"Despite a weak consumer and retail environment, we were still disappointed with our results this quarter," said E. Scott Beattie, chairman, president and CEO, Elizabeth Arden, Inc. "While we were not expecting any improvement in the retail environment this past quarter in North America, we did not anticipate the extent of the negative retail sales trends. The pace of our international business, particularly in the U.K., slowed this past quarter, after delivering 20% growth in the first half of this fiscal year, and was not able to offset these negative trends. That said, we are pleased to end the quarter with a strengthened balance sheet. Inventory was on plan and well controlled, and we generated better than expected cash flow for the period. Cash flow from operations, after adjusting for the Sovereign Sales acquisition in fiscal 2007, has increased by $52 million through our third fiscal quarter, and we used this cash to reduce our credit line and repurchase shares under our share repurchase program."
Net loss for the three months ended March 31, 2008, excluding restructuring charges, was $2.9 million, or $0.10 per share. This compares to net income, excluding restructuring charges, in the same period last year of $3.3 million, or $0.11 per diluted share. On a reported basis, the net loss was $3.8 million, or $0.14 per diluted share, compared to net income of $3.2 million, or $0.11 per diluted share, for the prior year period. In addition, the company's reported results were negatively impacted by currency hedges established in 2007 when the U.S. dollar was stronger.
"For the balance of the year, we remain cautious with respect to our business in North America and the developed markets in Europe," said Beattie. "We do expect this softness to be offset somewhat by a solid pipeline of new brands to North American retailers and continued excellent performance in the Asia Pacific region and in our travel retail and developing markets, which now represent more than 50% of our international business."
The company also announced that it has substantially completed the comprehensive review of its global business processes that it announced and commenced in fiscal 2007 to re-engineer its extended supply chain, logistics and transaction processing systems.
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