UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-Q
(Mark One)

   [ ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

            For the quarterly period ended _______________

   [X]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the transition period from February 1, 2004 to June 30, 2004

                        Commission file number 1-6370

                            ELIZABETH ARDEN, INC.
            -----------------------------------------------------
            (Exact name of registrant as specified in its charter)

                    Florida                     59-0914138
            ------------------------------     ------------------
           (State or other jurisdiction of      (I.R.S. Employer
            incorporation or organization)     Identification No.)

          14100 N.W. 60th Avenue, Miami Lakes, Florida      33014
          --------------------------------------------    ----------
            (Address of principal executive offices)      (Zip Code)

                                (305) 818-8000
             ----------------------------------------------------
             (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.    Yes [X]   No [ ]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).       Yes [X]   No [ ]

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable
date:
<TABLE>
<CAPTION>
                                               Outstanding at
                        Class                  August 5, 2004
             ----------------------------     -----------------
             <S>                              <C>
             Common Stock, $.01 par value     28,170,791 shares
</TABLE>

<TABLE>
<CAPTION>
                              ELIZABETH ARDEN, INC.

                               INDEX TO FORM 10-Q

<S>      <C>                                                       <C>
PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements                                      Page No.

         Unaudited Consolidated Balance Sheets -- June 30, 2004 and
         January 31, 2004. . . . . . . . . . . . . . . . . . . . .     3

         Unaudited Consolidated Statements of Operations --
         Five months ended June 30, 2004 and June 28, 2003 . . . .     4

         Unaudited Consolidated Statement of Shareholders' Equity --
         Five months ended June 30, 2004 . . . . . . . . . . . . .     5

         Unaudited Consolidated Statements of Cash Flow --
         Five months ended June 30, 2004 and June 28, 2003 . . . .     6

         Notes to Unaudited Consolidated Financial Statements. . .     7

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations . . . . . . . . . . . . . . . .    25

Item 3.  Quantitative and Qualitative Disclosures About Market Risk   32

Item 4.  Controls and Procedures . . . . . . . . . . . . . . . . .    33


PART II  OTHER INFORMATION

Item 1.  Legal Proceedings   . . . . . . . . . . . . . . . . . . .    35

Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases
         of Equity Securities. . . . . . . . . . . . . . . . . . .    35

Item 4.  Submission of Matters to a Vote of Securities Holders . .    36

Item 5.  Other Information . . . . . . . . . . . . . . . . . . . .    37

Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . .    38

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . .    40

Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . .    41
</TABLE>

                              - 2 -



PART I     FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                        ELIZABETH ARDEN, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                                    (Unaudited)
                              (Dollars in thousands)
<CAPTION>
                                                           As of
                                                 ---------------------------
                                                   June 30,      January 31,
                                                     2004           2004
                                                 -----------     -----------
<S>                                              <C>             <C>
ASSETS
Current Assets
 Cash and cash equivalents                       $    23,494     $    89,087
 Accounts receivable, net                            102,306         137,380
 Inventories                                         258,638         193,382
 Deferred income taxes                                16,723          16,508
 Prepaid expenses and other assets                    15,914          15,133
                                                 -----------     -----------
      Total current assets                           417,075         451,490
                                                 -----------     -----------
Property and equipment, net                           37,198          38,207
                                                 -----------     -----------
Other Assets
 Exclusive brand licenses, trademarks and
  intangibles, net                                   191,842         194,811
 Debt financing costs, net                             9,027          10,724
 Deferred income taxes and other                       8,544           2,847
                                                 -----------     -----------
      Total other assets                             209,413         208,382
                                                 -----------     -----------
      Total assets                               $   663,686     $   698,079
                                                 ===========     ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
 Short-term debt                                 $    65,900     $        --
 Accounts payable - trade                            106,375          84,533
 Other payables and accrued expenses                  48,164          54,827
 Current portion of long-term debt                     4,764          91,287
                                                 -----------     -----------
      Total current liabilities                      225,203         230,647
                                                 -----------     -----------

Long-term debt                                       233,802         233,802
Deferred income taxes and other                        2,621          11,878
                                                 -----------     -----------
     Total long-term liabilities                     236,423         245,680
                                                 -----------     -----------
     Total liabilities                               461,626         476,327
                                                 -----------     -----------
Commitments and contingencies (See Note 8)



Convertible, redeemable preferred stock,
 Series D, $.01 par value (liquidation
 preference of $0 and $27,235, respectively);
 1,000,000 shares authorized; 0 and 226,955
 shares issued and outstanding, respectively              -           10,793
                                                 -----------     -----------
Shareholders' Equity
 Common stock, $.01 par value, 50,000,000
  shares authorized; 28,169,941 and 24,983,094
  shares issued and outstanding, respectively            282             250

 Additional paid-in capital                          228,891         185,874
 (Accumulated deficit) retained earnings             (22,057)         29,638

 Treasury stock (0 and 123,579 shares at cost,
  respectively)                                            -          (1,288)
 Accumulated other comprehensive income                2,806           2,214
 Unearned deferred compensation                       (7,862)         (5,729)
                                                 -----------     -----------
     Total shareholders' equity                      202,060         210,959
                                                 -----------     -----------
     Total liabilities and shareholders' equity  $   663,686     $   698,079
                                                 ===========     ===========

  The accompanying notes are an integral part of the unaudited consolidated
  financial statements.
</TABLE>

                              - 3 -

<TABLE>
<CAPTION>
              ELIZABETH ARDEN, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)
          (Dollars in thousands, except per share data)
<CAPTION>
                                                       Five Months Ended
                                                   ------------------------
                                                    June 30,      June 28,
                                                      2004          2003
                                                   -----------   ----------
<S>                                                <C>           <C>

Net sales                                          $   222,784   $  205,201
Cost of sales (excludes depreciation
 of $1,026 and $1,344, respectively, included
 below)                                                134,500      130,348
                                                   -----------   ----------
Gross profit                                            88,284       74,853

Operating expenses:
 Selling, general and administrative                   111,897       95,493
 Depreciation and amortization                           8,701        8,443
                                                   -----------   ----------
     Total operating expenses                          120,598      103,936
                                                   -----------   ----------
Loss from operations                                   (32,314)     (29,083)
                                                   -----------   ----------
Other income (expense):
 Interest expense, net                                  (9,835)     (16,986)
 Debt extinguishment (charges) gain                     (3,874)         123
 Other                                                      (8)          29
                                                   -----------   ----------
     Other expense, net                                (13,717)     (16,834)

Loss before income taxes                               (46,031)     (45,917)
Benefit from income taxes                              (14,188)     (13,176)
                                                   -----------   ----------
Net loss                                               (31,843)     (32,741)
Accretion and dividend on preferred stock                  762        1,626
Accelerated accretion on converted preferred stock      19,090           --
                                                   -----------   ----------
Net loss attributable to common shareholders       $   (51,695)  $  (34,367)
                                                   ===========   ==========
Net loss per common share (See Note 2):
   Basic                                           $     (2.08)  $    (1.92)
                                                   ===========   ==========
   Diluted                                         $     (2.08)  $    (1.92)
                                                   ===========   ==========
Weighted average number of common shares:
   Basic                                                24,885       17,907
                                                   ===========   ==========
   Diluted                                              24,885       17,907
                                                   ===========   ==========

  The accompanying notes are an integral part of the unaudited consolidated
  financial statements.
</TABLE>
                              - 4 -



<TABLE>
<CAPTION>
                  ELIZABETH ARDEN, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                (Unaudited)
                          (Amounts in thousands)
<CAPTION>
                                                  (Accumulated              Accumulated
                       Common Stock    Additional   Deficit)                    Other
                      --------------    Paid-In     Retained     Treasury   Comprehensive
                      Shares  Amount    Capital     Earnings     Stock         Income
                      -------------------------------------------------------------------
<S>                   <C>      <C>      <C>         <C>          <C>          <C>
Balance at
 January 31, 2004     24,983   $250     $185,874    $ 29,638     $(1,288)     $ 2,214

Issuance of common
 stock upon exercise
 of stock options        397      4        4,081           -           -           --

Offering of common
 stock, net of costs     232      2        2,638           -       1,523           --

Accretion and
 dividend on Series
 D preferred stock         -      -            -        (762)          -           --

Issuance of common
 stock for employee
 stock purchase plan      39      1          647          --          --           --

Conversion of Series
 D preferred stock
 and accelerated
 accretion             2,318     23       30,621     (19,090)         --           --

Issuance of restricted
 stock, net of
 forfeitures             201      2        4,775          --        (235)          --

Repurchase of
 restricted stock         --     --         (435)         --          --           --

Amortization of
 unearned deferred
 compensation, net
 of forfeitures           --     --           --          --          --           --

Tax benefit from
 exercise  of stock
 options                  --     --          690          --          --           --

Comprehensive loss:
  Net loss                --     --           --     (31,843)         --           --
  Foreign currency
   translations           --     --           --          --          --          481



  Unrealized cash flow
  hedging gain, net of
  taxes                   --     --           --          --          --          111
                      -------------------------------------------------------------------
Total comprehensive
 loss                     --     --           --     (31,843)         --          592

                      -------------------------------------------------------------------
Balance at
 June 30, 2004        28,170   $282     $228,891    $(22,057)    $    --    $   2,806
                      ===================================================================
</TABLE>


RESTUBBED TABLE
CONTINUED FROM ABOVE
<TABLE>
<CAPTION>
                                             Total
                               Unearned      Share-
                               Deferred      holders'
                             Compensation    Equity
                             -------------------------
<S>                            <C>           <C>
Balance at January 31, 2004    $  (5,729)    $ 210,959

Issuance of common
 stock upon exercise
 of stock options                     --         4,085

Offering of common
 stock, net of costs                  --         4,163

Accretion and
 dividend on Series
 D preferred stock                    --          (762)

Issuance of common
 stock for employee
 stock purchase plan                  --           648

Conversion of Series
 D preferred stock
 and accelerated
 accretion                            --        11,554

Issuance of restricted
 stock, net of
 forfeitures                      (4,542)           --

Repurchase of
 restricted stock                     --          (435)

Amortization of
 unearned deferred
 compensation, net
 of forfeitures                    2,409         2,409

Tax benefit from
 exercise  of stock
 options                              --           690

Comprehensive loss:
  Net loss                            --       (31,843)
  Foreign currency
   translations                       --           481
  Unrealized cash flow
  hedging gain, net of
  taxes                               --           111
                             -------------------------
Total comprehensive
 loss                                 --       (31,251)
                             -------------------------
Balance at
 June 30, 2004                 $  (7,862)    $ 202,060
                             =========================


The accompanying notes are an integral part of the unaudited consolidated
financial statements.
</TABLE>

                                   - 5 -

<TABLE>
<CAPTION>
              ELIZABETH ARDEN, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOW
                           (Unaudited)
                      (Dollars in thousands)
<CAPTION>
                                                         Five Months Ended
                                                     ------------------------
                                                      June 30,      June 28,
                                                        2004          2003
                                                     ----------    ----------
<S>                                                  <C>           <C>
OPERATING ACTIVITIES:
  Net loss                                           $  (31,843)   $ (32,741)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation and amortization                         8,701        8,443
    Amortization of senior note offering costs and
     note premium                                         1,015        1,285
    Amortization of unearned deferred compensation        2,409          931
    Debt extinguishment charges (gain)                    3,874         (123)
    Deferred tax benefit                                (15,126)          --
    Tax benefit from exercise of stock options              690           --
  Changes in assets and liabilities:
    Decrease in accounts receivable                      35,074       26,446
    Increase in inventories                             (65,256)     (66,037)
    Increase in prepaid expenses and other assets        (1,734)     (11,945)
    Increase in accounts payable                         21,842       12,387
    Decrease in other payables and accrued expenses      (6,613)     (11,064)
    Other                                                   376          635
                                                     ----------   ----------
       Net cash used in operating activities            (46,591)     (71,783)
                                                     ----------   ----------
INVESTING ACTIVITIES:
  Additions to property and equipment                    (4,158)      (4,070)
  Proceeds from disposals of property and equipment          20           --
                                                     ----------   ----------
       Net cash used in investing activities             (4,138)      (4,070)
                                                     ----------   ----------
FINANCING ACTIVITIES:
 Proceeds from short-term debt                           65,900       84,691
 Payments on long-term debt                             (89,441)     (13,044)
 Proceeds from the exercise of stock options              4,085           32
 Proceeds from the issuance of common stock               4,163           --
 Net proceeds from the issuance of common stock
  under employee stock purchase plan                        648           --
 Repurchase of common stock                                (435)        (264)
                                                     ----------   ----------
      Net cash (used in) provided by
       investing activities                             (15,080)      71,415
                                                     ----------   ----------
Effect of exchange rate changes on cash and
 cash equivalents                                           216          300



Net decrease in cash and cash equivalents               (65,593)      (4,138)
Cash and cash equivalents at beginning of period         89,087       22,663
                                                     ----------   ----------
Cash and cash equivalents at end of period           $   23,494   $   18,525
                                                     ==========   ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Interest paid during the period                     $    4,004   $   18,611
                                                     ==========   ==========
 Income taxes paid during the period                 $      787   $      577
                                                     ==========   ==========

  The accompanying notes are an integral part of the unaudited consolidated
  financial statements.
</TABLE>

                                    - 6 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.    BUSINESS AND BASIS OF PRESENTATION

      Elizabeth Arden, Inc. (the "Company") is a manufacturer and marketer of
prestige designer fragrances, skin treatment and cosmetic products to
retailers in the United States and approximately 90 countries internationally.

      On June 2, 2004, the Company's board of directors (the "Board")
approved a change in fiscal year end from January 31 to June 30, effective as
of June 30, 2004.  The change was implemented to better reflect the Company's
business cycle and to enhance business planning relative to its customers'
retail calendars. Accordingly, the financial statements are presented for the
five-month transition period ended June 30, 2004 and the comparable five-
month period ended June 28, 2003.

      The unaudited consolidated financial statements include the accounts of
the Company's wholly-owned subsidiaries and all significant intercompany
accounts and transactions have been eliminated in consolidation.

      The accompanying unaudited consolidated financial statements included
herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission (the "Commission") for
interim financial information.  Accordingly, they do not include all of the
information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statement
presentation and should be read in conjunction with the audited consolidated
financial statements and related footnotes included in the Company's Annual
Report on Form 10-K for the year ended January 31, 2004, filed with the
Commission.

