Elizabeth Arden, Inc.

Elizabeth Arden, Inc. (RDEN - Snapshot Report) is counting on its celebrity fragrance brands to counter the economic downturn. The company also has one of the most recommended anti-aging skincare products on the market. RDEN has surprised on estimates 2 of the last 4 quarters. Elizabeth Arden has a forward P/E of 8.95.

Company Description

Elizabeth Arden sells beauty products in over 90 countries. The company's products include Elizabeth Arden skincare, color, and fragrances. RDEN's anti-aging skincare treatment is hot, winning awards in numerous women's magazines for "best" skincare product.

The company also produces the celebrity fragrance brands of Elizabeth Taylor, Mariah Carey, Britney Spears, Hilary Duff, and Usher and designer brands of Juicy Couture, Bob Mackie, Liz Claiborne, Halston, and Giorgio of Beverly Hills.

Elizabeth Arden Surprises on the Fourth Quarter by 4.76%

On Aug 14, Elizabeth Arden announced fourth quarter results and beat Wall Street estimates by a penny. Net income was $6.3 million, or 22 cents per share, down from $9.9 million, or 34 cents per share in the year ago quarter. Analysts expected 21 cents.

Sales for the fourth quarter fell 2.6% to $236.3 million from $242.7 million in 2007. For the fiscal 2008, sales rose 1.2% to $1.141 million compared to a sales decrease of 0.4% in fiscal 2007.

International business grew 9.2% but North America struggled as sales at department stores fell with the difficult consumer environment. The North American fragrance business declined 1.5%.

In May 2008, the company entered into a long-term global licensing agreement for Liz Claiborne fragrances. Elizabeth Arden incurred $19.6 million in expenses in the fourth quarter related to the transaction.

Outlook for 2009

RDEN expects the Liz Claiborne brand to provide a boost to sales and earnings growth, especially in North America. The company expects net sales to increase by 12.5% to 14% for fiscal 2009. The guidance assumes modest growth in the U.S. and European businesses before sales contributions from the Liz Claiborne brands.

Earnings per share are expected in the range of $1.65 to $1.85.

For the first quarter, the company guided to a sales increase in the range of 5% to 7% and earnings per share between 4 and 8 cents.

Consensus Estimates Rising

Given the company's guidance, covering analysts have been raising estimates for the first-quarter 2009 and the fiscal year 2009. First quarter estimates are up 2 cents to 6 cents, which is in the middle of the company's targeted range.

Full year estimates rose 13 cents to $1.77 per share.

Value Fundamentals

Elizabeth Arden is a Zacks #1 Rank (Strong Buy) stock. The company has a forward P/E of 8.95. Its price-to-book is 1.40. RDEN has a solid five year average return on equity (ROE) of 13.53%.