UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q





|(Mark One)                                              |                                                                                          
|------------------------------------------------------- | -----------------------------------------------------------------------------------------
|[x]                                                     | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|                                                       
|For the quarterly period ended March 31, 2008          
|                                                       
|[]                                                      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                       
|For the transition period from __________ to __________
|                                                       
|                                                       
|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 incorporation
or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|2400 S.W. 145 Avenue, Miramar, Florida                         |  | 33027                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          
|                                                               |  |                                     



|(954) 364-6900                                      
|----------------------------------------------------
|                                                    
|(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 a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. 
    Large accelerated filer  [  ]                                                                                     Accelerated filer                   [X]
    Non-accelerated filer    [  ]  (Do not check if a smaller reporting company)         Smaller reporting company  [  ]
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes  [  ]      No  [X]                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



|Class                        |  | Outstanding at
May 5, 2008
|---------------------------- |  | --------------------------
|                             |  |                           
|Common Stock, $.01 par value |  | 28,620,281                





---



ELIZABETH ARDEN, INC.



INDEX TO FORM 10-Q





|PART I        |  | FINANCIAL INFORMATION                                                                                  |  |         
|------------- |  | ------------------------------------------------------------------------------------------------------ |  | --------
|              |  |                                                                                                        |  |         
|Item 1.       |  | Financial Statements                                                                                   |  | Page No.
|              |  |                                                                                                        |  |         
|              |  | Consolidated Balance Sheets -- March 31, 2008 and June 30, 2007                                        |  | 3       
|              |  |                                                                                                        |  |         
|              |  | Consolidated Statements of Operations -- Three and nine months ended March 31, 2008 and March 31, 2007 |  | 4       
|              |  |                                                                                                        |  |         
|              |  | Consolidated Statement of Shareholders' Equity -- Nine months ended March 31, 2008                     |  | 5       
|              |  |                                                                                                        |  |         
|              |  | Consolidated Statements of Cash Flow -- Nine months ended March 31, 2008 and March 31, 2007            |  | 6       
|              |  |                                                                                                        |  |         
|              |  | Notes to Unaudited Consolidated Financial Statements                                                   |  | 7       
|              |  |                                                                                                        |  |         
|Item 2.       |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                  |  | 22      
|              |  |                                                                                                        |  |         
|Item 3.       |  | Quantitative and Qualitative Disclosures About Market Risk                                             |  | 32      
|              |  |                                                                                                        |  |         
|Item 4.       |  | Controls and Procedures                                                                                |  | 33      
|              |  |                                                                                                        |  |         
|PART II       |  | OTHER INFORMATION                                                                                      |  |         
|              |  |                                                                                                        |  |         
|Item 1.       |  | Legal Proceedings                                                                                      |  | 34      
|              |  |                                                                                                        |  |         
|Item 1A.      |  | Risk Factors                                                                                           |  | 34      
|              |  |                                                                                                        |  |         
|Item 2.       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                            |  | 34      
|              |  |                                                                                                        |  |         
|Item 6.       |  | Exhibits                                                                                               |  | 35      
|              |  |                                                                                                        |  |         
|Signatures    |  | 38                                                                                                    
|              |  |                                                                                                        |  |         
|Exhibit Index |  | 39                                                                                                    



- 2 -



---



PART I      FINANCIAL INFORMATION
ITEM 1.     FINANCIAL STATEMENTS



|ELIZABETH ARDEN, INC. AND SUBSIDIARIES                 
|-------------------------------------------------------
|CONSOLIDATED BALANCE SHEETS                            
|(Amounts in thousands, except share and per share data)





|                                                          |                                                                                                                          | As of          |                                           
|--------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | -------------- | ------------------------------------------
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          | March 31,
2008 |                                           
|                                                          |                                                                                                                          |                |                                           
|ASSETS                                                    |                                                                                                                          | (Unaudited)    |                                           
|Current Assets                                            |                                                                                                                          |                |                                           
|                                                          | Cash and cash equivalents                                                                                                |                | $                                         
|                                                          | Accounts receivable, net                                                                                                 |                |                                           
|                                                          | Inventories                                                                                                              |                |                                           
|                                                          | Deferred income taxes                                                                                                    |                |                                           
|                                                          | Prepaid expenses and other assets                                                                                        |                |                                           
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                | Total current assets                      
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           
|Property and equipment, net                               |                                                                                                                          |                | 44,566                                    
|Exclusive brand licenses, trademarks and intangibles, net |                                                                                                                          |                | 223,284                                   
|Debt financing costs, net                                 |                                                                                                                          |                | 5,190                                     
|Other assets                                              |                                                                                                                          |                | 618                                       
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                | Total assets                              
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           
|LIABILITIES AND SHAREHOLDERS' EQUITY                      |                                                                                                                          |                |                                           
|Current Liabilities                                       |                                                                                                                          |                |                                           
|                                                          | Short-term debt                                                                                                          |                | $                                         
|                                                          | Accounts payable - trade                                                                                                 |                |                                           
|                                                          | Other payables and accrued expenses                                                                                      |                |                                           
|                                                          | Current portion of long-term debt                                                                                        |                |                                           
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                | Total current liabilities                 
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           
|Long-term Liabilities                                     |                                                                                                                          |                |                                           
|                                                          | Long-term debt, net                                                                                                      |                |                                           
|                                                          | Deferred income taxes and other liabilities                                                                              |                |                                           
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                | Total long-term liabilities               
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                | Total liabilities                         
|                                                          |                                                                                                                          |                |                                           
|Commitments and Contingencies                             |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           
|Shareholders' Equity                                      |                                                                                                                          |                |                                           
|                                                          | Common stock, $.01 par value per share, 50,000,000 shares 
   authorized; 31,095,410 and 30,473,294 issued, respectively |                |                                           
|                                                          | Additional paid-in capital                                                                                               |                |                                           
|                                                          | Retained earnings                                                                                                        |                |                                           
|                                                          | Treasury stock (2,475,129 and 1,862,169 shares at cost, respectively)                                                    |                |                                           
|                                                          | Accumulated other comprehensive (loss) income                                                                            |                |                                           
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                | Total shareholders' equity                
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                | Total liabilities and shareholders' equity
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           
|                                                          |                                                                                                                          |                |                                           



The accompanying notes are an integral part of the unaudited consolidated financial statements.



- 3 -





---





|ELIZABETH ARDEN, INC. AND SUBSIDIARIES       
|---------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS        
|(Unaudited)                                  
|(Amounts in thousands, except per share data)



|                                                                                                              | Three Months Ended                  |   | Nine Months Ended
|------------------------------------------------------------------------------------------------------------- | ----------------------------------- | - | -----------------
|                                                                                                              |                                     |   |                  
|                                                                                                              | March 31, 
2008                     |   | March 31, 
2007  
|                                                                                                              |                                     |   |                  
|Net sales                                                                                                     |                                     | $ | 210,554          
|Cost of sales (excludes depreciation of $1,105, 
   $939, $3,125 and $2,649 respectively, included 
   below) |                                     |   | 119,800          
|                                                                                                              |                                     |   |                  
|Gross profit                                                                                                  |                                     |   | 90,754           
|                                                                                                              |                                     |   |                  
|Operating expenses:                                                                                           |                                     |   |                  
|                                                                                                              | Selling, general and administrative |   |                  
|                                                                                                              | Depreciation and amortization       |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              | Total operating expenses            |   |                  
|                                                                                                              |                                     |   |                  
|Income from operations                                                                                        |                                     |   | 1,452            
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|Interest expense, net                                                                                         |                                     |   | 6,067            
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|(Loss) income before income taxes                                                                             |                                     |   | (4,615           
|(Benefit from) provision for income taxes                                                                     |                                     |   | (803             
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|Net (loss) income                                                                                             |                                     | $ | (3,812           
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|Net (loss) income per common share:                                                                           |                                     |   |                  
|                                                                                                              | Basic                               |   | $                
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              | Diluted                             |   | $                
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|Weighted average number of common shares:                                                                     |                                     |   |                  
|                                                                                                              | Basic                               |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              | Diluted                             |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  
|                                                                                                              |                                     |   |                  





The accompanying notes are an integral part of the unaudited consolidated financial statements.



- 4 -



---





|ELIZABETH ARDEN, INC. AND SUBSIDIARIES        
|----------------------------------------------
|CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
|(Unaudited)                                   
|(Amounts in thousands)                        



