NEW YORK (TheStreet) -- Shares of Elizabeth Arden, Inc. (RDEN) are up 5.56% to $18.24 in midday trading as the company announced that investment funds affiliated with Rhone Capital L.L.C. commenced a partial tender offer to acquire up to 6,442,013 shares of its outstanding common stock, or 20% of such outstanding common stock.
Rhone Capital L.L.C. offered a cash purchase price of $17 per share.
Shares of Elizabeth Arden closed at $15.05 on August 19, its lowest in nearly three years, as the company reported a decline in sales for the three months ended June 30 of -28% to $191.7 million due to slumping celebrity fragrance orders.
Elizabeth Arden's brand portfolio includes skincare, color and fragrance products as well as celebrity fragrance brands such as Britney Spears, Justin Bieber, and Taylor Swift.
Separately, TheStreet Ratings team rates ELIZABETH ARDEN INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ELIZABETH ARDEN INC (RDEN) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Personal Products industry. The net income has significantly decreased by 3013.1% when compared to the same quarter one year ago, falling from -$5.01 million to -$155.94 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Personal Products industry and the overall market, ELIZABETH ARDEN INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$2.98 million or 104.20% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 50.45%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2982.35% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- ELIZABETH ARDEN INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ELIZABETH ARDEN INC swung to a loss, reporting -$4.91 versus $1.33 in the prior year. This year, the market expects an improvement in earnings (-$0.43 versus -$4.91).
- You can view the full analysis from the report here: RDEN Ratings Report
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