      The consolidated balance sheet of the Company as of January 31, 2004 is
derived from the audited financial statements included in the Company's
Annual Report on Form 10-K for the year ended January 31, 2004. The other
consolidated financial statements are unaudited, but include all adjustments,
which are of a normal recurring nature, that management considers necessary
to fairly present the results for the interim periods.  Results for interim
periods are not necessarily indicative of results for the full fiscal year.
Certain reclassifications were made to the prior years' consolidated
financial statements and the accompanying footnotes.

NOTE 2.    LOSS PER SHARE

      Basic income (loss) per share is computed by dividing the net income
(loss) attributable to common shareholders by the weighted average shares of
outstanding common stock, $.01 par value per share ("Common Stock").  The
calculation of diluted income per share is similar to basic income per share
except that the denominator includes potentially dilutive Common Stock such
as stock options, warrants and convertible securities.  In addition, for the
diluted income per share calculation, the imputed preferred dividend and
accretion is added back to net income.  Diluted loss per share equals basic
loss per share for the five months ended June 30, 2004 and June 28, 2003 as
the assumed conversion of convertible securities and the assumed exercise of
outstanding options and warrants would have an anti-dilutive effect.



      The following table represents the computation of loss per share
(amounts in thousands except per share data):
<TABLE>
<CAPTION>
                                                        Five Months Ended
                                                     ----------------------
                                                      June 30,    June 28,
                                                        2004        2003
                                                     ---------    ---------
<S>                                                  <C>          <C>
Basic and Diluted
  Net loss attributable to common shareholders       $ (51,695)   $ (34,367)
                                                     =========    =========
  Weighted average shares outstanding                   24,885       17,907
                                                     =========    =========
     Net loss per basic and diluted share            $   (2.08)   $   (1.92)
                                                     =========    =========
</TABLE>

                              - 7 -


                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     The following table shows the options to purchase shares of Common Stock
that were outstanding during the five months ended June 30, 2004 and June 28,
2003 where the option exercise price was greater than the average market
price of the Common Stock over the applicable period:
<TABLE>
<CAPTION>
                                               Five Months Ended
                                       ---------------------------------
                                           June 30,          June 28,
                                             2004              2003
                                       ---------------   ---------------
<S>                                    <C>               <C>
             Number of shares              363,500          2,280,077
                                       ===============   ===============
             Range of exercise price        $21.60       $12.50 - $20.64
                                       ===============   ===============
</TABLE>
NOTE 3.    STOCK-BASED COMPENSATION

      In December 2002, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard ("SFAS") No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure - an
Amendment of FASB Statement No. 123."  This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair market value based method of
accounting for stock-based employee compensation.  In addition, this
statement amends the disclosure requirements of SFAS No. 123 to require
prominent disclosures in both annual and interim financial statements about
the method of accounting for stock-based employee compensation and the effect
of the method used on reported results.

      The Company accounts for its stock incentive plans under the
recognition and measurement principles prescribed by Accounting Principles
Board Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees," and
related interpretations, under which no compensation costs are required to be
recognized for the periods presented.  No employee stock-option compensation
cost is reflected in net loss, as all options granted under those plans had
an exercise price equal to the market value of the underlying common stock on
the date of grant. The following table illustrates the effect on net loss
attributable to common shareholders and net loss per common share if the
Company had applied the fair value recognition provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," to stock option compensation:



<TABLE>
<CAPTION>
(Dollars in thousands, except per share data)      Five Months Ended
                                               -------------------------
                                                 June 30,     June 28,
                                                   2004         2003
                                               -----------   -----------
     <S>                                       <C>           <C>
     Net loss attributable to common
      shareholders, as reported                $   (51,695)  $   (34,367)
     Add: Restricted stock-based employee
      compensation cost, net of tax,
      currently included in net loss                 1,667           664
     Less: Stock-based employee compensation
      expense, net of tax, determined under
      fair value-based method                        3,094         2,643
                                               -----------   -----------
     Pro forma net loss attributable to
      common shareholders                      $   (53,122)  $   (36,346)
                                               ===========   ===========
     Net loss per common share
       Basic
         As reported                           $     (2.08)  $     (1.92)
         Pro forma                             $     (2.13)  $     (2.03)

     Diluted
         As reported                           $     (2.08)  $     (1.92)
         Pro Forma                             $     (2.13)  $     (2.03)
</TABLE>


                              - 8 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4.    RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

      In January 2003, FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities" ("FIN 46"), was issued.  FIN 46 provides guidance on
consolidating variable interest entities and applies immediately to variable
interests created after January 31, 2003.  In December 2003, the FASB revised
and superseded FIN 46 with the issuance of FIN 46R in order to address
certain implementation issues that will be adopted the first reporting period
ending after March 15, 2004. The interpretation requires variable interest
entities to be consolidated if the equity investment at risk is not
sufficient to permit an entity to finance its activities without support from
other parties or the equity investors lack certain specified characteristics.
The effect of the adoption of FIN 46 and FIN 46R was immaterial to the
Company's consolidated financial statements.

NOTE 5.    INVENTORIES

      The components of inventory were as follows:

<TABLE>
<CAPTION>
            (Dollars in thousands)          June 30,      January 31,
                                              2004           2004
                                           ----------     -----------
            <S>                            <C>            <C>
            Raw materials                  $   49,373     $    35,268
            Work in progress                   35,938          19,916
            Finished goods                    173,327         138,198
                                           ----------     -----------
                                           $  258,638     $   193,382
                                           ==========     ===========
</TABLE>
NOTE 6.    SHORT-TERM DEBT

      The Company has a revolving credit facility with a syndicate of banks,
for which JP Morgan Chase Bank is the administrative agent, that provides for
borrowings on a revolving basis of up to $200 million with a $25 million
sublimit for letters of credit (the "Credit Facility"). The Credit Facility
matures in January 2006 and is guaranteed by all of the Company's U.S.
subsidiaries. Borrowings under the Credit Facility are limited to 85% of
eligible accounts receivable and 75% (65% from November 16 through May 15) of
eligible finished goods inventory and are collateralized by a first priority
lien on all of the Company's U.S. accounts receivable and inventory. The
Company's obligations under the Credit Facility rank pari passu, or equal in
right of payment, with the Company's remaining 11 3/4% Senior Secured Notes
due 2011(the "11 3/4% Senior Notes") and rank senior to the Company's 7 3/4%
Senior Subordinated Notes due 2014 (the "7 3/4% Senior Subordinated Notes").

      The Credit Facility has only one financial maintenance covenant, which
is a fixed charge coverage ratio that must be maintained at not less than 1.1
to 1 if average borrowing availability declines to less than $50 million. No
financial maintenance covenant was applicable for the period ended June 30,
2004. The Credit Facility restricts the Company from incurring additional
non-trade indebtedness (other than refinancing and certain small amounts of
indebtedness) and prohibits the payment of dividends on the Company's Common
Stock, repurchases of Common Stock and other distributions to common
shareholders, except that at June 30, 2004, the Company was permitted to
repurchase up to $1.7 million of Common Stock.

      Borrowings under the revolving credit portion of the Credit Facility
bear interest at a floating rate based on the "Applicable Margin," which is
determined by reference to a specific financial ratio. At the Company's
option, the Applicable Margin may be applied to either the London InterBank
Offered Rate ("LIBOR") or the prime rate. The Company entered into an
amendment to the Credit Facility effective February 25, 2004 to reduce the
interest rates charged on LIBOR loans and base rate loans. The amendment
changed the reference ratio for determining the Applicable Margin from a
consolidated debt to EBITDA (earnings before interest, taxes, depreciation
and amortization) ratio to a fixed charge coverage ratio. As a result of the
amendment, the Applicable Margin was decreased to a range of 2.00% to 2.75%
from a range of 2.25% to 3.00% for LIBOR loans and to a range of 0.25% to
1.00% from a range of 0.5% to 1.25% for prime rate borrowings. As of June 30,
2004, the Applicable Margin was 2.25% for LIBOR loans and 0.50% for prime
rate loans. The commitment fee on the unused portion of the Credit Facility
ranges from 0.25% to 0.5% per


                              - 9 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

year.  The Company entered into an amendment to the Credit Facility effective
June 2, 2004 to adjust certain covenants for the Company's change in fiscal
year end.

      As of June 30, 2004, the Company had $65.9 million in outstanding
borrowings under the Credit Facility, $0.1 million in outstanding letters of
credit and $0.1 million in accrued interest, as compared with no borrowings
outstanding and letters of credit of $0.1 million outstanding as of January
31, 2004. As of June 30, 2004, the remaining availability under the Credit
Facility, based upon eligible receivables and inventories, was approximately
$56.2 million.

NOTE 7.    LONG-TERM DEBT

      The Company's long-term debt consisted of the following:
<TABLE>
<CAPTION>
(Dollars in thousands)                           June 30,      January 31,
           Description                             2003           2004
--------------------------------------------    ----------     -----------
<S>                                             <C>            <C>
11 3/4% Senior Secured Notes due May 2011       $    8,802     $     8,802
7 3/4% Senior Subordinated Notes due
 January 2014                                      225,000         225,000
8.84% Miami Lakes Facility Mortgage Note
 due July 2004                                       4,764           4,835
10 3/8% Senior Notes due May 2007                       --          84,285
8.5% Subordinated Debenture due May 2004                --           2,167
                                                ----------     -----------
Total                                              238,566         325,089
Less: Current portion of long-term debt              4,764          91,287
                                                ----------     -----------
Long-term debt, net                             $  233,802     $   233,802
                                                ==========     ===========
</TABLE>
      SENIOR SUBORDINATED NOTES.   On January 13, 2004, the Company completed
the sale of $225.0 million aggregate principal amount of 7 3/4% Senior
Subordinated Notes.  The 7 3/4% Senior Subordinated Notes are guaranteed by
the Company's U.S. subsidiaries DF Enterprises, Inc., FD Management, Inc.,
Elizabeth Arden International Holding, Inc., Elizabeth Arden (Financing),
Inc., RDEN Management, Inc., and Elizabeth Arden Travel Retail, Inc. The net
proceeds of approximately $219.4 million were used to redeem $95.2 million
principal amount of its outstanding 11 3/4% Senior Notes and $104.3 million
principal amount of its 10 3/8% Senior Notes, of which $20.0 million
principal amount were redeemed in January 2004 and $84.3 million principal
amount were redeemed in February 2004. As a result of the redemption of the
$84.3 million aggregate principal amount of 10 3/8% Senior Notes, the Company
incurred during the five months ended June 30, 2004, a charge of
approximately $3.9 million, comprised of the call premium of approximately
$2.9 million and approximately $1.0 million for the non-cash write-off of
unamortized debt issue costs.  Pending the closing of the redemption of the
$84.3 million 10 3/8% Senior Notes, the Company used the proceeds received
from the sale of its 7 3/4% Senior Subordinated Notes to temporarily pay down
borrowings under the Credit Facility and to invest in short-term securities.


      On June 25, 2004, the Company closed the exchange offer of all of its
outstanding $225.0 million aggregate principal amount 7 3/4% Senior
Subordinated Notes sold in a private placement in January 2004 for an equal
aggregate principal amount of 7 3/4% Senior Subordinated Notes with
substantially identical terms that are registered under the Securities Act of
1933, as amended.

      In May 2004, the Company redeemed the $2.2 million in remaining
principal amount of 8.5% Subordinated Debenture due 2004 plus accrued
interest with borrowings from the Credit Facility.  There was no gain or loss
on this transaction.

      On July 1, 2004, the Company paid the remaining balance of $4.8 million
plus accrued interest on the 8.84% Miami Lakes Facility Mortgage Note due
July 2004.


                              - 10 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.    COMMITMENTS AND CONTINGENCIES

      CONSOLIDATION OF DISTRIBUTION FACILITIES.  In November 2003, the
Company announced that it would consolidate its U.S. distribution operations
into a single distribution facility in Roanoke, Virginia by March 2004. The
Roanoke facility was expanded in 2003 to approximately 400,000 square feet in
order to accommodate the consolidated distribution activities.  The Company
ceased conducting distribution activities from the Miami Lakes facility at
the end of January 2004 and is planning to sell the facility. The Company
will continue to use the corporate offices located in the Miami Lakes
facility until the facility is sold and then it will move its corporate
offices to another location in the area.  In connection with the
consolidation, the U.S. workforce was reduced by approximately 10%.  The
consolidation was substantially completed in March 2004. The Company incurred
and expensed approximately $1.3 million of restructuring costs during the
five months ended June 30, 2004, including severance pay, outplacement
services, and employee benefit costs for severed employees.

      The Company has commitments to incur promotional and advertising
expenses, which are either fixed commitments or based on net sales for
licensed brands, and minimum royalty guarantees in an aggregate amount of
$33.5 million through 2009.

      In February 2004, the Company entered into an interest rate swap
agreement to swap $50.0 million of the outstanding 7 3/4% Senior Subordinated
Notes to a floating interest rate based on LIBOR.  The swap agreement matures
in February 2014.  The Company can terminate the swap agreements at its
option at any time and the counter party can call the swap agreement any time
after January 2009.  The Company has designated the swap agreement as a fair
value hedge.

      During the five months ended June 30, 2004, the Company entered into
foreign currency option contracts for 16.9 million Euros and 9.9 million
British pounds to reduce the exposure of its foreign subsidiary revenues to
fluctuations in currency rates.  The Company has designated each foreign
currency option contract as a cash flow hedge.  The unrealized gain, net of
taxes, at June 30, 2004 associated with these contracts of $111,000 is
included in accumulated other comprehensive income.

      On June 30, 2004, the Company settled a breach of contract action filed
in December 2000 by Adenat, Inc., a Canadian customer of Unilever.  Adenat
filed suit in the Ontario, Canada Superior Court of Justice against a number
of Unilever affiliates, the Company and several individuals, including
officers of Unilever and the Company who were subsequently removed from the
case. Adenat alleged that Unilever breached contractual obligations owed to
Adenat and that the Company interfered in that relationship. Adenat sought to
enjoin the termination of the alleged distribution agreement by Unilever and
sought compensatory damages of Canadian $55 million (approximately US $41
million at June 30, 2004) against each of Unilever and the Company, plus
punitive damages of Canadian $35 million (approximately US $26 million at
June 30, 2004). The Company did not pay or receive any amounts to settle the
case.