|                                                              |                                                                        | Common Stock                                                              |        |  | Additional
Paid-in |   |     | Retained |  |   | Treasury Stock |   |  | Accumulated
Other
Comprehensive |         |        | Total
Shareholders' | 
|------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------------------------------------------------------------------- | ------ |  | ------------------ | - | --- | -------- |  | - | -------------- | - |  | ------------------------------- | ------- | ------ | ------------------- | 
|                                                              |                                                                        | Shares                                                                    |        |  | Amount             |   |     | Capital  |  |   | Earnings       |   |  | Shares                          |         |        | Amount              | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|Balance at July 1, 2007                                       |                                                                        |                                                                           | 30,473 |  |                    | $ | 305 |          |  | $ | 265,245        |   |  | $                               | 85,675  |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|Issuance of common stock upon exercise of 
   stock options   |                                                                        |                                                                           | 524    |  |                    |   | 5   |          |  |   | 6,823          |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|Issuance of common stock for employee stock 
   purchase plan |                                                                        |                                                                           | 41     |  |                    |   | --  |          |  |   | 837            |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|Issuance of restricted stock, net of forfeitures              |                                                                        |                                                                           | 57     |  |                    |   | 1   |          |  |   | (1             | ) |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|Amortization of share-based awards                            |                                                                        |                                                                           |        |  |                    |   |     |          |  |   | 5,746          |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|Repurchase of common stock                                    |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|Comprehensive income (loss):                                  |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              | Net income                                                             |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         | 30,337 |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              | Foreign currency translation adjustments                               |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              | Disclosure of reclassification amount, net of
   taxes (10% tax rate): |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        | Unrealized hedging loss arising during the 
   period                     |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        | Reclassification adjustment for 
   hedging losses included in net income |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        | Net unrealized cash flow hedging loss                                     |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              | Total comprehensive loss                                               |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         | 30,337 |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|Balance at March 31, 2008                                     |                                                                        |                                                                           | 31,095 |  |                    | $ | 311 |          |  | $ | 278,650        |   |  | $                               | 116,012 |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 
|                                                              |                                                                        |                                                                           |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |        |                     | 



The accompanying notes are an integral part of the unaudited consolidated financial statements.



- 5 -



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|ELIZABETH ARDEN, INC. AND SUBSIDIARIES
|--------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOW  
|(Unaudited)                           
|(Dollars in thousands)                



|                                                             |                                                                                           | Nine Months Ended                                   |       
|------------------------------------------------------------ | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | ------
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           | March 31,
2008                                      |       
|                                                             |                                                                                           |                                                     |       
|Operating Activities:                                        |                                                                                           |                                                     |       
|                                                             | Net income                                                                                |                                                     | $     
|                                                             | Adjustments to reconcile net  income to net cash  provided by operating 
   activities:   |                                                     |       
|                                                             | Depreciation and amortization                                                             |                                                     |       
|                                                             | Amortization of senior note offering and credit facility costs                            |                                                     |       
|                                                             | Amortization of share-based awards                                                        |                                                     |       
|                                                             | Deferred income taxes                                                                     |                                                     |       
|                                                             | Changes in assets and liabilities, net of acquisitions:                                   |                                                     |       
|                                                             | Increase in accounts receivable                                                           |                                                     |       
|                                                             | Decrease in inventories                                                                   |                                                     |       
|                                                             | Decrease (increase) in prepaid expenses and other assets                                  |                                                     |       
|                                                             | Decrease in accounts payable                                                              |                                                     |       
|                                                             | (Decrease) increase in other payables, accrued expenses and other liabilities             |                                                     |       
|                                                             | Other                                                                                     |                                                     |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           | Net cash provided by operating activities           |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       
|Investing Activities:                                        |                                                                                           |                                                     |       
|                                                             | Additions to property and equipment                                                       |                                                     |       
|                                                             | Acquisition of licenses and other assets                                                  |                                                     |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           | Net cash used in investing activities               |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       
|Financing Activities:                                        |                                                                                           |                                                     |       
|                                                             | Proceeds from short-term debt                                                             |                                                     |       
|                                                             | Payments on long-term debt                                                                |                                                     |       
|                                                             | Proceeds from the exercise of stock options                                               |                                                     |       
|                                                             | Proceeds from the issuance of new common stock under the employee stock 
   purchase plan |                                                     |       
|                                                             | Repurchase of common stock                                                                |                                                     |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           | Net cash (used in) provided by financing activities |       
|                                                             |                                                                                           |                                                     |       
|Effect of exchange rate changes on cash and cash equivalents |                                                                                           |                                                     | (526  
|                                                             |                                                                                           |                                                     |       
|Net (decrease) increase in cash and cash equivalents         |                                                                                           |                                                     | (1,895
|Cash and cash equivalents at beginning of period             |                                                                                           |                                                     | 30,287
|                                                             |                                                                                           |                                                     |       
|Cash and cash equivalents at end of period                   |                                                                                           | $                                                   | 28,392
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       
|Supplemental Disclosure of Cash Flow Information:            |                                                                                           |                                                     |       
|                                                             | Interest paid during the period                                                           |                                                     | $     
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       
|                                                             | Income taxes paid during the period                                                       |                                                     | $     
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       
|                                                             |                                                                                           |                                                     |       



The accompanying notes are an integral part of the unaudited consolidated financial statements.

- 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 global prestige beauty products company that sells fragrances, skin care and cosmetic products to retailers in the United States and approximately 90 countries internationally.



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 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 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 June 30, 2007 (the "Annual Report"), filed with the Commission.



