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What: Shares of beauty-products maker Elizabeth Arden were cracking up today, falling as much as 22% after its earnings report left investors wanting.
So what: The cosmetics company grew earnings per share 11% to $1.58, but that was short of estimates at $1.63. Revenue also missed as sales of $468 million were well below the analyst consensus at $492 million. Arden blamed slow sales at department stores for the miss, and also dialed back its 2013 forecast. The company now sees sales growth of 9% to 11% instead of the 13.5% to 15% it had earlier predicted. Revised EPS guidance of $2.30 to $2.50 was down from a previous range of $2.55 to $2.70, and below estimates of $2.66.
Now what: The holiday quarter is key in the cosmetics industry, which helps explain why Arden is taking such a big hit on the news. Arden is in the middle of a transition toward a higher-end brand image, converting its flagship counters, where it saw a 24% increase in year-over-year sales. Given the positive momentum in some areas and the opportunities being uncovered through new partnerships and rebranding, today's drop seems overdone.
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The article Why Elizabeth Arden Shares Tumbled originally appeared on Fool.com.
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