     The Company is a party to a number of other legal actions, proceedings
or claims.  While any action, proceeding or claim contains an element of
uncertainty management of the Company believes that the outcome of such
actions, proceedings or claims will not have a material adverse effect on the
Company's business, financial position or results of operations.

NOTE 9.    CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY

      CONVERTIBLE PREFERRED STOCK.   At June 30, 2004 and January 31, 2004,
the Company had outstanding zero and 226,955 shares, respectively, $120 per
share liquidation preference, of Series D Convertible Preferred Stock, $.01
par value (the "Series D Convertible Preferred Stock"), that was issued to an
affiliate of Unilever in connection with the January 2001 acquisition of the
Elizabeth Arden business.  Each share of Series D Convertible Preferred Stock
was fully convertible into 10 shares of Common Stock at an initial conversion
price of $12 per share of Common Stock, subject to certain restrictions,
since January 23, 2004.  In addition, cumulative dividends of 5% of the
outstanding liquidation preference of the Series D Convertible Preferred
Stock began to accrue on January 23, 2003 and were payable quarterly in
additional shares of Series D Convertible Preferred Stock. During the five
months ended June 30 , 2004, the Company issued to


                              - 11 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

an affiliate of Unilever 4,839 shares of Series D Convertible Preferred Stock
as payment of quarterly dividends.

      Upon issuance, the Series D Convertible Preferred Stock was recorded at
its fair market value of $35 million, with an allocation of $26.5 million
made for the beneficial conversion feature and reclassified to additional
paid-in capital. The accretion of the beneficial conversion feature was based
on the effective yield method over the period from issue date to the
mandatory redemption date (12 years). The recorded dividend was based on the
straight-line method, which approximates the effective yield method, with the
total amount of the dividend of $25 million to be paid over 10 years
amortized over the period from issue date to the mandatory redemption date
(12 years) or $2.1 million annually. The difference between the liquidation
value of $50 million and the $8.5 million balance recorded in Series D
Convertible Preferred Stock on the Company's consolidated balance sheet was
being accreted over the life of the Series D Convertible Preferred Stock.

      The following table sets forth the accretion and dividend on the Series
D Convertible Preferred Stock for the five months ended June 30, 2004 and
June 28, 2003:
<TABLE>
<CAPTION>
                                                  Five Months Ended
                                            ------------------------------
                                            June 30, 2004    June 28, 2003
                                            -------------    -------------
   (Dollars in thousands)
   <S>                                      <C>              <C>
   Aggregate accretion (excluding the
    accelerated accretion on the converted
    preferred stock)                        $         400    $         758
   Dividends                                          362              868
                                            -------------    -------------
      Total                                 $         762    $       1,626
                                            =============    =============
</TABLE>
      During the five months ended June 30, 2004, an affiliate of Unilever
converted the remaining 231,793 shares of Series D Convertible Preferred
Stock, (representing approximately $28.8 million of aggregate liquidation
preference) into 2,317,930 shares of Common Stock, which were sold in a
public offering on June 15, 2004.  The accretion of the Series D Convertible
Preferred Stock converted was accelerated, resulting in a non-cash charge in
the amount of $19.1 million to net loss attributable to common shareholders
on the Company's unaudited consolidated statement of operations for the five
months ended June 30, 2004.  This non-cash charge represents the last charge
associated with the Series D Convertible Preferred Stock.

PUBLIC OFFERING OF COMMON STOCK

      On June 15, 2004, the Company completed a public offering of 2,549,723
shares of its Common Stock, which were sold at $19.50 per share.  Conopco,
Inc. and Unilever United States Foundation, Inc., affiliates of Unilever,
N.V. (the "Selling Shareholders"), sold 2,317,930 shares and the Company sold
231,793 shares pursuant to an over-allotment option granted by the Company
and exercised by the underwriter in the offering. The shares sold by the
Selling Shareholders represented the remaining shares of Common Stock
underlying the Company's outstanding Series D Convertible Preferred Stock.
The Company did not receive any proceeds from the sale of shares by the
Selling Shareholders. The Company used the net proceeds it received from the
exercise of the over-allotment option to reduce borrowings under the Credit
Facility.

STOCK INCENTIVE PLANS AND AWARDS

      At June 30, 2004, the Company had five stock incentive plans, two for
the benefit of non-employee directors (the 1995 Non-Employee Director Plan
and the 2004 Non-Employee Director Plan (the "2004 Director Plan")) and three
for the benefit of eligible employees and independent contractors (the 1995
Stock Option Plan, the 2000 Stock Incentive Plan and the 2004 Stock Incentive
Plan (the "2004 Incentive Plan")). All five plans were adopted by the Board
and approved by the Company's shareholders.  The 2004 Incentive Plan was
approved by the shareholders of the Company on June 22, 2004 as there remain
no shares of Common Stock available for grant under the 1995 Stock Option
Plan and the 2000 Stock Incentive Plan.  The 2004 Director Plan was also
approved by the shareholders of the Company on June 22, 2004 and replaced the
1995 Non-Employee Director Plan.  No further grants of stock options will
occur under the 1995 Non-Employee Director Plan.


                              - 12 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The 2004 Director Plan authorizes the Company to grant stock options
for 350,000 shares of Common Stock under such plan to non-employee directors
of the Company.  Each year on the date of the annual meeting of the
shareholders and provided that a sufficient number of shares remain available
under the 2004 Director Plan, there will automatically be granted to each
eligible director who is re-elected to the Board an option to purchase 7,000
shares of common stock or such other amount as the Board determines based on
a competitive review of comparable companies.  Unless service is terminated
due to death, disability or retirement in good standing after age 70, each
option granted under the 2004 Director Plan on an annual shareholder meeting
date will become exercisable three years from the date of grant if such
person has continued to serve as a director until that date.  No option may
be exercisable after the expiration of ten years from the date of grant.  The
exercise price will represent the closing price of the Common Stock on the
date of grant.  The options to be granted under the 2004 Director Plan will
be non-qualified stock options.  The 2004 Director Plan shall continue in
effect until all options granted thereunder have expired or have been
exercised unless sooner terminated under the provisions relating to the
options.  No further grants under the 1995 Non-Employee Director Plan will be
made due to the adoption of the 2004 Non-Employee Director Plan on June 22,
2004.  At June 30, 2004, 315,000 shares of Common Stock remained available
for grant under the 2004 Non-Employee Director Plan.

      The 2004 Incentive Plan authorizes the Company to grant stock based
incentives for 2,000,000 shares of Common Stock under such plan to eligible
employees and others that provide services to the Company. The stock options
awarded under the 2004 Incentive Plan are exercisable at any time or in any
installments as determined by the compensation committee of the Board at the
time of grant and may be either incentive or non-qualified stock options
under the Internal Revenue Code, as determined by the compensation committee.
The exercise price for stock option grants will represent the closing price
of the Common Stock on the date of grant.  The 2004 Incentive Plan also
permits stock appreciation rights, stock awards, performance awards and stock
units.  At June 30, 2004, no stock-based incentives have been granted and,
therefore, all shares remain available for grant under the 2004 Incentive
Plan.

      On June 22, 2004, the Company granted stock options for an aggregate of
35,000 shares of Common Stock to non-employee directors under the 2004
Non-Employee Director Plan which are exercisable three years from the date of
grant of such persons continue to serve as a director on that date.

      On March 10, 2004, the Company authorized the grant of stock options to
117 managerial employees for approximately 364,000 shares of Common Stock.
The stock options are due to vest over three years in thirds each succeeding
year from the date of grant, assuming the person receiving the grant is
employed by the Company at the time of vesting.  The exercise price of those
stock options is $21.60 per share, which was the closing price of the Common
Stock on the date of grant.  The options expire ten years from the date of
grant.

      Also, on March 10, 2004, the Company authorized the grant of
performance-based restricted stock to 107 managerial employees for
approximately 192,000 shares of Common Stock. The performance-based
restricted stock will vest as to one third of the stock granted on each of
the Company's fiscal years ending June 30, 2005, 2006 and 2007, but only if
the person receiving the grant is employed by the Company at the time of
vesting and the Company achieves a cumulative annualized increase in earnings
per share of 10%, excluding any one-time or extraordinary events (as
determined by the compensation committee), and after giving effect to any
stock splits or other recapitalizations. The restricted stock was recorded as
unearned deferred compensation in shareholders' equity for the five months
ended June 30, 2004 in the amount of approximately $4.0 million and is being
amortized over the three-year vesting period.

      On February 13, 2004, the Company authorized the grant of an aggregate
of 40,578 shares of restricted stock to 189 employees that vest in full one
year from the date of grant.  These shares were recorded as unearned deferred
compensation in shareholders' equity in the amount of approximately $734,000,
which is being amortized over the one-year vesting period.

      During the five months ended June 30, 2004, the Company repurchased
20,226 shares of Common Stock at the $21.50 closing price as a result of the
vesting of restricted stock of employees that elected to sell shares


                              - 13 -


                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

to the Company to cover personal income tax withholding obligations.  The
repurchase of these shares is permitted for those purposes under the
Company's 2000 Stock Incentive Plan.

NOTE 10.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION

      The following condensed financial statements as of June 30, 2004 and
for the five months then ended, and as of January 31, 2004, show the
consolidated financial statements of the Company, and, in separate financial
statements, (i) the financial statements of those subsidiaries that are
guarantors of the 7 3/4% Senior Subordinated Notes issued in January 2004,
plus, in each case, the financial statements of non-guarantor entities,
elimination adjustments and the consolidated total, and (ii) the financial
statements of those subsidiaries that are guarantors of the 11 3/4% Senior
Notes which were issued in January 2001 to finance a portion of the purchase
price for the acquisition of the Elizabeth Arden business plus, in each case,
the financial statements of non-guarantor entities, elimination adjustments
and the consolidated total.  The following condensed financial statements for
the five months ended June 28, 2003, show the consolidated financial
statements of the Company and the financial statements of those subsidiaries
that are guarantors of the 11 3/4% Senior Notes. The Company's subsidiaries,
DF Enterprises, Inc., FD Management, Inc., Elizabeth Arden International
Holding, Inc. and Elizabeth Arden (Zug) GmbH, are guarantors of the 11 3/4%
Senior Notes. DF Enterprises, Inc., FD Management, Inc., Elizabeth Arden
International Holding, Inc., Elizabeth Arden (Financing), Inc., RDEN
Management, Inc. and Elizabeth Arden Travel Retail, Inc. are guarantors of
the 7 3/4% Senior Subordinated Notes.  Equity income of the guarantor
subsidiaries is included in other (expense) income, net.  All information
presented is in thousands.


                 [Remainder of Page Intentionally Left Blank]


                              - 14 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Balance Sheet                                      As of June 30, 2004
                         -------------------------------------------------------------------
                                                   7 3/4% Senior
                                                   Subordinated
                                                   Notes
                            Company    Guarantors  Guarantors     Eliminations    Total
                            ---------  ----------  -------------  ------------  ---------
<S>                         <C>        <C>         <C>            <C>           <C>
ASSETS
Current Assets
 Cash and cash
  equivalents               $   7,251  $   16,202  $          41  $         --  $  23,494
 Accounts receivable, net      54,270      48,036             --            --    102,306
 Inventories                  187,359      71,279             --            --    258,638
 Intercompany receivable       56,500      74,526        398,749      (529,775)        --
 Deferred income taxes         16,723          --             --            --     16,723
 Prepaid expenses and other
  assets                        5,018      10,859             37            --     15,914
                            ---------  ----------  -------------  ------------  ---------
     Total current assets     327,121     220,902        398,827      (529,775)   417,075
                            ---------  ----------  -------------  ------------  ---------
Property and equipment,
 net                           27,125      10,073             --            --     37,198
                            ---------  ----------  -------------  ------------  ---------
Other Assets:
 Investment in subsidiaries    19,908          --             --       (19,908)        --
 Exclusive brand licenses,
  trademarks and intangibles,
  net                          24,390       5,553        161,899            --    191,842
 Debt financing costs, net      9,027          --             --            --      9,027
 Deferred income taxes and
  other                       271,827    (268,417)         5,134            --      8,544
                            ---------  ----------   -------------  ------------  ---------
    Total other assets        325,152    (262,864)       167,033       (19,908)   209,413
                            ---------  ----------  -------------  ------------  ---------
    Total assets            $ 679,398  $  (31,889) $     565,860  $   (549,683) $ 663,686
                            =========  ==========  =============  ============  =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
 Short-term debt            $  65,900  $       --  $          --  $         --  $  65,900
 Accounts payable - trade      93,173      13,202             --            --    106,375
 Intercompany payable          51,365     181,060        297,354      (529,779)        --
 Other payables and accrued
  expenses                     26,594      21,147            419             4     48,164
 Current portion of long-term
  debt                          4,764          --             --            --      4,764
                            ---------  ----------  -------------  ------------  ---------
    Total current
     liabilities              241,796     215,409        297,773      (529,775)   225,203
                            ---------  ----------  -------------  ------------  ---------

Long-term debt, net           233,802          --             --            --    233,802
 Other                          1,740         881             --            --      2,621
                            ---------  ----------  -------------  ------------  ---------
    Total liabilities         477,338     216,290        297,773      (529,775)   461,626
                            ---------  ----------  -------------  ------------  ---------
Shareholders' Equity
 Common stock                     282          --             --            --        282
 Additional paid-in capital   228,891    (265,164)       265,164            --    228,891
 (Accumulated deficit)
  retained earnings           (22,057)     14,058          2,923       (16,981)   (22,057)
 Accumulated other
  comprehensive income          2,806       2,927             --        (2,927)     2,806
 Unearned deferred
  compensation                 (7,862)         --             --            --     (7,862)
                            ---------  ----------  -------------  ------------  ---------
    Total shareholders'
     equity                   202,060    (248,179)       268,087       (19,908)   202,060
                            ---------  ----------  -------------  ------------  ---------
    Total liabilities
     and shareholders'
     equity                 $ 679,398  $  (31,889) $     565,860  $   (549,683) $ 663,686
                            =========  ==========  =============  ============  =========