The consolidated balance sheet of the Company as of June 30, 2007 is derived from the financial statements included in the Annual Report but does not include all disclosures required by accounting principles generally accepted in the United States.  The other consolidated financial statements presented in this quarterly report are unaudited but include all adjustments that are of a normal recurring nature that management considers necessary for the fair statement of the results for the interim periods.  Results for interim periods are not necessarily indicative of results for the full fiscal year.



To conform to the current year presentation, the consolidated statement of cash flow as of March 31, 2007 reflects a reclassification from cash and cash equivalents to accounts payable related to book overdrafts.

NOTE 2.    COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income included in the accompanying consolidated balance sheets consist of net unrealized cash-flow hedging gain (loss), net of taxes, and cumulative translation adjustments as of the end of each period.  Comprehensive income and its components are as follows:



|                                  | Three Months Ended                                             |        | Nine Months Ended
|--------------------------------- | -------------------------------------------------------------- | ------ | -----------------
|                                  |                                                                |        |                  
|                                  | March 31, 
2008                                                |        | March 31, 
2007  
|                                  |                                                                |        |                  
|Net (loss) income                 | $                                                              | (3,812 | )                
|Other comprehensive (loss) income |                                                                |        |                  
|                                  | Foreign currency translation adjustments                       |        | (1,872           
|                                  | Net unrealized cash flow hedging (loss) 
   gain, net of taxes |        | (3,971           
|                                  |                                                                |        |                  
|Comprehensive (loss) income       | $                                                              | (9,655 | )                
|                                  |                                                                |        |                  
|                                  |                                                                |        |                  
|                                  |                                                                |        |                  

NOTE 3.    INCOME (LOSS) PER SHARE



Basic income (loss) per share is computed by dividing the net income (loss) 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 and non-vested restricted stock. For the three months ended March 31, 2008, diluted loss per share equals basic loss per share, as the assumed exercise of outstanding options, non-vested restricted stock, and the assumed purchases under the employee stock purchase plan would have an anti-dilutive effect.

The following table represents the computation of net income (loss) per share:





---







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



|(Amounts in thousands, except per 
 share data) |                                                                  | Three Months Ended                  |   |        | Nine Months Ended |  
|----------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------- | - | ------ | ----------------- | -
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  | March 31,                           |   |        | March 31,         |  
|                                                |                                                                  | 2008                                |   |        | 2007              |  
|                                                |                                                                  |                                     |   |        |                   |  
|Basic                                           |                                                                  |                                     |   |        |                   |  
|                                                | Net (loss) income                                                |                                     | $ | (3,812 | )                 |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                | Weighted average shares outstanding                              |                                     |   | 27,894 |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                | Net (loss) income per basic share                                |                                     | $ | (0.14  | )                 |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|Diluted                                         |                                                                  |                                     |   |        |                   |  
|                                                | Net (loss) income                                                |                                     | $ | (3,812 | )                 |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                | Weighted average shares outstanding                              |                                     |   | 27,894 |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                | Potential common shares - treasury method                        |                                     |   | --     |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                | Weighted average shares and potential 
   dilutive common shares |                                     |   | 27,894 |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  | Net (loss) income per diluted share |   | $      | (0.14             | )
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  
|                                                |                                                                  |                                     |   |        |                   |  

The following table shows the number of shares subject to options and restricted stock awards that were outstanding for the three and nine months ended March 31, 2008 and 2007, that were not included in the diluted net income per share calculation because to do so would have been anti-dilutive:





|                 | Three Months Ended |  | Nine Months Ended
|---------------- | ------------------ |  | -----------------
|                 |                    |  |                  
|                 | March 31, 
2008    |  | March 31, 
2007  
|                 |                    |  |                  
|Number of shares |                    |  | 3,233,677        
|                 |                    |  |                  
|                 |                    |  |                  
|                 |                    |  |                  

The following table shows the options to purchase shares of Common Stock that were outstanding during the three and nine months ended March 31, 2008 and 2007, where the option exercise price was greater than the average market price of the Common Stock over the applicable period:





|                        | Three Months Ended |   | Nine Months Ended
|----------------------- | ------------------ | - | -----------------
|                        |                    |   |                  
|                        | March 31, 
2008    |   | March 31, 
2007  
|                        |                    |   |                  
|Number of shares        |                    |   | 1,148,310        
|                        |                    |   |                  
|                        |                    |   |                  
|                        |                    |   |                  
|Range of exercise price |                    | $ | 18.90-24.31      
|                        |                    |   |                  
|                        |                    |   |                  
|                        |                    |   |                  
|                        |                    |   |                  



