Why Elizabeth Arden's Shares Are Sitting Pretty
May 2nd 2013 6:24PM
Updated May 2nd 2013 7:30PM
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 Elizabeth Arden are up over 8% today after topping out above 10% in afternoon trading. The market seems to be pleased with a decent earnings report and the same forward guidance as was issued previously, because at least it's better than being surprised with lousy reports and weak guidance.
So what: Arden's revenue came in at $264.5 million, a 10.5% year-over-year improvement, and slightly ahead of the $261.2 million Wall Street consensus. Earnings of $0.02 per share were in line with the Street's expectations. Arden's holding its full-year revenue guidance of $1.35 billion to $1.37 billion, which tops out at the consensus estimate of $1.37 billion. The company's earnings guidance ranges from $2.30 to $2.50 per share, which is well-placed at points between the consensus estimate of $2.41 in EPS. The big surprise was 33% sales growth in Europe, because when do we ever hear anything about a company doing well in Europe these days?
Now what: If Arden can turn around its weakening profit, there may be some upside left to the stock. Strong double-digit growth in Europe is practically unheard of, but is this a one-time surge or the start of a sustainable trend? If eurozone sales weaken in the coming quarter, it's likely to undo all of these good feelings, so it's worth checking up on Arden's long-term European opportunities before deciding that this is a good entry point.
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The article Why Elizabeth Arden's Shares Are Sitting Pretty originally appeared on Fool.com.Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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