</TABLE>

                              - 15 -


                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Balance Sheet                                     As of June 30, 2004
                          ---------------------------------------------------------------
                                                   11 3/4% Senior
                                                   Subordinated
                                                   Notes
                            Company    Guarantors  Guarantors     Eliminations    Total
                            ---------  ----------  -------------  ------------  ---------
<S>                         <C>        <C>         <C>            <C>           <C>
ASSETS
Current Assets
 Cash and cash
  equivalents               $   7,251  $   16,213  $          30  $         --  $  23,494
 Accounts receivable, net      54,270      48,036             --            --    102,306
 Inventories                  187,359      71,279             --            --    258,638
 Intercompany receivable       56,500     365,781        107,494      (529,775)        --
 Deferred income taxes         16,723          --             --            --     16,723
 Prepaid expenses and other
  assets                        5,018      10,776            120            --     15,914
                            ---------  ----------  -------------  ------------  ---------
     Total current assets     327,121     512,085        107,644      (529,775)   417,075
                            ---------  ----------  -------------  ------------  ---------
Property and equipment,
 net                           27,125      10,073             --            --     37,198
                            ---------  ----------  -------------  ------------  ---------
Other Assets:
 Investment in subsidiaries    19,908          --             --       (19,908)        --
 Exclusive brand licenses,
  trademarks and intangibles,
  net                          24,390          98        167,354            --    191,842
 Debt financing costs, net      9,027          --             --            --      9,027
 Deferred income taxes and
  other                       271,827    (268,419)         5,136            --      8,544
                            ---------  ----------  -------------  ------------  ---------
    Total other assets        325,152    (268,321)       172,490       (19,908)   209,413
                            ---------  ----------  -------------  ------------  ---------
    Total assets            $ 679,398  $  253,837  $     280,134  $   (549,683) $ 663,686
                            =========  ==========  =============  ============  =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
 Short-term debt            $  65,900  $       --  $          --  $         --  $  65,900
 Accounts payable - trade      93,173      13,202             --            --    106,375
 Intercompany payable          51,365     173,821        304,593      (529,779)        --
 Other payables and accrued
  expenses                     26,594      21,147            419             4     48,164
 Current portion of long-term
  debt                          4,764          --             --            --      4,764
                            ---------  ----------  -------------  ------------  ---------
    Total current
     liabilities              241,796     208,170        305,012      (529,775)   225,203
                            ---------  ----------  -------------  ------------  ---------

Long-term debt, net           233,802          --             --            --    233,802
 Other                          1,740         881             --            --      2,621
                            ---------  ----------  -------------  ------------  ---------
    Total liabilities         477,338     209,051        305,012      (529,775)   461,626
                            ---------  ----------  -------------  ------------  ---------
Shareholders' Equity
 Common stock                     282          --             --            --        282
 Additional paid-in capital   228,891         (44)            44            --    228,891
 (Accumulated deficit)
  retained earnings           (22,057)     41,912        (24,931)      (16,981)   (22,057)
 Accumulated other
  comprehensive income          2,806       2,918              9        (2,927)     2,806
 Unearned deferred
  compensation                 (7,862)         --             --            --     (7,862)
                            ---------  ----------  -------------  ------------  ---------
    Total shareholders'
     equity                   202,060      44,786        (24,878)      (19,908)   202,060
                            ---------  ----------  -------------  ------------  ---------
    Total liabilities
     and shareholders'
     equity                 $ 679,398  $  253,837  $     280,134  $   (549,683) $ 663,686
                            =========  ==========  =============  ============  =========

</TABLE>

                              - 16 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

Balance Sheet                                      As of Jan 31, 2004
                         -------------------------------------------------------------------
                                                    7 3/4% Senior
                                                    Subordinated
                                                    Notes
                            Company    Guarantors   Guarantors      Eliminations    Total
                            ---------  ----------   -------------   ------------  ---------
<S>                         <C>        <C>          <C>             <C>           <C>
ASSETS
Current Assets:
 Cash and cash
  equivalents               $  68,690  $   20,340   $          57   $         --  $  89,087
 Accounts receivable, net      85,532      51,848              --             --    137,380
 Inventories                  133,782      59,600              --             --    193,382
 Intercompany receivable       40,103      66,213         385,666       (491,982)        --
 Deferred income taxes         16,508          --              --             --     16,508
 Prepaid expenses and other
  assets                        7,172       7,961              --             --     15,133
                            ---------   ---------   -------------   ------------  ---------
    Total current assets      351,787     205,962         385,723       (491,982)   451,490
                            ---------   ---------   -------------   ------------  ---------
Property and equipment,
 net                           27,787      10,420              --             --     38,207
                            ---------   ---------   -------------   ------------  ---------
Other Assets:
 Investment in subsidiaries    29,429          --              --        (29,429)        --
 Exclusive brand licenses,
  trademarks and intangibles,
  net                          26,668       5,583         162,560             --    194,811
 Debt financing costs, net     10,724          --              --             --     10,724
 Other assets                 265,572    (267,859)          5,134             --      2,847
                            ---------   ---------   -------------   ------------  ---------
    Total other assets        332,393    (262,276)        167,694        (29,429)   208,382
                            ---------   ---------   -------------   ------------  ---------
    Total assets            $ 711,967   $ (45,894)  $     553,417   $   (521,411) $ 698,079
                            =========   =========   =============   ============  =========
LIABILITIES AND SHAREHOLDERS'
 EQUITY
Current Liabilities:
 Accounts payable - trade   $  75,542   $   8,991   $          --   $         --  $  84,533
 Intercompany payable          48,575     157,264         286,154       (491,993)        --
 Other payables and accrued
  expenses                     29,971      22,172           2,673             11     54,827
 Current portion of long-term
  debt                         91,287          --              --             --     91,287
                            ---------   ---------   -------------   ------------  ---------
     Total current
      liabilities             245,375     188,427         288,827       (491,982)   230,647
                            ---------   ---------   -------------   ------------  ---------


Long-term debt                233,802          --              --             --    233,802
Deferred income taxes and
 other                         11,038         840              --             --     11,878
                            ---------   ---------   -------------   ------------  ---------

    Total liabilities         490,215     189,267         288,827       (491,982)   476,327
                            ---------   ---------   -------------   ------------  ---------
Convertible, redeemable
 preferred stock               10,793          --              --             --     10,793
                            ---------   ---------   -------------   ------------  ---------
Shareholders' Equity
 Common stock                     250          --              --             --        250
 Additional paid-in capital   185,874    (265,164)        265,164             --    185,874
 Retained earnings
 (accumulated deficit)         29,638      27,641            (574)       (27,067)    29,638
 Treasury stock                (1,288)         --              --             --     (1,288)
 Accumulated other
  comprehensive income          2,214       2,362              --         (2,362)     2,214
 Unearned deferred
  compensation                 (5,729)         --              --             --     (5,729)
                            ---------   ---------   -------------   ------------  ---------
     Total shareholders'
      equity                  210,959    (235,161)        264,590        (29,429)   210,959
                            ---------   ---------   -------------   ------------  ---------
     Total liabilities and

      shareholders' equity  $ 711,967   $ (45,894)  $     553,417   $   (521,411) $ 698,079
                            =========   =========   =============   ============  =========

</TABLE>

                              - 17 -



              ELIZABETH ARDEN, INC. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Balance Sheet                                   As of January 31, 2004
                            ----------------------------------------------------------------
                                                    11 3/4% Senior
                                                    Subordinated
                                                    Notes
                            Company    Guarantors   Guarantors      Eliminations    Total
                            ---------  ----------   -------------   ------------  ---------
<S>                         <C>        <C>          <C>             <C>           <C>
ASSETS
Current assets:
 Cash and cash equivalents  $  68,691  $   20,338   $          58   $         --  $  89,087
 Accounts receivable, net      85,532      51,848              --             --    137,380
 Inventories                  133,782      59,600              --             --    193,382
 Intercompany receivable       40,102     350,442         101,436       (491,980)        --
 Deferred income taxes         16,508          --              --             --     16,508
 Prepaid expenses and other
  assets                        7,172       7,961              --             --     15,133
                            ---------  ----------   -------------   ------------  ---------
    Total current assets      351,787     490,189         101,494       (491,980)   451,490
                            ---------  ----------   -------------   ------------  ---------

Property and equipment, net    27,787      10,420              --             --     38,207
                            ---------  ----------   -------------   ------------  ---------
Other assets:
 Investment in subsidiaries    29,428          --              --        (29,428)        --
 Exclusive brand licenses,
  trademarks and intangibles,
  net                          26,668         126         168,017             --    194,811
 Debt financing costs          10,724          --              --             --     10,724
 Other assets                 265,573    (267,861)          5,135             --      2,847
                            ---------  ----------   -------------   ------------  ---------
    Total other assets        332,393    (267,735)        173,152        (29,428)   208,382
                            ---------  ----------   -------------   ------------  ---------
    Total assets            $ 711,967  $  232,874   $     274,646   $   (521,408) $ 698,079
                            =========  ==========   =============   ============  =========
LIABILITIES AND
 SHAREHOLDERS' EQUITY
Current Liabilities:
 Accounts payable - trade   $  75,542  $    8,991   $          --   $         --  $  84,533
 Intercompany payable          48,564     149,860         293,556       (491,980)        --
 Other payables and accrued
  expenses                     29,982      22,329           2,516             --     54,827
 Current portion of
  long-term debt               91,287          --              --             --     91,287
                            ---------  ----------   -------------   ------------  ---------
    Total current
     liabilities              245,375     181,180         296,072       (491,980)   230,647
                            ---------  ----------   -------------   ------------  ---------



Long-term debt                233,802          --              --             --   233,802
Deferred income taxes and
 other                         11,038         903             (63)            --    11,878
                            ---------  ----------   -------------   ------------ ---------
    Total liabilities         490,215     182,083         296,009       (491,980)  476,327
                            ---------  ----------   -------------   ------------ ---------
Convertible, redeemable
 preferred stock               10,793          --              --             --    10,793
                            ---------  ----------   -------------   ------------ ---------
Shareholders' Equity
 Common stock                     250          --              --             --       250
 Additional paid-in capital   185,874         (43)             43             --   185,874
 Retained earnings
 (accumulated deficit)         29,638      48,481         (21,415)       (27,066)   29,638
 Treasury stock                (1,288)         --              --             --    (1,288)
 Accumulated other
  comprehensive income          2,214       2,353               9         (2,362)    2,214
 Unearned deferred
  compensation                 (5,729)         --              --             --    (5,729)
                            ---------  ----------   -------------   ------------  ---------
     Total shareholders'
      equity                  210,959      50,791         (21,363)       (29,428)  210,959
                            ---------  ----------   -------------   ------------ ---------
     Total liabilities
      and shareholders'
      equity                $ 711,967 $   232,874   $     274,646   $   (521,408)$ 698,079
                            =========  ==========   =============   ============ =========

</TABLE>

                              - 18 -


                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
Statement of Operations                    Five Months Ended June 30, 2004
                           -----------------------------------------------------------------
                                                    7 3/4% Senior
                                                    Subordinated
                                                    Notes
                           Company     Guarantors   Guarantors      Eliminations    Total
                           ---------   ----------   -------------   ------------  ---------
<S>                        <C>         <C>          <C>             <C>           <C>
Net sales                  $ 130,267   $   92,517   $       3,930   $     (3,930) $ 222,784
Cost of sales                 91,026       43,474              --             --    134,500
                           ---------   ----------   -------------   ------------  ---------
Gross profit                  39,241       49,043           3,930         (3,930)    88,284
                           ---------   ----------   -------------   ------------  ---------
Selling, general and
 administrative costs         59,994       55,751              82         (3,930)   111,897
Depreciation and
 amortization                  4,945        2,639           1,117             --      8,701
                           ---------   ----------   -------------   ------------  ---------
(Loss) income from
 operations                  (25,698)      (9,347)          2,731             --   (32,314)
Other (expense) income:
  Interest (expense)
   income                     (9,790)      (1,126)          1,081             --    (9,835)
  Debt extinguishment
   charges                    (3,874)          --              --             --    (3,874)
  Other                       (7,181)      (2,589)           (313)        10,075        (8)
                           ---------   ----------   -------------   ------------  ---------
(Loss) income before
 income taxes                (46,543)     (13,062)          3,499         10,075   (46,031)
(Benefit from) provision
 for income taxes            (14,700)         512              --             --   (14,188)
                           ---------   ----------   -------------   ------------ ---------
Net (loss) income          $ (31,843)  $  (13,574)  $       3,499   $     10,075 $ (31,843)
                           =========   ==========   =============   ============ =========
</TABLE>



<TABLE>
<CAPTION>
Statement of Operations                    Five Months Ended June 30, 2004
                           -----------------------------------------------------------------
                                                    11 3/4% Senior
                                                    Subordinated
                                                    Notes
                           Company     Guarantors   Guarantors      Eliminations    Total
                           ---------   ----------   -------------   ------------  ---------
<S>                        <C>         <C>          <C>             <C>           <C>
Net sales                  $ 130,267   $   92,517   $       3,966   $     (3,966) $ 222,784
Cost of sales                 91,026       43,474              --             --    134,500
                           ---------   ----------   -------------   ------------  ---------
Gross profit                  39,241       49,043           3,966         (3,966)    88,284
                           ---------   ----------   -------------   ------------  ---------
Selling, general and
 administrative costs         59,994       55,789              80         (3,966)   111,897
Depreciation and
 amortization                  4,945        2,637           1,119             --      8,701
                           ---------   ----------   -------------   ------------  ---------
(Loss) income from
 operations                  (25,698)      (9,383)          2,767             --   (32,314)
Other (expense) income:
 Interest (expense)
  income                      (9,790)       5,772          (5,817)            --    (9,835)
 Debt extinguishment
  charges                     (3,874)          --              --             --    (3,874)
 Other                        (7,181)      (2,589)           (313)        10,075        (8)
                           ---------   ----------   -------------   ------------ ---------
Loss before income taxes     (46,543)      (6,200)         (3,363)        10,075   (46,031)
(Benefit from) provision
 for income taxes            (14,700)         362             150             --   (14,188)
                           ---------   ----------   -------------   ------------ ---------
Net loss                   $ (31,843)  $   (6,562)  $      (3,513)  $     10,075 $ (31,843)
                           =========   ==========   =============   ============  =========

