Net sales for the quarter came in at $236.28m, compared to $242.67m in the corresponding quarter last year, a fall of 2.6 percent, or 3.8 percent given the negative impact currency exchange rates.
Net income for the period was also down, from $9.9m in same period last year, to $6.3m this year. The adjusted net income figure, which also took into account Liz Claiborne charges, meant a loss of $10.43m, compared to a profit of $9.63m for the same period last year.
Liz Claiborne licensing hits bottom line
Total costs related to the Liz Claiborne acquisition are expected to exceed $19m, the majority of which should be absorbed in the first quarter.
However, despite the relatively weak performance, the results were still largely in line with expectations, as most financial analysts had factored the important Liz Claiborne licensing agreement into their forecasts.
Analysts polled by Thomson Financial had forecast that sales would come in at around the $237m mark.
Shares surge on 2009 forecasts
However, shares in the company surged on news that the revenue expectations for the full year 2009 are likely to top expectations, pinned on modest growth in its domestic and European businesses.
Although the guidance does not take into consideration expenses relating to restructuring and the Liz Claiborne transaction, increased sales from the new licensing agreement are expected to boost revenues significantly.
"As we look to fiscal 2009, we expect the Liz Claiborne transaction to provide us with significant incremental sales and earnings growth, particularly in our North America fragrance business," said E. Scott Beattie, chief executive of Elizabeth Arden.
Logistics restructuring
Tying in with the extension of the business, the company is also planning to restructure its extended supply chain, logistics and transaction processing system – a move that is expected to bring savings in excess of $10m a year.
The Liz Claiborne portfolio includes high profile fragrance brands such as Juicy Couture, Usher, Curve by Liz Claiborne, Bora Bora and Mambo.
While Elizabeth Arden is expecting the deal to provide increased revenue, Liz Claiborne is expecting that it will boost its sales and eventually improve its bottom line.