international
growth and improved gross margins.
The cosmetics maker also raised its cash flow expectations
for its fiscal year, which ends in June, and kept its sales
Its shares were up 7 percent at $18.04 in midday trading
after rising as much as 10.8 percent.
Sales growth was led by Elizabeth Arden branded products as
well as Juicy Couture and Britney Spears fragrances, said
Chairman and Chief Executive E. Scott Beattie.
The company is selectively looking at buying brands,
especially those that would help it grow its European fragrance
business, Beattie said. [ID:nWEN4340]
He also said Arden would continue to with its share buyback
program on a selected basis.
In the United States, Arden's largest market, sales
continued to be better at mass retailers such as Wal-Mart
Stores Inc (WMT.N) than at department stores such as Macy's Inc
Wal-Mart sales are up in a "considerable" double-digit
range since the discount giant started putting more fragrances
on open shelves rather than in locked displays, Arden said.
But U.S. department stores have posted 20 consecutive
months of fragrance sales declines, Joel Ronkin, who runs
Arden's North American business, said during its quarterly
The continued pressure at U.S. department stores echoed
comments from larger cosmetics maker Estee Lauder Cos Inc
(EL.N). Last week, Lauder said weakness at those stores could
dampen its near-term cosmetics sales and gave a higher profit
forecast that fell short of Wall Street's expectations.
At Arden, much of the decline stemmed from department
stores returning discontinued brands. The company is also
seeing merchants reduce the number of brands they carry.
Arden hopes that new products will spur some growth. After
seeing a 50 percent rise in Juicy Couture fragrance sales so
far this year it will launch Peace, Love and Juicy Couture in
upscale stores in August. Other items include Mariah Carey's
Lollipop Bling, due in June, and Kate Spade fragrances, due out
in the fall.
Juicy Couture and Kate Spade are both owned by clothing
maker Liz Claiborne Inc LIZ.N, which has seen its shares sink
after it gave a disappointing forecast [ID:nN06246066].
Arden also opened its first outlet store in Miami and
executives said it plans to open several more.
BY THE NUMBERS
Arden lost $3.9 million, or 14 cents per share, in its
fiscal third quarter that ended on March 31, versus a loss of
$3.7 million, or 13 cents per share, a year earlier.
Excluding restructuring and other expenses, Arden posted a
loss of 11 cents per share. Sales rose 6.7 percent to $217
Analysts expected an adjusted loss of 15 cents per share on
$215.21 million in sales, according to Thomson Reuters
Arden has been reducing inventory and taking other steps to
improve its results. It said third-quarter gross margins
improved by 440 basis points and inventories declined 24
The company now expects fiscal-year earnings of 69 to 76
cents per share, up from January's forecast of 63 to 73 cents.
It still expects sales to rise 2.5 percent to 3.5 percent.
Analysts are calling for fiscal year earnings of 71 cents per
Arden expects fiscal-year cash flow from operations of $90
million to $100 million, up from its prior target of $70
million to $75 million.
(Reporting by Jessica Wohl; Editing by Derek Caney, Maureen
Bavdek and Leslie Gevirtz)