NEW YORK (TheStreet) -- Shares of Elizabeth Arden Inc. (RDEN) are down -10.50% to $17.55 in pre-market trade after the beauty products company said its fiscal fourth quarter loss widened sharply as a larger-than-expected drop in celebrity-fragrances sales pushed down revenue, the Wall Street Journal reports.
The company's loss for the quarter and its drop in sales were much greater than Wall Street expectations.
Separately, the company said that investment funds affiliated with Rhone Capital LLC agreed to purchase $50 million of the company's preferred stock and will receive warrants to purchase 2.5 million common shares at $20.39 each, which would represent about 7.6% of the company's shares outstanding.
Rhone Capital also intends to increase its ownership over time, Elizabeth Arden said. Rhone has agreed not to acquire more than 30% of its common stock after exercising the warrants.
The company's sales for the three months ended June 30 dropped 28% to $191.7 million, as sales of celebrity fragrance brands slumped.
The company reported a loss of $155.9 million, or $5.24 per share, compared with a year earlier loss of $5 million, or 17 cents a share.
Excluding nonrecurring costs, Elizabeth Arden reported a loss of $1.04 per share, compared with a year-earlier profit of 10 cents a share.
Analysts had forecast a loss of 34 cents a share on revenue of $242 million.
TheStreet Ratings team rates ELIZABETH ARDEN INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation: