Cosmetics stocks sank in Friday morning trading after Elizabeth Arden (RDEN) said holiday sales had been disappointing and withdrew its earnings guidance for the fiscal year.
RDEN stock plunged more than 16% on the news, while Avon (AVP) dropped more than 3% and Revlon (REV) slipped 1%. Estee Lauder (EL) bucked the trend by rising slightly.
Holiday sales were weaker than expected, according to RDEN officials. It’s CEO said the company made a “strategic decision” not to engage in large discounts during the holidays. RDEN said that profits and earnings for fiscal 2014 will be below prior estimate. However, it has decided to withdraw its previous guidance and will not issue a new forecast, the Wall Street Journal notes.
RDEN anticipates an adjusted second-quarter profits significantly below prior estimates.
Last month, REV announced that is shutting down its operations in China. The move will eliminate 1,100 jobs in China and cost REV $22 million in charges. REV stock has climbed more than 50% over the past year, but is down from an October high of just over $29 a share.
In July, AVP sole its Silpada Designs sterling silver jewelry unit back to its original founders for $85 million. AVP paid $650 million to acquire Silpada in 2010.