UPDATE: BMO Capital Markets Reiterates Outperform Rating, Lowers PT on Elizabeth Arden
In a report published Friday, BMO Capital Markets reiterated its Outperform rating on Elizabeth Arden (NASDAQ: RDEN), but lowered its price target from $57.00 to $48.00.
BMO Capital Markets noted, “RDEN reported 2Q EPS of $1.58 and missed our estimate of $1.65. The causes: (1) mass market sales came in short. While sales to Target, Kohl's, Sears, and Meijer's and others that account for half of RDEN's mass revenues rose 10%plus and twice the expected rate, sales to a retailer whose customers tend to have less disposable income were light; (2) RDEN's due diligence was not as strong as it should have been. It was too optimistic about the contribution from the BCBG, True Religion, and Ed Hardy fragrances acquired last May after Christmas-season programs (largely without its input) had already been set; and (3) the sell-through of older Elizabeth Arden (EA) products in travel retail took longer than expected and the sell-in of the re-staged EA products that are exclusive to this very profitable channel are only now occurring. The shortfall and the likelihood that mass market sales won't improve quickly led to lowered FY2013 guidance of $2.30-$2.50 from $2.55-$2.70.”
Elizabeth Arden closed on Thursday at $38.41.
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