Elizabeth Arden, Inc. announced financial results for its fourth fiscal quarter and year ended June 30, 2011. For the quarter ended June 30, 2011, the company reported net sales of $253.8 million, an increase of 11.2%, as compared to the fourth quarter of the prior fiscal year. Excluding the favorable impact of foreign currency translation, net sales increased by 7.7%. For the year ended June 30, 2011, the company reported net sales of $1.176 billion, an increase of 6.5%, or 5.9% excluding the favorable impact of foreign currency, as compared to the prior fiscal year.
E. Scott Beattie, chairman, president and CEO of Elizabeth Arden, Inc., commented, "Our focus over the past several years has been on delivering consistent improvement in our key operating metrics. I am pleased to report that we have delivered a record year of sales and profitability. For fiscal 2011, gross margins increased by 240 basis points, and we expect an additional 200–225 basis points of improvement for fiscal 2012."
Beattie continued, "Our results include solid organic growth of our brand portfolio across all of our businesses. Net sales within our North American business increased by 5% for the fiscal year and were driven by market share gains in our U.S. mass business. Our international sales growth of 9% for the fiscal year benefited from strength in our European and travel retail and distributor businesses. Global sales of Elizabeth Arden branded products increased by 8%, reflecting our focus on organically growing the Elizabeth Arden brand and the realignment of our marketing organization to better support global brand management."
Beattie concluded, "As we begin fiscal 2012, our priorities remain unchanged. We continue to focus on driving the organic growth of our brand portfolio, including expanding the market share of our fragrance business in Western Europe and in high growth emerging markets. We made significant progress in increasing the distribution of our core brands with key retailers in Europe, growing sales of our fragrances to retail customers in Europe by 20% in fiscal 2011, and we expect this momentum to continue. We are also beginning a repositioning of the Elizabeth Arden brand, which is intended to drive organic growth of that brand on a global basis, particularly in international markets. We expect these growth drivers to result in improved operating leverage and accelerated growth in earnings and return on invested capital over the next several years."
The company also recently amended its long-term license agreement with Liz Claiborne, Inc. to acquire the trademarks for the Curve fragrance brands and selected other smaller fragrance brands. The amendment also includes a lower effective royalty rate for the remaining licensed fragrance brands, including Juicy Couture and Lucky Brand fragrances, reduces the future minimum guaranteed royalties for the term of the license, and requires a pre-payment of royalties for the remainder of calendar 2011. The company paid Liz Claiborne, Inc. $58.4 million in cash in connection with this transaction and expects the transaction to be modestly accretive to earnings for fiscal 2012 and more accretive beginning in fiscal 2013.
On this, Beattie commented, "We believe this transaction allows us to increase our investment behind these brands and accelerate their growth, particularly internationally."
