U.S. cosmetics company Elizabeth Arden Inc, said it is evaluating strategic alternatives after reporting much weaker-than-expected quarterly results due to falling demand for its perfumes, sending its shares down sharply after the bell.
The company said it has engaged Goldman Sachs to explore strategic alternatives but did not give details.
Reuters reported in April that the beauty products company had hired Goldman Sachs to explore a sale and had reached out to a small group of potential buyers.
The company's sales have been hit by a pullback in consumer spending on beauty products in the North American retail market as well as deep discounting in key European markets that have eroded profit margins in recent quarters.
South Korea's LG Household & Healthcare Ltd said last month it was considering a bid for Elizabeth Arden, an acquisition that would give it globally recognized luxury brands.
Elizabeth Arden's North American sales declined 23 percent to $121.9 million in the third quarter as it launched fewer fragrances in fiscal 2014 and some retail customers lowered replenishment orders.
Total revenue fell to $210.8 million.
The company's net loss widened to $26.4 million, or 89 cents per share, in the quarter ended March 31, from $1.3 million, or 4 cents per share, a year earlier.
Excluding items, the company's loss was 84 cents per share.
Analysts on average had expected the company to break even on a per-share basis on revenue of $256.86 million, according to Thomson Reuters I/B/E/S.
Elizabeth Arden is known for celebrity brand perfumes such as those of Taylor Swift and Justin Bieber, as well as skin care brands like Ceramide and Prevage.
The company sells its products to U.S. chains such as Wal-Mart Stores Inc., Target Corp. and Kohl's Corp., as well as department stores including Nordstrom Inc. and Macy's Inc.
At about 5:30 p.m. in New York, Elizabeth Arden's shares were down 15 percent at $30.15, after closing at $35.63 on Monday. The company's shares have fallen 21.9 percent in the 12 months to Monday's close.
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