Elizabeth Arden stumbles as fragrance stars dim

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Elizabeth Arden on Tuesday reported the biggest quarterly loss in the beauty product giant's history, citing in part a decline in sales of celebrity fragrances, particularly Bieber's and Swift's. The news drove down the company's stock 24% in mid-morning trading to about $15.

The company lost $155.9 million, or $5.24 per share, in the three months ended June 30. Sales plunged 28.4% to $191.7 million.

For all of fiscal 2014, Elizabeth Arden lost $145.7 million, or $4.90 a share, compared to a profit of $40.7 million in fiscal 2013. Sales fell 18.4% to $1.2 billion.

The company recently launched a restructuring program to streamline its offerings. Excluding restructuring and other one-time costs, Elizabeth Arden lost 55 cents a share for the year.

Investors were especially spooked by the company's guidance that the next six months will continue to be hampered by 'a lower level of product innovation,' among other factors.

Retailers are carrying fewer Elizabeth Arden products and the company itself is reducing distribution of its branded products and other fragrances 'to improve pricing and gross margins.'

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'Our primary focus as an organization is to improve performance and restore profitability and return on invested capital to levels consistent with historic results,' said company CEO E. Scott Beattie.

The company also announced that Rhone Capital has agreed to buy $50 million in redeemable preferred stock and warrants to purchase 2.5 million shares of common stock, representing 7.6% of the company's outstanding shares.