Elizabeth Arden - Aggressive Growth

Elizabeth Arden (RDEN) analysts keep raising estimates and are now expecting earnings to nearly double over the next 2 years.

Company Description

Elizabeth Arden makes beauty products and fragrances on a global scale. The company's products are sold under the PREVAGE as well as a variety of celebrity and third party names.

Latest Surprise

On Aug 12 Elizabeth Arden reported fourth quarter and full year results. Sales for the year came in at $1.1 billion, up just over 3% since last year.

Earnings for the last quarter came in at 13 cents per share, easily ahead of the consensus, which was calling for just 1 penny. This marked Elizabeth Arden's ninth consecutive earnings surprise.

Estimates Up

After the news was released, analysts raised full-year estimates for both fiscal 2011 and 2012. This year's forecasts are averaging $1.20, up 7 cents. Next year's projections jumped 22 cents, to $1.56.

In the recently completed fiscal year Elizabeth Arden earned 87 cents, so the annual growth rates are expected to be 37% this year and another 30% next year.

Valuations

Shares of RDEN are trading with a slight premium, at 16 times forward estimates, but that is inline with the industry average. However, the price-to-sales ratio just under 0.5 is less than half of the norm for its peers.

The Chart

The stock is on a great run here, setting a new 52-week high this week. Look for shares to continue climbing as we make our way into earnings season next week.

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service
 
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