NOTE 4.    SHARE-BASED COMPENSATION

At March 31, 2008, the Company had outstanding several share-based compensation plans.  For the three and nine months ended March 31, 2008 and 2007, the compensation cost charged against income and the tax benefit related to the compensation cost charged against income are presented below:





|(Amounts in thousands)                                   | Three Months Ended |   | Nine Months Ended
|-------------------------------------------------------- | ------------------ | - | -----------------
|                                                         |                    |   |                  
|                                                         | March 31, 
2008    |   | March 31, 
2007  
|                                                         |                    |   |                  
|Share-based compensation cost                            |                    | $ | 2,034            
|                                                         |                    |   |                  
|                                                         |                    |   |                  
|                                                         |                    |   |                  
|Tax benefit related to share-
   based compensation cost |                    | $ | 354              
|                                                         |                    |   |                  
|                                                         |                    |   |                  
|                                                         |                    |   |                  
|                                                         |                    |   |                  



- 8 -





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



As of March 31, 2008, there were approximately $8.8 million of unrecognized compensation costs related to non-vested share-based arrangements granted under the Company's share-based compensation plans.  Those costs are expected to be recognized over a weighted-average period of approximately 1.9 years.



Stock Options



On November 14, 2007, the date of the Company's most recent annual meeting, the Company granted stock options for an aggregate of 30,000 shares of Common Stock to five non-employee directors under the 2004 Non-Employee Director Stock Option Plan (the "2004 Non-Employee Director Plan") and 6,000 shares of Common Stock to an employee director under the 2004 Stock Incentive Plan.  Pursuant to the 2004 Non-Employee Director Plan, stock options are granted on the Company's annual meeting date to directors who are re-elected to the Company's board of directors (the "Board") at the annual meeting.  All of the stock options granted on November 14, 2007, are exercisable three years from the date of grant if such persons continue to serve as a director until that date. The exercise price of those stock options is $24.31 per share, which was the closing price of the Common Stock on the date of grant. The weighted-average grant-date fair value of the options granted was $8.75 per share based on the Black-Scholes option-pricing model. The options expire ten years from the date of grant.



On August 20, 2007, the Board granted stock options to 24 managerial employees for 347,150 shares of Common Stock under the 2004 Stock Incentive Plan.  The stock options are due to vest in equal thirds over a three-year period on dates that are two business days after the Company's financial results for each of the fiscal years ending June 30, 2008, 2009 and 2010, are publicly announced, but only if the person receiving the grant is still employed by the Company at the time of vesting.  The exercise price of those stock options is $23.59 per share, which was the closing price of the Common Stock on the effective date of grant.  The weighted-average grant-date fair value of the options granted was $8.76 per share based on the Black-Scholes option-pricing model.  The options expire ten years from the date of grant.



The weighted-average grant date fair value of options granted during the nine months ended March 31, 2008 was estimated on the grant date using the Black-Scholes option-pricing model with the assumptions noted in the table below. Expected volatilities are based on historical volatility of the Common Stock and other factors.  The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.  The expected life of options represents the period of time that options granted are expected to be outstanding and is derived from historical terms and other factors.



|                                  |  | Nine Months Ended
|--------------------------------- |  | -----------------
|                                  |  | March 31, 2008   
|                                  |  |                  
|Expected dividend yield           |  |                  
|Expected price volatility         |  |                  
|Risk-free interest rate           |  |                  
|Expected life of options in years |  |                  



A summary of stock option activity under the Company's share-based compensation plans for the nine months ended March 31, 2008 is presented below:





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



|Options                       |  | Common 
Stock 
Shares |   |  | Weighted
Average
Exercise
Price |       |  | Weighted
Average
Remaining
Contractual
Term |     | Aggregate
Intrinsic
Value (1)
|----------------------------- |  | --------------------- | - |  | ------------------------------- | ----- |  | ------------------------------------------- | --- | -----------------------------
|                              |  |                       |   |  |                                 |       |  |                                             |     |                              
|Outstanding at June 30, 2007  |  | 3,397,968             |   |  | $                               | 15.31 |  |                                             | 5.1 |                              
|New grants                    |  | 383,150               |   |  | $                               | 23.66 |  |                                             |     |                              
|Exercised                     |  | (523,941              | ) |  | $                               | 13.02 |  |                                             |     |                              
|Forfeited or expired          |  | (23,500               | ) |  | $                               | 18.81 |  |                                             |     |                              
|                              |  |                       |   |  |                                 |       |  |                                             |     |                              
|Outstanding at March 31, 2008 |  | 3,233,677             |   |  | $                               | 16.64 |  |                                             | 5.4 |                              
|                              |  |                       |   |  |                                 |       |  |                                             |     |                              
|                              |  |                       |   |  |                                 |       |  |                                             |     |                              
|                              |  |                       |   |  |                                 |       |  |                                             |     |                              
|Exercisable at March 31, 2008 |  | 2,460,493             |   |  | $                               | 15.25 |  |                                             | 4.4 |                              
|                              |  |                       |   |  |                                 |       |  |                                             |     |                              
|                              |  |                       |   |  |                                 |       |  |                                             |     |                              
|                              |  |                       |   |  |                                 |       |  |                                             |     |                              



|(1)  The intrinsic value of a stock option is the amount by which the current market value of the underlying Common Stock exceeds the exercise price of the option.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------

The total intrinsic value of stock options exercised during the nine months ended March 31, 2008 and 2007, based upon the average market price during the period, was approximately $1.7 million and $1.6 million, respectively.

