Arden puts faith in anti-aging in Katrina's wake

By Lorraine Heller

- Last updated on GMT

Related tags Elizabeth arden Hurricane katrina

Elizabeth Arden is standing by its earnings expectations for the
financial year, despite early signs that cosmetics manufacturers
are in for a rough ride as economic conditions continue to look
doubtful.

Good performance of products like the anti-aging skin treatment Prevage should boost the company's sales and offset any disruptions caused by incidents such as Hurricane Katrina, the company announced yesterday.

Chairman Scott Beattie said the company continued to anticipate its forecast annual sales increase of 8.5 to 10.5 percent, to between $1bn to $1.015bn.

Elizabeth Arden seems to be holding its own in a competitive market squeezed by external pressures, at a time when both Avon and Estee Lauder have reduced their earnings expectations for the financial year, reflecting economic uncertainties.

Estee Lauder, meanwhile, has said that it expects currency translation to negatively impact sales results by approximately 1 per cent, while expenses relating to closures and over-stocking are expected to hit the bottom line by up to 10 per cent.

Equally, Avon said it was lowering its 2005 earning projections due to an unexpected shortfall in all of its four sales regions. It went on to say that the US market would be particularly affected in the wake of Hurricane Katrina and higher oil prices.

As a result, the company has lowered its earnings projection by as much as 16 per cent, although it said that revenue would increase in mid-single digit figures.

But at a time when products making anti-aging claims are more popular than ever before thanks to the aging baby-boomer population, Elizabeth Arden looks to benefit from its recent re-launch of a newly formulated Prevage anti-ageing formula.

Euromonitor International estimated that the total market for skincare products is valued at $38.3 billion globally, a figure that is second only to the hair care sector.

In terms of growth, the figures for skin care have been well ahead of any other in the cosmetics industry. In the period 2002 to 2003, it was by far the fastest growing sector, with global growth running at 6.7 per cent.

However, breaking this down for products specific to the anti-aging market, the figures are even more dramatic. For products that target specific age-related conditions, the global market was estimated at $6.9 billion in 2003, indicating a growth rate of 11.4 per cent.

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