The shares of Elizabeth Arden, Inc. (NASDAQ:RDEN) are plummeting as investors were disappointed with its second quarter fiscal 2016 results ended December 31, 2015.
The stock price of Elizabeth Arden dropped more than 25% to $6.00 per share around 3:01 in the afternoon in New York.The beauty products company is one of the biggest decliners listed on NASDAQ on Friday. In fact the stock fell as low as $5.02 per earlier today.
Elizabeth Arden financial results
Elizabeth Arden reported a net loss of $0.19 per share for the second quarter. Excluding non-recurring and other items, its adjusted net income was $0.10 per share.
The beauty company said its GAAP net sales were $316.2 million, down by 5.2% from the same period a year earlier.
The financial results of Elizabeth Arden missed $0.60 in earnings per share and $342 million in sales consensus estimate of Wall Street analysts.
For the full fiscal 2016, the beauty company expected to achieve an increase in net sales (at constant foreign currency rates) driven by its international business and the Elizabeth Arden brand.
The management expected foreign currency headwinds to have a negative impact of around 4.75% on its full year sales growth compared to its estimated 3% impact in November.
Elizabeth Arden predicted its gross margin to increase primarily due to better sales mix, improved commercial execution and improved cost structure. The beauty company also expected overall selling, general and administrative expenses and indirect overhead costs to be lower.
Furthermore, the beauty company expected its reinvestment in advertising would accelerate its revenue growth, and to achieve improved EBITDA margins from gross margin expansion and lower indirect overhead expenses.
In a statement, Elizabeth Arden CEO Scott Beattie commented, “The improved commercial execution and distribution platform implemented over the past eighteen months are beginning to deliver improved results.”
He added, “We continue to expect sales growth, at constant foreign currency rates, and margin expansion for fiscal 2016 and beyond driven by a stronger innovation pipeline and reinvestment of savings from our performance improvement initiatives.”
Invesco acquires 18.9% stake in Elizabeth Arden
Meanwhile, Invesco, a large investment advisory firm with more than $207 billion assets under management (AUM) sees opportuning in Elizabeth Garden.
The investment advisory firm acquired 5, 651,699 shares of 18.9% stake in the beauty company as of December 31, based on its 13G filing with the Securities and Exchange Commission (SEC).