In February 2008, the Company accepted the tender of 120,861 shares of Common Stock at a fair market value of $18.72 per share, representing a cost of approximately $2.3 million, as payment for the exercise price of stock options exercised by the Company's chief executive officer as permitted under the 1995 Stock Option Plan.  The fair market value of the tendered shares was equal to the closing price of the Common Stock on the date that the Company was given notice of the tender of shares.  The acquisition of these shares by the Company was accounted for under the treasury method.



In September 2007, the Company accepted the tender of 81,230 shares of Common Stock at a fair market value of $26.93 per share, representing a cost of approximately $2.2 million, as payment for the exercise price of stock options exercised by the Company's chief executive officer as permitted under the 1995 Stock Option Plan.  The fair market value of the tendered shares was equal to the closing price of the Common Stock on the date that the Company was given notice of the tender of shares and the tender of shares was approved by the compensation committee of the Board.  The acquisition of these shares by the Company was accounted for under the treasury method.

Restricted Common Stock

On August 20, 2007, the Board granted 68,700 shares of performance-based restricted stock to 20 managerial employees and 80,300 shares of service-based restricted stock to 28 managerial employees.  The performance-based restricted stock will vest in full on a date that is two business days after the Company's financial results for fiscal 2010 are released to the public, but only if (i) the person receiving the grant is still employed by the Company and (ii) the Company achieves its specified cumulative earnings per diluted share target.  The service-based restricted stock will vest in equal thirds over a three-year period on dates that are two business days after the Company's financial results for each of the fiscal years ending June 30, 2008, 2009 and 2010 are publicly announced, but only if the person is still employed by the Company at the time of vesting.  The fair value of the restricted stock granted was based on the closing price of the Common Stock on the date of grant.  The restricted stock is recorded as additional paid-in capital in shareholders' equity as amortization occurs over the three-year vesting period.



A summary of the Company's restricted stock activity for the nine months ended March 31, 2008, is presented below:





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



|Restricted Stock             |  | Shares   |   |  | Weighted 
Average
Grant-Date
Fair Value
|---------------------------- |  | -------- | - |  | ---------------------------------------
|                             |  |          |   |  |                                        
|Non-vested at June 30, 2007  |  | 920,921  |   |  | $                                      
|Granted                      |  | 149,000  |   |  | $                                      
|Vested                       |  | (104,170 | ) |  | $                                      
|Forfeited                    |  | (91,951  | ) |  | $                                      
|                             |  |          |   |  |                                        
|Non-vested at March 31, 2008 |  | 873,800  |   |  | $                                      
|                             |  |          |   |  |                                        
|                             |  |          |   |  |                                        
|                             |  |          |   |  |                                        

Employee Stock Purchase Plan



The Company currently has an Employee Stock Purchase Plan ("ESPP") under which employees in certain countries are permitted to deposit after tax funds from their wages for purposes of purchasing Common Stock at a 15% discount from the lower of the closing price of the Common Stock at either the start of the contribution period or the end of the contribution period.  The Company expenses the discount taken and the fair value of the "look-back" feature realized by employees upon purchases of Common Stock under the ESPP.  On November 30, 2007, 41,126 shares of Common Stock were purchased under this plan.  For the three and nine months ended March 31, 2008, the Company recorded costs associated with the ESPP of approximately $0.1 million and $0.4 million, respectively.  For the three and nine months ended March 31, 2007, the Company recorded costs associated with the ESPP of approximately $0.2 million and $0.4 million, respectively. The next purchase under the ESPP will be consummated on May 30, 2008.



NOTE 5.    NEW ACCOUNTING STANDARDS



Disclosures about Derivative Instruments and Hedging Activities



In March 2008, the Financial Accounting Standards Board ("FASB") issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities("SFAS 161").  The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.  SFAS 161 is effective for the Company in its fiscal quarter beginning January 1, 2009.  The Company is currently evaluating the impact of SFAS 161 on its consolidated financial statements.