</TABLE>


                                    - 19 -


                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Statement of Operations                    Five Months Ended June 28, 2003
                           -----------------------------------------------------------------
                                                    11 3/4% Senior
                                                    Subordinated
                                                    Notes
                           Company     Guarantors   Guarantors      Eliminations    Total
                           ---------   ----------   -------------   ------------  ---------
<S>                        <C>         <C>          <C>             <C>           <C>
Net sales                  $ 121,908   $   83,293   $       3,921   $     (3,921) $ 205,201
Cost of sales                 92,082       38,266              --             --    130,348
                           ---------   ----------   -------------   ------------  ---------
Gross profit                  29,826       45,027           3,921         (3,921)    74,853
                           ---------   ----------   -------------   ------------  ---------
Selling, general and
 administrative costs         51,372       48,234            (192)        (3,921)    95,493
Depreciation and
 amortization                  5,360        2,194             889             --      8,443
                           ---------   ----------   -------------   ------------  ---------
(Loss) income from
 operations                  (26,906)      (5,401)          3,224             --   (29,083)
Other (expense) income:
 Interest expense            (11,148)        (787)         (5,051)            --   (16,986)
 Other                        (8,131)         388          (1,337)         9,232       152
                           ---------   ----------   -------------   ------------ ---------
Loss before income taxes     (46,185)      (5,800)         (3,164)         9,232   (45,917)
(Benefit from) provision
 for income taxes            (13,444)         293             (25)            --   (13,176)
                           ---------   ----------   -------------   ------------ ---------
Net loss                   $ (32,741)  $   (6,093)  $      (3,139)  $      9,232 $ (32,741)
                           =========   ==========   =============   ============ =========

</TABLE>


                                    - 20 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
Statement of Cash Flows                    Five Months Ended June 30, 2004
                           -------------------------------------------------------------
                                                  7 3/4% Senior
                                                  Subordinated
                                                  Notes
                           Company    Guarantors  Guarantors     Eliminations    Total
                           ---------  ----------  -------------  ------------  ---------
<S>                        <C>        <C>         <C>             <C>          <C>
OPERATING ACTIVITIES:
Net cash (used in)
 provided by operating
 activities                $ (30,933) $  (17,529) $      1,867    $        4   $ (46,591)
                           ---------  ----------  -------------  ------------  ---------
INVESTING ACTIVITIES:
 Additions to property and
  equipment                   (1,892)     (2,266)           --            --      (4,158)
 Proceeds from disposals
  of property and
  equipment                       20          --            --            --          20
                           ---------  ----------  -------------  ------------  ---------
Net cash used in investing
 activities                   (1,872)     (2,266)           --            --      (4,138)
                           ---------  ----------  -------------  ------------  ---------
FINANCING ACTIVITIES:
 Proceeds from short-term
  debt                        65,900          --            --            --      65,900
 Payments on long-term
  debt                       (89,441)         --            --            --     (89,441)
 Proceeds from the exercise
  of stock options             4,085          --            --            --       4,085
 Proceeds from the issuance
  of Common stock              4,163          --            --            --       4,163
 Proceeds form the issuance
  of common stock under
  employee stock purchase
  plan                           474         174            --            --         648
 Repurchase of common stock     (435)         --            --            --        (435)
 Net change in intercompany
  obligations                (13,596)     15,483        (1,883)           (4)         --
                           ---------  ----------  -------------  ------------  ---------
Net cash (used in) provided
 by financing activities     (28,850)     15,657        (1,883)           (4)    (15,080)
                           ---------  ----------  -------------  ------------  ---------
Effect of exchange rate
 changes on cash and
 cash equivalents                216          --            --            --         216
Net decrease in cash and
 cash equivalents            (61,439)     (4,138)          (16)           --     (65,593)


Cash and cash equivalents
 at beginning of period       68,690      20,340            57            --      89,087
                           ---------  ----------  -------------  ------------  ---------
Cash and cash equivalents
 at end of period          $   7,251  $   16,202  $         41   $        --   $  23,494
                           =========  ==========  ============   ===========   =========

</TABLE>
                              - 21 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
Statement of Cash Flows                    Five Months Ended June 30, 2004
                           -------------------------------------------------------------
                                                  11 3/4% Senior
                                                  Subordinated
                                                  Notes
                           Company    Guarantors  Guarantors     Eliminations    Total
                           ---------  ----------  -------------  ------------  ---------
<S>                        <C>        <C>         <C>             <C>          <C>
OPERATING ACTIVITIES:
Net cash used in
 operating activities      $ (30,933) $  (10,655) $      (5,007)  $        4   $ (46,591)
                           ---------  ----------  -------------  ------------  ---------
INVESTING ACTIVITIES:
 Additions to property
  and equipment               (1,892)     (2,266)            --           --      (4,158)
 Proceeds from disposals
  of property and
  equipment                       20          --             --           --          20
                           ---------  ----------  -------------  ------------  ---------
Net cash used in
 investing activities         (1,872)     (2,266)            --           --      (4,138)
                           ---------  ----------  -------------  ------------  ---------
FINANCING ACTIVITIES:
 Proceeds from short-term
  debt                        65,900          --             --           --      65,900
 Payments on long-term
  debt                       (89,441)         --             --           --     (89,441)
 Proceeds from the exercise
  of stock options             4,085          --             --           --       4,085
 Proceeds from the issuance
  of Common stock              4,163          --             --           --       4,163
 Proceeds form the issuance
  of common stock under
  employee stock purchase
  plan                           474         174             --           --         648
 Repurchase of common stock     (435)         --             --           --        (435)
 Net change in intercompany
  obligations                (13,597)      8,622          4,979           (4)         --
                           ---------  ----------  -------------  ------------  ---------
Net cash (used in)
 provided by financing
 activities                  (28,851)      8,796          4,979           (4)    (15,080)
                           ---------  ----------  -------------  ------------  ---------
Effect of exchange rate
 changes on cash and
 cash equivalents                216          --             --           --         216
Net decrease in cash and
 cash equivalents            (61,440)     (4,125)           (28)          --     (65,593)
Cash and cash equivalents
 at beginning of period       68,691      20,338             58           --      89,087
                           ---------  ----------  -------------  ------------  ---------
Cash and cash equivalents
 at end of period          $   7,251  $   16,213  $          30   $       --   $  23,494
                           =========  ==========  =============  ============  =========

</TABLE>
                              - 22 -



                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Statement of Cash Flows                    Five Months Ended June 28, 2003
                          -------------------------------------------------------------
                                                   11 3/4% Senior
                                                   Subordinated
                                                   Notes
                          Company      Guarantors  Guarantors     Eliminations    Total
                          ----------   ----------  -------------  ------------  ---------
<S>                       <C>          <C>         <C>             <C>          <C>
OPERATING ACTIVITIES:
Net cash provided by
 (used in) operating
 activities               $  176,016   $(253,338)  $      5,539    $       --   $ (71,783)
                          ----------   ---------   ------------   ------------  ---------
INVESTING ACTIVITIES:
 Additions to property
  and equipment               (2,076)     (1,994)            --            --      (4,070)
                          ----------   ---------   ------------   ------------  ---------
Net cash used in
 investing activities         (2,076)     (1,994)            --            --      (4,070)
                          ----------   ---------   ------------   ------------  ---------
FINANCING ACTIVITIES:
 Payments on short-term
  debt                        84,691          --             --            --      84,691
 Payments on long-term
  debt                       (13,044)         --             --            --     (13,044)
 Proceeds from the
  exercise of stock
  options                         32          --             --            --          32
 Repurchase of common
  stock                         (264)         --             --            --        (264)
 Net change in
  intercompany obligations  (246,827)    252,034         (5,207)           --          --
                          ----------   ---------   ------------   ------------  ---------
Net cash (used in)
 provided by financing
 activities                 (175,412)    252,034         (5,207)           --      71,415
                          ----------   ---------   ------------   ------------  ---------
Effect of exchange rate
 changes on cash and
 cash equivalents                300          --             --            --         300
Net (decrease) increase
 in cash and cash
 equivalents                  (1,172)     (3,298)           332            --      (4,138)
Cash and cash equivalents
 at beginning of period        7,848      14,793             22            --      22,663
                          ----------   ---------   ------------   ------------  ---------
Cash and cash equivalents
 at end of period         $    6,676   $  11,495   $        354    $       --   $  18,525
                          ==========   =========   ============   ============  =========

</TABLE>
           [Remainder of Page Intentionally Left Blank]

                              - 23 -


                    ELIZABETH ARDEN, INC. AND SUBSIDIARIES
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.    RELATED PARTY TRANSACTION

     In March 2002, the Company provided a loan to its current chairman and
chief executive officer in the principal amount of $0.5 million (the "Note"),
which matured on March 31, 2004 and bore interest at an annual rate of 5%.
This loan replaced earlier loans made by the Company to its chairman and
chief executive officer during the fiscal year ended January 31, 1999.  In
July 2002, the chairman and chief executive officer repaid to the Company
$0.1 million of the principal amount of the Note.  The remaining loan balance
of $0.4 million plus accrued interest was repaid by the March 31, 2004
maturity date.

NOTE 13.    STATEMENT OF CASH FLOW -- SUPPLEMENTAL INFORMATION

The Company incurred the following non-cash financing and investing
activities:
<TABLE>
<CAPTION>
(Amounts in thousands)                   Five Months Ended
                                        --------------------
                                        June 30,    June 28,
                                          2004        2003
                                        --------    --------
<S>                                     <C>         <C>
Accretion on Series D Convertible
 Preferred Stock                        $    762    $  1,626
                                        ========    ========
Conversion of Series D Convertible
 Preferred Stock (See Note 9)
   Accelerated accretion                  19,090          --
                                        ========

   Conversion to Common Stock              7,070          --
   Accreted dividends not paid on
    Series D Convertible Preferred
    Stock                                  4,484          --
                                        --------
   Conversion of Series D Convertible
    Preferred Stock                       11,554          --
                                        ========
Issuance of restricted stock, net of
 forfeitures from prior grants             4,542         557
</TABLE>


                              - 24 -


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

      In connection with the safe harbor provisions of the private securities
litigation reform act of 1995, Elizabeth Arden, Inc., is hereby providing
cautionary statements identifying important factors that could cause our
actual results to differ materially from those projected in forward-looking
statements (as defined in such Act) made in this transition report on Form
10-Q.  Any statements that are not historical facts and that express,
or involve discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always, through
the use of words or phrases such as "will likely result," "are expected to,"
"will continue," "is anticipated," "estimated," "intends," "plans" and
"projection") may be forward-looking and may involve estimates and
uncertainties which could cause actual results to differ materially from
those expressed in the forward-looking statements.  Accordingly, any such
statements are qualified in their entirety by reference to, and are
accompanied by, the following key factors that have a direct bearing on our
results of operations: our absence of contracts with customers or suppliers
and our ability to maintain and develop relationships with customers and
suppliers; international and domestic economic and business changes that
could impact consumer confidence; the impact of competitive products and
pricing; risks of international operations, including foreign currency
fluctuations, economic and political consequences of terrorist attacks,
political instability in certain regions of the world, and diseases affecting
customer purchasing patterns; our ability to launch new products and
implement our growth strategy; our ability to successfully and cost-
effectively integrate acquired businesses or new brands; our substantial
indebtedness, debt service obligations and restrictive covenants in our
revolving credit facility and our indenture for our 7 3/4% senior
subordinated notes; our customers' financial condition; our ability to access
capital for acquisitions; changes in product mix to less profitable products;
the retention and availability of key personnel; the assumptions underlying
our critical accounting estimates; delays in shipments, inventory shortages
and higher costs of production due to interruption of operations at key third
party manufacturing or fulfillment facilities that manufacture or provide
logistic services for the majority of our supply of certain products; changes
in the retail, fragrance and cosmetic industries; our ability to protect our
intellectual property rights; changes in the legal, regulatory and political
environment that impact, or will impact, our business, including changes to
customs or trade regulations or accounting standards; and other risks and
uncertainties. We caution that the factors described herein could cause
actual results to differ materially from those expressed in any forward-
looking statements we make and that investors should not place undue reliance
on any such forward-looking statements.  Further, any forward-looking
statement speaks only as of the date on which such statement is made, and we
undertake no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made or to
reflect the occurrence of anticipated or unanticipated events or
circumstances. New factors emerge from time to time, and it is not possible
for us to predict all of such factors.  Further, we cannot assess the impact
of each such factor on our results of operations or the extent to which any
factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.

GENERAL

      This discussion should be read in conjunction with the Notes to
Unaudited Consolidated Financial Statements contained herein and Management's
Discussion and Analysis of Financial Condition and Results of Operations
appearing in our Annual Report on Form 10-K for the year ended January 31,
2004.  The results of operations for an interim period may not give a true
indication of results for the year. In the following discussions, all
comparisons are with the corresponding items in the prior year's period.

      Our operations have historically been seasonal, with higher sales
generally occurring during the first half of the fiscal year (July through
December) as a result of increased demand by retailers in anticipation of,
and during, the holiday season.  During the twelve months ended June 30,
2004, approximately 60%of our net sales were made during those months.  Due
to the size and timing of certain orders from our customers, sales, results
of operations, working capital requirements and cash flows can vary between
quarters of the same and different years.  As a result, we expect to
experience variability in net sales, net income, working capital requirements
and cash flows on a quarterly basis.


                              - 25 -



      We experience seasonality in our working capital, with peak inventory
from June to September and peak receivable balances from September to
January.  Our working capital borrowings are also seasonal and are normally
highest in the months of September, October and November.  During the months
of November, December and January of each year, significant cash is normally
generated as customer payments on holiday season orders are received.

OVERVIEW

      On June 2, 2004, our board of directors approved a change in our fiscal
year end from January 31 to June 30, effective as of June 30, 2004.  The
change was implemented to better reflect our business cycle and to enhance
business planning relative to our customers' retail calendars.  Accordingly,
the financial statements are presented for the transition period ended
June 30, 2004 and the comparable five-month period ended June 28, 2003.

