Bieber fever boosts Elizabeth Arden sales but takes toll on profits

Prestige beauty firm Elizabeth Arden reported better-than-expected revenue in its first quarter results, thanks to the launch of several new fragrances; although these purchases affected profits.

The results, delayed due to Hurricane Sandy, showed that for the quarter ended September 30, 2012, the company reported net sales of $344.5 million, an increase of 13.5 percent, as compared to the first quarter of the prior fiscal year.

However despite new fragrances from Justin Bieber, Taylor Swift, and a host of other celebrities helping to boost sales, the cost of acquiring these licenses has seen profit drop 76 percent according to Dow Jones.

US sales top of the charts

Net sales for the company's international segment increased by 2.2 percent, or 8.8 percent at constant rates; with Europe and emerging markets performing best.

Net sales in its North America segment grew by 20.0 percent thanks to the new fragrance launches.

Sales of Elizabeth Arden branded products decreased by 5.1 percent, as compared to the prior year and reflect the company's continued wind down of retailer inventory in advance of the broader roll-out of the Elizabeth Arden brand repositioning.

Maintained sales forecast

"We have begun the year strongly, reporting double digit growth in net sales and adjusted earnings per share,” said E. Scott Beattie, chairman and CEO.

“Although early in the roll-out, we are experiencing strong retail sales performance at the flagship doors with our revitalized Elizabeth Arden products. As we look forward to the holiday season, we believe that our significant innovation along with the continued rollout of Elizabeth Arden branded products has us well positioned to continue our positive performance."

However despite Beattie’s upbeat outlook, the company still maintained its revenue forecast of $825 million to $840 million for the first half of the fiscal year, which saw share prices fall 2.3 percent in early trading.