S&P Places Elizabeth Arden Ratings On Watch

NEW YORK (AP) — Standard & Poor's Ratings Services said Friday that it placed its ratings for Elizabeth Arden Inc. — including the cosmetics maker's non-investment grade "BB-" corporate credit rating — on CreditWatch for possible downgrade.

S&P's action follows Elizabeth Arden's announcement on Thursday that it expects weaker-than-expected revenue in fiscal 2009. The Miramar, Fla.-based company predicted fiscal 2009 earnings between 38 cents and 50 cents per share and said sales are expected to decline between 6 percent and 6.5 percent.

"The CreditWatch placement follows Elizabeth Arden's downward earnings revision for the June 2009 quarter, primarily due to continued weakness in its international business, which includes its higher-margined travel retail and international distributor businesses," said Standard & Poor's credit analyst Susan Ding.

Elizabeth Arden's international business accounts for 33 percent of the company's total revenue, S&P noted.

Ding predicted that the weaker operating performance will lead to higher leverage, and pressure the company's credit metrics.

Elizabeth Arden had about $352 million in debt as of March 31, S&P said.

Elizabeth Arden shares jumped 36 cents, or 4.5 percent, to $8.41 on Friday. The stock has traded between $3.93 and $21.79 during the past 52 weeks.