      For the five months ended June 30, 2004, net sales increased 8.6%
compared to the five months ended June 28, 2003 as a result of increased
sales to U.S. mass retail accounts, the favorable impact of foreign currency
rates and new product launches, including a new Elizabeth Arden fragrance,
Elizabeth Arden Provocative Woman.  Net sales were reduced by increased in-
store promotional costs and lower sales to a U.S. department store account
due largely to a change in that account's merchandising strategy in the
fragrance category.  Selling, general and administrative expenses increased
19.2% during the five months ended June 30, 2004 compared to the five months
ended June 28, 2003 as a result of additional advertising to support new
product launches, including the use of television and print advertising for
the Elizabeth Arden Provocative Woman launch and the skinsimple launch,
higher brand development costs, including costs related to the development of
the Curious Britney Spears fragrance which is scheduled to launch in U.S.
department stores in the fall of 2004, and the adverse impact of foreign
currency rates. During the five months ended June 30, 2004, interest expense
decreased by $7.2 million as a result of our debt refinancing activities. The
increase in advertising and promotional activities was funded with a portion
of the savings in interest expense.  We anticipate continuing to use savings
in interest expense to fund brand development and working capital
requirements during the fiscal year ended June 30, 2005.  For the five months
ended  June 30, 2004, we incurred debt extinguishment charges of $3.9 million
associated with the redemption of the remaining $84.3 million aggregate
principal amount 10 3/8% senior notes due 2007 in February 2004.  In
addition, net loss attributable to common shareholders for the five months
ended June 30, 2004 increased due to non-cash charges aggregating $19.1
million related to the accelerated accretion of the remaining shares of the
Series D convertible preferred stock, which were converted into common stock
by an affiliate of Unilever in April and June 2004 and sold in a public
offering in June 2004.  As a result of the conversion of the remaining shares
of the Series D convertible preferred stock, no shares of Series D
convertible preferred stock remain outstanding, and we no longer will be
required to pay dividends or incur charges associated with the accelerated
accretion on the Series D convertible preferred stock.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

      We believe the accounting policies below represent our critical
accounting policies. See our Annual Report on Form 10-K for the year ended
January 31, 2004 for a detailed discussion on the application of these and
other accounting policies.

      ACCOUNTING FOR ACQUISITIONS.  We have accounted for our acquisitions,
including the acquisition of the Elizabeth Arden business, under the purchase
method of accounting for business combinations. Under the purchase method of
accounting, the cost, including transaction costs, are allocated to the
underlying net assets, based on their respective estimated fair values. The
excess of the purchase price over the estimated fair values of the net assets
acquired is recorded as goodwill.

      The judgments made in determining the estimated fair value and expected
useful lives assigned to each class of assets and liabilities acquired can
significantly affect net income. For example, different classes of assets
will have useful lives that differ - the useful life of property, plant, and
equipment acquired will differ substantially from the useful life of brand
licenses and trademarks.  Consequently, to the extent a longer-lived asset is
ascribed greater value under the purchase method than a shorter-lived asset,
net income in a given period may be higher.


                              - 26 -



      Determining the fair value of certain assets and liabilities acquired
is judgmental in nature and often involves the use of significant estimates
and assumptions. One of the areas that requires more judgment is determining
the fair values and useful lives of intangible assets. To assist in this
process, we often obtain appraisals from independent valuation firms for
certain intangible assets.

      Our intangible assets generally consist of exclusive brand licenses and
trademarks. We do not carry any goodwill. The value of our intangible assets,
including brand licenses, trademarks and intangibles, is exposed to future
adverse changes if we experience declines in operating results or experience
significant negative industry or economic trends. We periodically review
intangible assets, at least annually or more often as circumstances dictate,
for impairment and the useful life assigned using the guidance of applicable
accounting literature.

      We have determined that the Elizabeth Arden trademarks have indefinite
useful lives as cash flows from the use of the trademarks are expected to be
generated indefinitely.  During the five months ended June 30, 2004, we
completed our annual impairment testing of these assets with the assistance
of a third party valuation firm. The analysis and assessments of these assets
indicated that no impairment adjustment was required.

      REVENUE RECOGNITION.  Sales are recognized when title and risk of loss
transfers to the customer and collectibility of the resulting receivable is
probable. Sales are recorded net of estimated returns and other allowances.
The provision for sales returns represents management's estimate of future
returns based on historical experience and considering current external
factors and market conditions.

      ALLOWANCES FOR SALES RETURNS AND MARKDOWNS.  As is customary in the
prestige beauty business, we grant certain of our customers, subject to our
authorization and approval, the right to either return product or to
receive a markdown allowance for certain promotional product. Upon sale, we
record a provision for product returns and markdowns estimated based on our
historical and projected experience, economic trends and changes in customer
demand. There is considerable judgment used in evaluating the factors
influencing the allowance for returns and markdowns, and additional
allowances in any particular period may be needed.

      ALLOWANCES FOR DOUBTFUL ACCOUNTS RECEIVABLE.  We maintain allowances
for doubtful accounts to cover uncollectible accounts receivable, and we
evaluate our accounts receivable to determine if they will ultimately be
collected. This evaluation includes significant judgments and estimates,
including an analysis of receivables aging and a customer-by-customer review
for large accounts. If, for example, the financial condition of our customers
deteriorates resulting in an impairment of their ability to pay, additional
allowances may be required.

      PROVISIONS FOR INVENTORY OBSOLESCENCE.  We record a provision for
estimated obsolescence and shrinkage of inventory. Our estimates consider the
cost of inventory, forecasted demand, the estimated market value, the shelf
life of the inventory and our historical experience. If there are changes to
these estimates, additional provisions for inventory obsolescence may be
necessary.

      STOCK-BASED COMPENSATION.  We account for our stock-based compensation
under the recognition and measurement principles prescribed by Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. No stock-based compensation cost is
reflected in net income for employee and director option grants, as such
grants had an exercise price equal to the market value of the underlying
common stock on the date of grant. The pro forma effect on net loss and net
loss per common share for the five months ended June 30, 2004 and June 28,
2003 is set forth in Note 3 to the Notes to Unaudited Consolidated Financial
Statements.

      PERFORMANCE ACCELERATED RESTRICTED STOCK ("PARS").  PARS are restricted
stock awards with a pre-defined vesting period of six years that also provide
for accelerated vesting to three, four or five years from the date of grant
if our total shareholder return exceeds the total shareholder return of the
median of the companies comprising the Russell 2000 Index over the respective
three, four or five-year period. A new grant of PARS will occur when the
initial grant vests. The PARS are recorded as unearned deferred compensation
in shareholders' equity at the market value on the date of grant and will be
amortized over a six-year vesting period for the first two years following
the date of grant but may be accelerated after two years based on our
probability of exceeding the total shareholder return of the median of the
companies comprising the Russell 2000 Index.  As a result of our total
shareholder return exceeding the median of the companies comprising the
Russell 2000 Index over the past two-year period from the date the PARS were
granted, we are


                              - 27 -


accelerating the amortization based on the likelihood that accelerated
vesting will occur on the third anniversary of the date of the grant.  The
anticipated amortization expense is expected to be approximately $2.6 million
during the fiscal year ended June 30, 2005.

      PERFORMANCE-BASED RESTRICTED STOCK.  The performance-based restricted
stock will vest as to one third of the stock granted on each of the first,
second and third full annual fiscal years following the date of grant,
but only if the person receiving the grant is employed by us at the time of
vesting and we achieve a cumulative annualized increase in earnings per share
of 10%, excluding any one-time or extraordinary events (as determined by the
compensation committee of the board of directors), and after giving effect
to any stock splits or other recapitalizations.  The restricted stock is
recorded as unearned deferred compensation in shareholders' equity, is marked
to market during each quarterly reporting period and is amortized over the
three-year vesting period.

      INCOME TAXES AND VALUATION RESERVES.  A valuation allowance may be
required to reduce deferred tax assets to the amount that is more likely than
not to be realized. We consider projected future taxable income and ongoing
tax planning strategies in assessing a potential valuation allowance. In the
event we determine that we may not be able to realize all or part of our
deferred tax asset in the future, or that new estimates indicate that a
previously recorded valuation allowance is no longer required, an adjustment
to the deferred tax asset would be charged or credited to net income in the
period of such determination.

RESULTS OF OPERATIONS

      The following discussion compares the historical results of operations
for five months ended June 30, 2004 and June 28, 2003.  Results of operations
are in thousands and as a percentage of net sales, were as follows
(percentages may not add due to rounding):
<TABLE>
<CAPTION>
                                    June 30, 2004          June 28, 2003
                                 -------------------    -------------------
<S>                              <C>          <C>       <C>          <C>
Net sales                        $  222,784   100.0%    $  205,201   100.0%
Cost of sales                       134,500    60.4        130,348    63.5
  Gross profit                       88,284    39.6         74,853    36.5
Selling, general and
 administrative expenses            111,897    50.2         95,493    46.5
Depreciation and amortization         8,701     3.9          8,443     4.1
Loss from operations                (32,314)  (14.5)       (29,083)  (14.2)
Interest expense, net                (9,835)   (4.4)       (16,986)   (8.3)
Debt extinguishment (charges)
 gain                                (3,874)   (1.7)           123     0.1
Other (expense) income                   (8)   (0.0)            29     0.0
Loss before income taxes            (46,031)  (20.7)       (45,917)  (22.4)
Benefit from income taxes           (14,188)   (6.4)       (13,176)   (6.4)
Net loss                            (31,843)  (14.3)       (32,741)  (16.0)
Accretion and dividend on
 preferred stock                        762     0.3          1,626     0.8
Accelerated accretion on
 converted preferred stock           19,090     8.6             --     0.0
Net loss attributable to
 common shareholders             $  (51,695)  (23.2)%   $  (34,367)  (16.7)%

Other data:
EBITDA and EBITDA margin (1)     $  (27,495)  (12.3)%   $  (20,488)  (10.0)%

(1)  For a definition of EBITDA and a reconciliation of net loss to EBITDA,
see "EBITDA" under Results of Operations - Five Months Ended June 30, 2004
Compared to Five Months Ended June 28, 2003.  EBITDA margin represents
EBITDA divided by net sales.
</TABLE>

                              - 28 -



FIVE MONTHS ENDED JUNE 30, 2004 COMPARED TO FIVE MONTHS ENDED JUNE 28, 2003

      NET SALES.  Net sales increased approximately 8.6% for the five months
ended June 30, 2004 over the five months ended June 28, 2003. The sales
increase was driven by increased fragrance sales to our mass retail
customers, the favorable impact of foreign currency rates, new product
launches, including the launch of the Elizabeth Arden Provocative Woman
fragrance, and improvement in the travel retail business, which was adversely
affected by the SARS epidemic in the prior year.  The increase in net sales
was partially offset by lower sales to a U.S. department store account due to
a change in that account's merchandising strategy in the fragrance category
and an increase in in-store support costs at U.S. department stores
associated with the new fragrance launch.

      GROSS PROFIT.  Gross profit increased 17.9% for the five months ended
June 30, 2004 over the five months ended June 28, 2003. The increase in gross
profit was principally due to a greater proportion of sales of owned and
licensed brands, which have higher gross margins than distributed brands,
higher net sales, the favorable impact of foreign currency rates and lower
supply chain and distribution costs. Gross margin increased to 39.6% for the
five months ended June 30, 2004 from 36.5% for the five months ended June 28,
2003.

      SG&A.  Selling, general and administrative expenses increased 17.2% for
the five months ended June 30, 2004 over the five months ended June 28, 2003.
The increase was principally due to the adverse impact of foreign currency
rates, additional advertising to support new product launches, including
the use of television and print advertising for the Elizabeth Arden
Provocative Woman and skinsimple launches, higher product development costs,
additional costs associated with our change in fiscal year end and a $1.3
million restructuring charge related to the consolidation of our U.S.
distribution facilities, which was announced in November 2003 and was
substantially completed by March 2004.

      DEPRECIATION AND AMORTIZATION.  Depreciation and amortization increased
3.1% for the five months ended June 30, 2004, compared to the five months
ended June 28, 2003, principally as a result of the acceleration of
depreciation of certain fixed assets at our Miami Lakes facility due to the
closing of the distribution operations at this facility, partially offset by
certain intangibles that were fully amortized at the end of fiscal
2004.

      INTEREST EXPENSE.  Interest expense, net of interest income, decreased
by 42.1% for the five months ended June 30, 2004 in comparison to the five
months ended June 28, 2003. The decrease resulted from lower interest rates
on our long-term debt due to refinancing activities in fiscal 2004 and
February 2004, and reduced borrowings and lower interest rates paid under our
credit facility.

      DEBT EXTINGUISHMENT COSTS.  During the five months ended June 30, 2004,
we recorded $3.9 million of debt extinguishment charges relating to the
February 2004 redemption of $84.3 million aggregate principal amount of the
10 3/8% senior notes.  See Note 7 to the Notes to Unaudited Consolidated
Financial Statements.

      BENEFIT FROM INCOME TAXES.  The benefit from income taxes increased by
$1.5 million for the five months ended June 30, 2004, as compared to the five
months ended June 28, 2003, reflecting higher operating losses, debt
extinguishment charges, and a higher tax rate, partially offset by lower
interest expense.  The benefit from income taxes also includes federal, state
and foreign deferred income taxes of approximately $15.1 million that
occurred as a result of timing differences associated with the change in
fiscal year end.  The effective tax rate calculated as a percentage of loss
before income taxes for the five months ended June 30, 2004 was 30.8%
compared to 28.7% for the five months ended June 28, 2003.  The change in the
effective tax rate as compared to the prior year primarily reflects an
expected increase in U.S. taxable income relative to consolidated income,
primarily due to lower interest expense.

      NET LOSS.  Net loss for the five months ended June 30, 2004 decreased
by approximately $0.9 million as compared to the five months ended June 28,
2003. The decrease was a result of lower interest expense and a higher income
tax benefit, partially offset by the debt extinguishment and restructuring
charges and a higher loss from operations.

      ACCRETION AND DIVIDEND ON PREFERRED STOCK.  Accretion and dividend on
preferred stock decreased by 53.1% as a result of the conversions of Series D
convertible preferred stock that occurred in October 2003,


                              - 29 -



April 2004 and June 2004.  The accretion and dividend on preferred stock,
which is a non-cash charge to net loss attributable to common shareholders,
represents the accretion of the original carrying value of $8.5 million of
the Series D convertible preferred stock to its liquidation preference, and
the imputed dividends on such preferred stock.

      ACCELERATED ACCRETION ON CONVERTED PREFERRED STOCK.  We recorded the
final non-cash accelerated accretion charges on the Series D convertible
preferred stock of $19.1 million as a result of the April 2004 and June 2004
conversions of the Series D convertible preferred stock into common stock by
an affiliate of Unilever. No further accretion and dividend charges related
to the Series D convertible preferred stock will be taken as a result of such
conversions.  See Note 9 to the Notes to Unaudited Consolidated Financial
Statements.

      NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS.  In the five months ended
June 30, 2004, the net loss attributable to common shareholders increased by
$17.3 million compared to the five months ended June 28, 2003, principally
due to $19.1 million of non-cash accelerated accretion charges on the Series
D convertible preferred stock converted into common stock in April 2004 and
June 2004 and $5.1 million of debt extinguishment and restructuring charges,
partially offset by a decrease in interest expense of $7.2 million and
an increase in gross profit.  The impact of the accelerated accretion charges
associated with the conversions of our Series D convertible preferred stock
into common stock and the debt extinguishment and restructuring charges
caused our diluted net loss per share for the five months ended June 30, 2004
to increase by $0.89 per share.

      EBITDA.  EBITDA (net income plus the provision for income taxes (or net
loss less the benefit from income taxes), plus interest expense, plus
depreciation and amortization expense) decreased by 34.2% for the five months
ended June 30, 2004, as compared to the five months ended June 28, 2003. The
decrease in EBITDA was primarily the result of the debt extinguishment and
restructuring charges, and higher selling, general and administrative
expenses.

      EBITDA should not be considered as an alternative to operating income
(loss) or net income (loss) (as determined in accordance with generally
accepted accounting principles) as a measure of our operating performance or
to net cash provided by operating, investing and financing activities (as
determined in accordance with generally accepted accounting principles) or as
a measure of our ability to meet cash needs. We believe that EBITDA is a
measure commonly reported and widely used by investors and other interested
parties as a measure of a company's operating performance and debt servicing
ability because it assists in comparing performance on a consistent basis
without regard to capital structure (particularly when acquisitions
are involved), depreciation and amortization, which can vary significantly
depending upon accounting methods (particularly when acquisitions are
involved) or non-operating factors (such as historical cost).  Accordingly,
as a result of our capital structure and the accounting method used for our
acquisitions, we believe EBITDA is a relevant measure.  This information has
been disclosed here to permit a more complete comparative analysis of our
operating performance relative to other companies and of our debt servicing
ability. EBITDA may not, however, be comparable in all instances to other
similar types of measures.



      The following is a reconciliation of net loss, as determined in
accordance with generally accepted accounting principles, to EBITDA:


                              - 30 -

<TABLE>
<CAPTION>
         (Amounts in thousands)               Five Months Ended
                                           ------------------------
                                            June 30,      June 28,
                                              2004          2003
                                           ---------      ---------
         <S>                               <C>            <C>
         Net loss                          $ (31,843)     $ (32,741)
         Plus:
           Benefit from income taxes         (14,188)       (13,176)
           Interest expense, net               9,835         16,986
           Depreciation and amortization       8,701          8,443
                                           ---------      ---------
             EBITDA                        $ (27,495)(1)  $ (20,488)(2)
                                           =========      =========

         (1)  For the five months ended June 30, 2004, EBITDA includes debt
         extinguishment and restructuring charges of approximately $3.9
         million and $1.3 million, respectively.

         (2)  For the five months ended June 28, 2003, EBITDA includes a debt
         extinguishment gain of $0.1 million.
</TABLE>

FINANCIAL CONDITION
<TABLE>
<CAPTION>
         (Amounts in thousands)                    Five Months Ended
                                                ------------------------
                                                 June 30,      June 28,
                                                   2004          2003
                                                ---------      ---------
   <S>                                          <C>            <C>
   Net cash used in operating activities        $ (46,591)     $ (71,483)
   Net cash used in investing activities           (4,138)        (4,070)
   Net cash (used in) provided by
    financing activities                          (15,080)        71,415
   Net decrease in cash and cash equivalents      (65,593)        (4,138)
</TABLE>

     CASH FLOWS.    Net cash used in operating activities decreased 34.8% for
the five months ended June 30, 2004 as compared to the five months ended June
28, 2003. The decrease for the five months ended June 30, 2004 was primarily
due to lower interest expense, a decrease in accounts receivable resulting
from improved collection efforts, a lower increase in prepaid expenses and
other costs and an increase in accounts payable and other payables and
accrued expenses.

     Net cash used in financing activities increased by $86.5 million for the
five months ended June 30, 2004 as compared to five months ended June 28,
2003.  The increase in net cash used in financing activities for the five
months ended June 30, 2004 was primarily due to the February 2004 redemption
of $84.3 million principal amount of the 10 3/8% senior notes due 2007
utilizing the net proceeds derived from the sale of $225.0 million of 7 3/4%
senior subordinated notes in January 2004 and $18.8 million in decreased
borrowings outstanding under the revolving credit facility as compared to the
prior period due to improved cash flows from operations.  This was partially
offset by approximately $8.3 million in proceeds from the exercise of stock
options, and the issuance of common stock in a public offering and under the
employee stock purchase plan.


     FUTURE LIQUIDITY AND CAPITAL NEEDS.  Our principal future uses of funds
are for working capital requirements, including brand development and
marketing expenses, additional brand acquisitions or product distribution
arrangements, capital expenditures and debt service.  We have historically
financed, and we expect to continue to finance, our needs primarily through
internally generated funds, our credit facility and external financing.  We
collect cash from our customers based on our sales to them and their
respective payment terms.

     We have a revolving bank credit facility with a syndicate of banks that
matures in January 2006. Our borrowings under this facility are limited to a
"borrowing base," calculated based on 85% of eligible accounts receivable and
75% of eligible inventories (65% from November 16 to May 15). The borrowings
are collateralized by a first priority lien on all of our U.S. accounts
receivable and inventory. The credit facility prohibits the payment of cash
dividends and the incurrence of debt (other than refinancing and certain
small amounts of indebtedness). The credit facility also has a requirement
that we maintain a fixed charge coverage ratio of 1.1:1 if average borrowing
availability under the facility declines to less than $50 million. In
addition, the indenture pursuant to which our 7 3/4% senior subordinated
notes are issued restricts the incurrence of


                              - 31 -


debt (other than refinancing indebtedness and certain other indebtedness) and
the payment of dividends subject to satisfaction of a fixed charge coverage
ratio and net income tests.

     On February 25, 2004, we executed an amendment to our credit facility.
This amendment included a reduction in the range of interest rates included
in the applicable margin, which is added to either LIBOR-based rates or prime
rates, at our option and based upon the amount of our outstanding loan
balance that we have placed in LIBOR and prime rate-based loans. The interest
rates included in the applicable margin were reduced by 0.25% to a range of
2.00% to 2.75% for LIBOR loans and to a range of 0.25% to 1.00% for prime
rate loans and are now based on a fixed charge coverage ratio instead of a
ratio of consolidated debt to EBITDA. As of January 31, 2004, the applicable
margin was 2.75% for LIBOR loans and 1.00% for prime rate loans. As of
June 30, 2004, the applicable margin was 2.25% for LIBOR loans and 0.50% for
prime rate loans.  The amendment also included a 0.125% reduction in the
lower end of the range of the commitment fee on the unused portion of the
credit facility to a range of 0.25% to 0.5% per year based on a debt service
ratio. At June 30, 2004, the commitment fee was 0.375%.  On June 2, 2004, we
entered into an amendment to our credit facility to adjust certain covenants
for the change in fiscal year end.  See Note 6 to Notes to Unaudited
Consolidated Financial Statements.

     Based upon our internal projections, we believe that the credit
facility, as currently amended and restated, provides sufficient flexibility
so that we will remain in compliance with its terms. If our actual results
deviate significantly from our projections, however, we may not remain in
compliance with the fixed charge covenant and would not be allowed to borrow
under the revolving credit facility. In addition, a default under our
revolving credit facility that causes acceleration of the debt under this
facility could trigger a default on our senior notes.  In the event we are
not able to borrow under our credit facility, we would be required to develop
an alternative source of liquidity. There is no assurance that we could
obtain replacement financing or what the terms of such financing, if
available, would be. As of June 30, 2004, we had $65.9 million outstanding
under our credit facility and $56.2 million of availability, as well as $23.5
million in cash and cash equivalents.

     We believe that existing cash and cash equivalents, internally generated
funds and borrowings under our credit facility will be sufficient to cover
debt service, working capital requirements and capital expenditures for
the next twelve months other than additional working capital requirements
that may result from further expansion of our operations through acquisitions
of additional brands or new product distribution arrangements.

RECENTLY ADOPTED ACCOUNTING STANDARDS

     In January 2003, FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities" ("FIN 46"), was issued.  FIN 46 provides guidance on
consolidating variable interest entities and applies immediately to
variable interests created after January 31, 2003.  In December 2003, the
FASB revised and superseded FIN 46 with the issuance of FIN 46R in order to
address certain implementation issues that will be adopted the first
reporting period ending after March 15, 2004.  The interpretation requires
variable interest entities to be consolidated if the equity investment at
risk is not sufficient to permit an entity to finance its activities without
support from other parties or the equity investors lack certain specified
characteristics.  The effect of the adoption of FIN 46 and FIN 46R was
immaterial to our consolidated financial statements.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

     As of June 30, 2004, we had $65.9 million in borrowings outstanding
under our credit facility.  Borrowings under our credit facility are
seasonal, with peak borrowings in the months of September, October and
November.  Borrowings under the credit facility are subject to variable rates
and, accordingly, our earnings and cash flow will be affected by changes in
interest rates.  In February 2004, we entered into two interest rate swap
transactions to swap $50.0 million of our fixed rate 7 3/4% senior
subordinated notes due 2014 to a floating rate of interest based on LIBOR to
better balance our mix of fixed and floating rate debt.  In the short term,
this will provide us with a lower level of interest expense related to a
portion of the 7 3/4% senior subordinated notes based on current LIBOR rates;
however, over the life of the notes, interest expense may be greater than 7
3/4% based upon fluctuations in LIBOR.  In the event of an adverse change in
interest rates, our results could be negatively affected.  We can terminate
the swap at our option at any time and the counter party can call the swap
any time after January 2009.  We designated the swap as a fair value hedge.


                              - 32 -



FOREIGN CURRENCY RISK

     We sell our products in approximately 90 countries around the world.
During the five months ended June 30, 2004 and the five months ended June 28,
2003, we derived approximately 42% and 41%, respectively, of our net sales
from our international operations.  We conduct our international operations
in a variety of different countries and derive our sales in currencies
including the Euro, British pound, Swiss franc, Canadian dollar and
Australian dollar, as well as the U.S. dollar. Our operations may be subject
to volatility because of currency changes, inflation changes and changes in
political and economic conditions in the countries in which we operate.  With
respect to international operations, our sales and expenses are typically
denominated in local currency, while costs of goods sold are denominated in a
combination of local currency and the U.S. dollar.  Our results of operations
are reported in U.S. dollars.  Fluctuations in currency rates can affect our
reported sales, margins, operating costs and the anticipated settlement of
our foreign denominated receivables and payables.  Most of our skincare and
cosmetic products are produced in a third-party manufacturing facility
located in Roanoke, Virginia.  A weakening of the foreign currencies in which
we generate sales relative to the currencies in which our costs are
denominated, which is primarily the U.S. dollar, may decrease our reported
cash flow and operating profits.  Our competitors may or may not be subject
to the same fluctuations in currency rates, and our competitive position
could be affected by these changes.  The cumulative effect of translating
balance sheet accounts from the functional currency into the U.S. dollar at
current exchange rates is included in "Accumulated other comprehensive
income" on our consolidated balance sheets.

     In March 2004, we entered into foreign currency contracts of one to five
months duration for 9.6 million Euros and 5.6 million British pounds and, in
June 2004, we entered into foreign currency contracts of one to eight months
duration for 7.3 million Euros and 4.3 million British pounds to reduce the
exposure of our foreign subsidiary revenues to fluctuations in currency
rates.  We have designated each foreign currency option contract as a cash
flow hedge.  The unrealized gain, net of taxes, at June 30, 2004 associated
with these contracts of $111,000 is included in accumulated other
comprehensive income.  We intend to only enter into foreign currency
contracts that qualify for hedge accounting and, therefore, the gains and
losses will only be recognized in earnings in the period in which the
contracts expire. We do not utilize foreign exchange contracts for trading or
speculative purposes.  There can be no assurance that our hedging operations,
if any, will eliminate or substantially reduce risks associated with
fluctuating exchange rates.

ITEM 4.    CONTROLS AND PROCEDURES

     The Company's Chairman and Chief Executive Officer and Executive Vice
President and Chief Financial Officer, who are the principal executive
officer and principal financial officer, respectively, have evaluated the
effectiveness and operation of the Company's disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended, as of the end of the period covered
by this transition report (the "Evaluation Date"). Based upon such
evaluation, they have concluded that, except as described below, as of the
Evaluation Date, the Company's disclosure controls and procedures are
functioning effectively to provide reasonable assurance that information
required to be disclosed by the Company in its reports filed or submitted by
it under the Securities Exchange Act of 1934, as amended, has been recorded,
processed, summarized and reported within the time periods specified in the
Commission's  rules and forms.

CHANGE IN INTERNAL CONTROL OVER FINANCIAL REPORTING

     During the course of the preparing of our consolidated financial
statements for the five month transition period ended June 30, 2004,
management determined, and our independent auditors, PricewaterhouseCoopers
LLP, confirmed, the existence of a material weakness in internal controls
relating  to the valuation of ending inventory of a foreign subsidiary.  The
material weakness relates to the lack of a reconciliation process to verify
the recorded inventory value at this subsidiary.  The ultimate effect of the
adjustments that resulted from this matter was not material to our
consolidated financial statements.

     Management's corrective actions and procedures to address the identified
condition include: establishing a monthly reconciliation process to verify
inventory valuation; reviewing and approving the reconciliation process by
senior financial management; and implementing revised accounting policies and
procedures relating to the valuation of this inventory.


                              - 33 -


     In March 2004, we completed the consolidation and modification of the
primary United States order processing and fulfillment systems as part of the
consolidation of our United States distribution and warehouse operations into
our newly expanded facility in Roanoke, Virginia.  This consolidation and
modification required a change in our internal control over financial
reporting.  Based on our recent evaluation of these changes, there are no
significant deficiencies or material weaknesses in the design or the
operations of these systems and internal control over financial reporting
which are reasonably likely to adversely affect our ability to record,
process, summarize and report financial information.


                              - 34 -



PART II.   OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

     On June 30, 2004, we settled a breach of contact action filed in
December 2000 by Adenat, Inc., a Canadian customer of Unilever.  Adenat filed
suit in the Ontario, Canada Superior Court of Justice against a number of
Unilever affiliates, our company and several individuals, including officers
of Unilever and our company who were subsequently removed from the case.
Adenat alleged that Unilever breached contractual obligations owed to Adenat
and that we interfered in that relationship. Adenat sought to enjoin the
termination of the alleged distribution agreement by Unilever and sought
compensatory damages of Canadian $55 million (approximately US $41 million at
January 31, 2004) against each of Unilever and us, plus punitive damages of
Canadian $35 million (approximately US $26 million at January 31, 2004).  We
did not pay or receive any amounts to settle the case.

