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Estee Lauder, Elizabeth Arden's 2Q show challenges

Estee Lauder, Elizabeth Arden's fiscal 2nd-quarter results underscore challenges

Associated Press

NEW YORK (AP) -- Two of the nation's top cosmetic companies reported their fiscal second-quarter results Wednesday that reflect a challenging environment.

Estee Lauder Cos. said that profits for its fiscal second quarter fell 3 percent, as results were hurt by the impact of foreign currency translation. Elizabeth Arden reported double-digit declines in revenue and net income on weaker-than-anticipated holiday sales and replenishment orders at a number of North American retailers.

The New York-based Estee Lauder, whose brands include Clinique, Bobbi Brown and its namesake, said that it earned $432.5 million, or $1.09 per share, in the three-month period ended Dec. 31. That compares with $447.5 million, or $1.13 per share, in the year-earlier period.

Revenue rose 3 percent to $3.02 billion for the quarter.

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Analysts had expected a profit of $1.06 on revenue of $3.03 billion, according to FactSet.

The company maintained its full-year profit guidance of $2.80 to $2.87. Analysts are expecting $2.88 per share.

Estee Lauder's shares were down more nearly 5 percent, or $3.30, to $65.89 in afternoon trading as the broader markets were headed for another day of losses.

Citi Research analyst Wendy Nicholson said the stock sell-off was "understandable, but feels overdone." The analyst maintained a "Buy" rating on the stock and lifted her price target to $81 from $78.

Elizabeth Arden Inc., also based in New York, earned $35 million, or $1.16 per share, down 22 percent from $44.8 million, or $1.47 per share, in the final three months of 2012. Adjusted earnings per share totaled $1.08.

Revenue fell 11 percent to $418.1 million from $467.9 million, with North American sales down 13 percent and international sales down 5 percent — or down 4 percent at constant currency rates.

Analysts had expected $1.08 per share on revenue of $416.6 million, on average.

Elizabeth Arden makes its namesake skincare line as well as well as the fragrance lines of Britney Spears, Elizabeth Taylor and Justin Bieber, among others.

Elizabeth Arden's shares fell more than 6 percent to $24.10. The stock is down about 38 percent in the past year.