Business Combinations



In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations ("SFAS 141R").  SFAS 141R significantly changes the accounting for business combinations in a number of areas including the treatment of contingent consideration, pre-acquisition contingencies, transaction costs, restructuring costs and income taxes.  SFAS 141R will be effective for the Company on July 1, 2009.  The Company is currently evaluating the impact of SFAS 141R on its consolidated financial statements.



Fair Value Measurements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements("SFAS 157"), which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements.  In February 2008, the FASB issued Staff Position FSP 157-2 which delayed the effective date of SFAS 157 for those nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis until fiscal years beginning after November 15, 2008.   With respect to financial assets and liabilities, SFAS 157 will be effective for the Company on July 1, 2008.  For nonfinancial assets and nonfinancial liabilities, SFAS 157 will be effective for the Company on July 1, 2009.  The Company is currently evaluating the impact of SFAS 157 on its consolidated financial statements.





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



The Fair Value Option for Financial Assets and Financial Liabilities

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159").  SFAS 159 permits entities to choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value. This option is only available for select financial instruments and is irrevocable once applied.  SFAS 159 will be effective for the Company beginning July 1, 2008.  The Company is currently evaluating the impact of SFAS 159 on its consolidated financial statements.



NOTE 6.    INVENTORIES



The components of inventory were as follows:





|(Amounts in thousands)       | March 31,
2008 |         | June 30,
2007
|---------------------------- | -------------- | ------- | -------------
|                             |                |         |              
|Raw materials and components | $              | 58,952  |              
|Work in progress             | 18,519         |         | 32,681       
|Finished goods               | 262,566        |         | 286,254      
|                             |                |         |              
|Total                        | $              | 340,037 |              
|                             |                |         |              
|                             |                |         |              
|                             |                |         |              
|                             |                |         |              



NOTE 7.    SHORT-TERM DEBT



The Company has a revolving credit facility with a syndicate of banks, for which JPMorgan Chase Bank is the administrative agent, which generally provides for borrowings on a revolving basis of up to $250 million with a $25 million sub limit for letters of credit (the "Credit Facility").  Pursuant to amendments to the Credit Facility entered into in August and November 2007, the credit facility was increased to $300 million until October 31, 2007, and to $275 million from November 1, 2007 until December 15, 2007.  After December 15, 2007, the Credit Facility provides for borrowings up to $250 million.  Under the terms of the Credit Facility the Company may, at any time, increase the size of the Credit Facility up to $300 million without entering into a formal amendment requiring the consent of all of the banks, subject to the Company's satisfaction of certain conditions.  In addition, from August 15, 2007 until October 31, 2007, the Credit Facility provided temporary additional borrowing availability of $25 million above the borrowing availability that was supported by the Company's level of eligible accounts receivable and inventory (as described below).  The Credit Facility expires in December 2012.



The Credit Facility is guaranteed by all of the Company's U.S. subsidiaries and is collateralized by a first priority lien on all of the Company's U.S., Canada and Puerto Rico accounts receivable and U.S. inventory. Except for the temporary additional borrowing availability described above, borrowings under the Credit Facility are limited to 85% of eligible accounts receivable and 85% of the appraised net liquidation value of the Company's inventory, as determined pursuant to the terms of the Credit Facility.  The Company's obligations under the Credit Facility 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 debt service coverage ratio that must be maintained at not less than 1.1 to 1 if average borrowing availability declines to less than $25 million ($35 million from December 1 through May 31).  No financial maintenance covenant was applicable as of March 31, 2008.  Under the terms of the Credit Facility, the Company may pay dividends or repurchase Common Stock if the Company maintains borrowing availability after the applicable payment of at least $25 million from June 1 to November 30, and at least $35 million from December 1 to May 31.  The Credit Facility restricts the Company from incurring additional non-trade indebtedness (other than refinancings and certain small amounts of indebtedness).





- 12 -



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



Borrowings under the 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 reference ratio for determining the Applicable Margin is a debt service coverage ratio.  The Applicable Margin charged on LIBOR loans ranges from 1.00% to 1.75% and is 0% for prime rate loans.  As of March 31, 2008, the Applicable Margin was 1.25% for LIBOR loans and 0% for prime rate loans.  The commitment fee on the unused portion of the Credit Facility is 0.25%.

As of March 31, 2008, the Company had approximately $98million in outstanding borrowings and approximately $5 million in letters of credit outstanding under the Credit Facility, compared with approximately $98 million in outstanding borrowings under the Credit Facility at June 30, 2007.  As of March 31, 2008, the Company had approximately $206million of eligible receivables and inventories available as collateral under the Credit Facility and remaining borrowing availability of approximately $103 million.  For the nine months ended March 31, 2008 and 2007, the weighted average annual interest rate on borrowings under the Company's Credit Facility was 6.6% and 7.1%, respectively.  The Company classifies the Credit Facility as short-term debt on its balance sheet because it expects to reduce outstanding borrowings over the next twelve months.



