Elizabeth Arden Inc. shares stink today, and scents associated with Justin Bieber and Taylor Swift are partly to blame.
Shares of the manufacturer of fragrances and cosmetics dropped 24 percent to $14.95 at 1:54 p.m. in New York, the lowest since August 2010, after the company posted the worst quarterly loss since at least 1996 and said it will sell $50 million in stock.
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Elizabeth Arden cited a bigger-than-expected drop in celebrity fragrance sales, particularly Bieber's and Swift's. The company said in a statement that retailers ordered fewer products in the quarter, dragging shipments to below the rate of retail sales. Sales in fiscal 2014 were also hurt as the manufacturer tightened distribution of its products globally to improve pricing and gross margins, the company said.
"It looks like sales numbers will continue to decline, which of course will make a lot of investors worried," Jason Gere, an analyst with KeyBanc Capital Markets in New York, said by phone. "People thought there would be challenges into 2015, and this is what the company confirmed in a report today."
Allison Malkin, a spokeswoman for Elizabeth Arden, didn't immediately respond to phone calls seeking a comment.
Sales for the three-month period dropped to $191.7 million, a 28 percent decline from a year ago. Headwinds will continue into the first half of 2015 due to lower level of product innovation compared with the same period a year ago, the company said.
The company reported a fiscal fourth-quarter adjusted net loss of $1.04 per share. The average of eight analysts surveyed by Bloomberg called for a 34-cent loss.
About 37 percent of its $1.16 billion in revenue in the past 12 months came from Elizabeth Arden namesake products, data compiled by Bloomberg show, while the rest was from fragrances affiliated with celebrities such as Justin Bieber, Taylor Swift and Nicki Minaj and designer perfumes such as BCBGMaxazria and Juicy Couture. Shares in the company have dropped 58 percent this year.
The Miramar, Florida-based company said Rhone Capital LLC has agreed to buy $50 million in preferred stock and warrants to acquire 2.5 million shares of common stock.