Elizabeth Arden Shares Plunged, Then Recovered: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of beauty company Elizabeth Arden (NAS: RDEN) were looking anything but beautiful in early trading today, as they fell as much as 16% before recovering and closing with a 3.8% gain.

So what: What a wild ride for Elizabeth Arden shareholders today! Like many other publicly traded companies, the volatility came as the company joined the chorus of earnings reports as it offered up its fiscal second-quarter results.

For the quarter, the company notched $430 million in sales, which was 6% better than the prior year. On the bottom line, earnings per share rose 19% year over year to $1.42. Not bad. Even better, both numbers topped the expectations of the analysts on Wall Street, who were looking for $1.39 in per-share profit on $429 million in sales.

Now what: So far, so good, right? Today's early trading drop seems like quite a head-scratcher in light of the results from the December quarter. It's a bit of a different story when we dig a little deeper to the company's full-year outlook.

For the fiscal year -- which ends in June -- management stuck with its forecast of 5% to 6% in top-line growth and earnings per share between $1.90 and $2.00. For the upcoming quarter, per-share profit is seen clocking in between $0.00 and $0.04. This is most likely what shook up investors early in the day -- for the full year, analysts had been expecting $1.99 in EPS, while the fiscal third quarter was slated for $0.06.

So the next few quarters may not quite live up to what investors had originally hoped for. But as the trading action suggests, that angst wore off quickly, and by the end of the day, optimism made a comeback.

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