ITEM 2.    CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF
           EQUITY SECURITIES

     This table provides information with respect to purchases by the Company
of shares of its Common Stock during the five months ended June 30, 2004:

<TABLE>
<CAPTION>
                  Issuer Purchases of Equity Securities

                                (a)           (b)         (c)            (d)
                            ------------    -------    -----------   -------------
                                                       Total
                                                       Number        Approximate
                                                       Purchased     Dollar Value
                                                       as Part of    that May Yet
                            Total           Average    Publicly      Be Purchased
                            Number of       Price      Announced     Under the
                            Shares          Per        Plans or      Plans or
Period                      Purchased(1)    Share      Programs      Programs(2)
------------------------    ------------    -------    -----------   -------------
<S>                               <C>       <C>                 <C>  <C>
February 1, 2004 through
March 6, 2004                          0    $     0              0   $   2,179,389

March 7, 2004 through
April 3, 2004                          0    $     0              0   $   2,179,389

April 4, 2004 through
May 1, 2004                       20,226    $ 21.50              0   $   1,744,530

May 2, 2004 through
June 5, 2004                           0    $     0              0   $   1,744,530

June 6, 2004 through
June 30, 2004                          0    $     0              0   $   1,744,530
                            ------------    -------    -----------   -------------
      Total                       20,226    $ 21.50              0   $   1,744,530
                            ============    =======    ===========   =============

(1)  Reflects deemed surrender to the Company of shares of Common Stock to satisfy
tax withholding obligations in connection with the vesting of restricted stock
issued to employees under the Elizabeth Arden, Inc. 2000 Stock Incentive Plan.

(2)  In January 2000, the Company's board of directors approved and publicly
announced a common stock repurchase program to purchase up to $10 million of the
Company's common stock (the "2000 Stock Purchase Program").  Amounts reflect the
remaining maximum dollar value of shares that may be purchased under the 2000 Stock
Purchase Program.

</TABLE>

                              - 35 -



ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a)  The Annual Meeting of Shareholders (the "Annual Meeting") of the Company
     was held on June 22, 2004, in Miami Lakes, Florida.

(b)  The following directors were elected at the Annual Meeting effective
     June 23, 2004:

        E. Scott Beattie
        Fred Berens
        George Dooley
        Richard C.W. Mauran
        William M. Tatham
        J. W. Nevil Thomas

(c)  The shareholders voted at the Annual Meeting on the following matters:

     1.  The vote on the election of directors to serve until the next annual
         meeting of shareholders or until their successors are duly elected
         and qualified was as follows:
<TABLE>
<CAPTION>
                                              Votes Cast
                                       ------------------------
                                                     Against or
                                          For         Withheld
                                       ----------    ----------
               <S>                     <C>              <C>
               E. Scott Beattie        22,815,352       939,080
               Fred Berens             22,792,842       961,590
               George Dooley           23,228,746       525,686
               Richard C.W. Mauran     22,855,894       898,538
               William M. Tatham       23,292,414       462,318
               J. W. Nevil Thomas      22,792,684       961,748
</TABLE>

     2.  The vote on the approval of the 2004 Stock Incentive Plan was as
         follows:
<TABLE>
<CAPTION>
                                         Votes Cast
                    ----------------------------------------------------
                                  Against or      Broker
                        For        Withheld     Non-Votes    Abstentions
                    ----------    ----------    ---------    -----------
                    <S>            <C>          <C>                <C>
                    14,092,609     7,940,826    1,715,509          5,488
</TABLE>



    3.   The vote on the approval of the 2004 Non-Employee Director Stock
         Option Plan was as follows:
<TABLE>
<CAPTION>
                                         Votes Cast
                    ----------------------------------------------------
                                  Against or      Broker
                        For        Withheld     Non-Votes    Abstentions
                    ----------    ----------    ---------    -----------
                    <S>            <C>          <C>               <C>
                    15,010,223     7,018,203    1,715,509         10,497
</TABLE>

    4.  The vote on the ratification of the appointment of
PricewaterhouseCoopers LLP as the independent auditors for fiscal 2005 was as
follows:
<TABLE>
<CAPTION>
                                         Votes Cast
                    ----------------------------------------------------
                                  Against or      Broker
                        For        Withheld     Non-Votes    Abstentions
                    ----------    ----------    ---------    -----------
                    <S>            <C>                  <C>        <C>
                    22,948,953     803,179              0          2,300
</TABLE>


                              - 36 -



ITEM 5.    OTHER INFORMATION

FISCAL 2005 SHAREHOLDERS' PROPOSALS AND NOMINATIONS OF BOARD MEMBERS

     As a result of the change in our fiscal year from January 31 to June 30,
our 2005 annual meeting of shareholders is scheduled to change by more than
30 days.  If a shareholder intends to present a proposal for action at the
2005 annual meeting of shareholders and wishes to have that proposal
considered for inclusion in our proxy materials in reliance on Rule 14a-8
under the Securities Exchange Act of 1934, as amended, the proposal must be
submitted in writing and received by the secretary of the Company by June 15,
2005.  The proposal must also meet the other requirements of the rules of the
Securities and Exchange Commission relating to shareholder proposals.

     Proposals and nominations should be addressed to:  Secretary, Elizabeth
Arden, Inc., 14100 N.W. 60th Avenue, Miami Lakes, Florida 33014.


                 [Remainder of Page Intentionally Left Blank]



                              - 37 -



ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

    (a)   Exhibits

<TABLE>
<CAPTION>
Exhibit
Number                                  Description
-------     ----------------------------------------------------------------
 <S>        <C>
  3.1       Amended and Restated Articles of Incorporation of the Company
            dated January 24, 2001 (incorporated herein by reference to
            Exhibit 3.1 filed as part of the Company's Form 8-K dated
            February 7, 2001 (Commission File No. 1-6370)).

  3.2       Amended and Restated By-laws of the Company.

  4.1       Indenture, dated as of January 23, 2001, among the Company, FD
            Management, Inc., DF Enterprises, Inc., FFI International, Inc.,
            Elizabeth Arden GmbH, as guarantors, and HSBC Bank USA, as trustee
            (incorporated herein by reference to Exhibit 4.1 filed as part of
            the Company's Form 8-K dated February 7, 2001 (Commission File No.
            1-6370)).

  4.2       Supplemental Indenture, dated as of January 8, 2004, among the
            Company and FD Management, Inc., DF Enterprises, Inc., Elizabeth
            Arden International Holding, Inc., and Elizabeth Arden (Zug) GmbH,
            as guarantors and HSBC Bank USA, as trustee (incorporated herein
            by reference to Exhibit 4.2 filed as part of the Company's Form
            10-K for the year ended January 31, 2004 (Commission File No.
            1-6370)).

  4.3       Indenture, dated as of January 13, 2004, among the Company and FD
            Management, Inc., DF Enterprises, Inc., Elizabeth Arden
            International Holding, Inc., RDEN Management, Inc., Elizabeth
            Arden (Financing), Inc., and Elizabeth Arden Travel Retail, Inc.,
            as guarantors, and HSBC Bank USA, as trustee (incorporated herein
            by reference to Exhibit 4.3 to the Company's Form 10-K for the
            year ended January 31, 2004 (Commission File No. 1-6370)).

  4.4       Second Amended and Restated Credit Agreement dated as of
            December 24, 2002 among the Company, JP Morgan Chase Bank, as
            administrative agent, Fleet National Bank, as collateral agent,
            and the banks listed on the signature pages thereto (incorporated
            by reference to Exhibit 4.1 filed as part of the Company's Form
            8-K dated December 30, 2002 (Commission File No. 1-6370)).

  4.5       First Amendment to Second Amended and Restated Credit Agreement
            dated as of February 25, 2004, among the Company, JP Morgan Chase
            Bank, as administrative agent, Fleet National Bank, as collateral
            agent, and the banks listed on the signature pages thereto
            (incorporated herein by reference to Exhibit 4.5 to the Company's
            Form 10-K for the year ended January 31, 2004 (Commission File No.
            1-6370)).

  4.6       Second Amendment to Second Amended and Restated Credit Agreement
            dated as of June 2, 2004, among the Company, JP Morgan Chase Bank,
            as administrative agent, Fleet National Bank, as collateral agent,
            and the banks listed on the signature pages thereto (incorporated
            herein by reference to Exhibit 4.6 to the Company's Form 10-Q for
            the quarter ended May 1, 2004 (Commission File No. 1-6370)).

  4.7       Amended and Restated Security Agreement dated as of January 29,
            2001, made by the Company and certain of its subsidiaries in favor
            of Fleet National Bank, as administrative agent (incorporated
            herein by reference to Exhibit 4.5 filed as part of the Company's
            Form 8-K dated February 7, 2001 (Commission File No. 1-6370)).

  10.1      2004 Stock Incentive Plan (incorporated herein by reference to
            Annex E filed as part of the Company's Proxy Statement on May 14,
            2004 (Commission File No. 1-6370)).

  10.2      2004 Non-Employee Director Stock Option Plan (incorporated herein
            by reference to Annex F filed as part of the Company's Proxy
            Statement on May 14, 2004 (Commission File No. 1-6370)).

  10.3      Amended 2000 Stock Incentive Plan (incorporated herein by
            reference to Exhibit 10.1 filed as part of the Company's Form 10-Q
            for the quarter ended July 26, 2003 (Commission File No. 1-6370)).

  10.4      Amended 1995 Stock Option Plan (incorporated herein by reference
            to Exhibit 4.12 filed as a part of the Company's Registration
            Statement on Form S-8 dated July 7, 1999 (Commission File No.
            1-6370)).


                              - 38 -


<CAPTION>
Exhibit
Number                                  Description
-------     ----------------------------------------------------------------
 <S>        <C>
 10.5       Amended 2002 Employee Stock Purchase Plan (incorporated herein by
            reference to Exhibit 10.4 filed as a part of the Company's Form
            10-Q for the quarter ended April 26, 2003 (Commission File No.
            1-6370)).

 10.6       Amended and Restated Deed of Lease dated as of January 17, 2003,
            between the Company and Liberty Property Limited Partnership
            (incorporated herein by referenced to Exhibit 10.5 filed as a
            part of the Company's Form 10-Q for the quarter ended April 26,
            2003 (Commission File No. 1-6370)).

 31.1       Section 302 Certification of Chief Executive Officer.

 31.2       Section 302 Certification of Chief Financial Officer.

  32        Section 906 Certifications of the Chief Executive Officer and the
            Chief Financial Officer.


</TABLE>
     The foregoing list omits instruments defining the rights of holders of
our long-term debt where the total amount of securities authorized thereunder
does not exceed 10% of our total assets.  We hereby agree to furnish a copy
of each such instrument or agreement to the Commission upon request.

     (b)  Reports on Form 8-K.

     On February 3, 2004, we filed a current report on Form 8-K dated
February  2, 2004, that furnished under Item 9, the press release announcing
(i) the filing of a new registration statement for the sale of up to $150
million of our common stock to replace the then existing and effective shelf
registration statement of which approximately $20 million of common stock
remained unsold, and (ii) the registration of the remaining common stock to
be issued upon the conversion of our Series D Convertible Preferred Stock
owned by an affiliate of Unilever as part of the new registration statement.

     On March 11, 2004, we filed a current report on Form 8-K dated March 11,
2004, that furnished under Item 12, the press release announcing the
financial results for our fourth quarter and fiscal year ended January 31,
2004 and provided net sales and diluted earnings per share guidance for
fiscal 2005.

     On March 18, 2004, we filed a current report on Form 8-K dated March 16,
2004, that furnished under Item 9, the press release announcing (i) our board
of directors' approval of the adoption of 10b5-1 trading plans in accordance
with Rule 10b5-1 of the Securities Exchange Act of 1934, that will permit
corporate insiders to establish pre-arranged plans to sell a specified number
of shares of common stock over a pre-determined period of time, and (ii) that
certain executives were implementing these plans.

     On June 3, 2004, we filed a current report on Form 8-K dated June 2,
2004, (i) that filed under Item 8 a press release announcing that our board
of directors approved a change in our fiscal year from January 31 to June 30
effective June 30, 2004, and (ii) furnished under Item 12 the press release
announcing the financial results for our first quarter ended May 1, 2004 and
which provided net sales and diluted earnings per share guidance for the
twelve months ended January 31, 2005.

     On June 16, 2004, we filed a current report on Form 8-K/A dated June 15,
2004, that filed under Item 5 a press release announcing the closing of a
public offering by certain selling shareholders and the Company of 2,549,723
shares of our common stock at $19.50 per share.

     On June 23, 2004, we filed a current report on Form 8-K dated June 22,
2004, that furnished under Item 9, the results of voting at the our annual
meeting of shareholders held on June 22, 2004.

     On June 28, 2004, we filed a current report on Form 8-K dated June 25,
2004, that disclosed under Item 9, the closing of the exchange offer of our
7 3/4% Senior Subordinated Notes due 2014  for an equal aggregate principal
amount of such notes with substantially identical terms but that were
registered under the Securities Act of 1933, as amended on June 25, 2004.


                              - 39 -



                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<CAPTION>
                                    ELIZABETH ARDEN, INC.
<S>    <C>                          <C>
Date:  August 6, 2004               /s/ E. Scott Beattie
                                    --------------------
                                    E. Scott Beattie
                                    Chairman and Chief Executive Officer
                                    (Principal Executive Officer)


Date:  August 6, 2004               /s/ Stephen J. Smith
                                    --------------------
                                    Stephen J. Smith
                                    Executive Vice President and Chief
                                     Financial Officer
                                    (Principal Financial and Accounting
                                     Officer)
</TABLE>


                              - 40 -


<TABLE>
<CAPTION>
                                 EXHIBIT INDEX

Exhibit
Number                                  Description
-------     ----------------------------------------------------------------
 <S>        <C>
  3.2       Amended and Restated By-laws of the Company.

 31.1       Section 302 Certification of Chief Executive Officer.

 31.2       Section 302 Certification of Chief Financial Officer.

  32        Section 906 Certification of the Chief Executive Officer and the
            Chief Financial Officer.
</TABLE>


                                     - 41 -