NOTE 8.    LONG-TERM DEBT



The Company's long-term debt consisted of the following:





|(Amounts in thousands)                                                                            |  | March 31,
2008 |         | June 30,
2007 |  
|------------------------------------------------------------------------------------------------- |  | -------------- | ------- | ------------- | -
|                                                                                                  |  |                |         |               |  
|7 3/4% Senior Subordinated Notes due January 2014                                                 |  | $              | 225,000 |               | $
|Termination costs on interest rate swap relating to the 
   7 3/4% Senior Subordinated Notes, net |  |                | (1,986  | )             |  
|Riviera Term Note                                                                                 |  |                | 1,938   |               |  
|                                                                                                  |  |                |         |               |  
|Total debt                                                                                        |  |                | 224,952 |               |  
|Less: Current portion of long-term debt                                                           |  |                | 1,292   |               |  
|                                                                                                  |  |                |         |               |  
|Total long-term debt                                                                              |  | $              | 223,660 |               | $
|                                                                                                  |  |                |         |               |  
|                                                                                                  |  |                |         |               |  
|                                                                                                  |  |                |         |               |  



NOTE 9.    COMMITMENTS AND CONTINGENCIES



At March 31, 2008, the Company had contractual obligations 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 $52.6 million through 2011, compared with$60.3 million through 2011 at June 30, 2007.



In October 2005, the Company received a demand from a licensee of certain of the Company's patents alleging the Company had breached the license agreement, indicating that it would not pay any further royalties and requesting that the Company return approximately $3 million in royalty payments already made.  In November 2006, the Company filed a lawsuit against the licensee seeking recovery of its damages for breach of contract.  In April 2007, the licensee filed a counterclaim for breach of contract, negligence, unjust enrichment and other related counts, and also sought declaratory relief that it was not obligated to make further royalty payments and was entitled to recover approximately $3 million in royalty payments already made plus interest.



In April 2008, the Company settled its litigation with the licensee.  Under the terms of the settlement, the licensee agreed to pay the Company $540,000 in royalties in installments through June 2010, and the Company agreed to provide the licensee with a fully-paid license to use one of the Company's patents for the duration of the patent.





- 13 -



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



The Company is a party to a number of other legal actions, proceedings and claims.  While any action, proceeding or claim contains an element of uncertainty and it is possible that the Company's cash flows and results of operations in a particular quarter or year could be materially affected by the impact of such actions, proceedings and claims, 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 ongoing business, financial position or results of operations.



In June 2006, the Company acquired certain assets of Riviera Concepts Inc. ("Riviera"), including inventory, accounts receivable and certain brand licenses (the "Riviera Acquisition").  In connection with the Riviera Acquisition, the Company entered into a contingent performance liability to Riviera in the amount of $8.6 million.  This contingent performance liability does not bear interest, is recorded in "other liabilities" on the Company's Consolidated Balance Sheet and is payable in annual installments beginning July 31, 2007 and ending on July 31, 2009, provided that certain net sales targets are achieved on the licensed brands acquired in the Riviera Acquisition over the three year period after the closing date.  If the targets for the first or second annual installments are not satisfied, such installments may still be payable, based on cumulative targets, in the subsequent year or years, as the case may be.  The target for the first installment due on July 31, 2007, was not achieved.  The contingent performance liability was recorded as a result of the negative goodwill resulting from this acquisition.



In August 2006, the Company acquired the fragrance business of Sovereign Sales, LLC ("Sovereign").  The assets acquired included inventory and certain intangible assets.  In addition, the Company assumed a portion of the lease payments on Sovereign's distribution facility and entered into a short-term services agreement.  The net purchase price consisted of (i) approximately $90.2 million in cash, consisting primarily of $87.7 million paid in cash at closing and approximately $2.5 million in cash paid in five installments after the closing; and (ii) $12.0 million in the form of contingent consideration, substantially all of which may be paid in two installments over two years from the date of closing if certain financial targets and other conditions are satisfied.  At June 30, 2007, the conditions for the first installment were satisfied, and the Company recognized a liability of $6.3 million in the consolidated balance sheet.  The first installment was paid in September 2007.  Based on financial results for the six months ended December 31, 2007, the conditions for the second installment have been satisfied.  Accordingly, the Company recognized a liability of $5.3 million in the consolidated balance sheet at December 31, 2007.  The payment of the second installment of contingent consideration is expected to be made in September 2008.



As of March 31, 2008, the Company had notional amounts of 78.8 million Euros and 44.8 million Britishpounds under foreign currency contracts that expire between April 30, 2008 and June 30, 2009 to reduce the exposure of its foreign subsidiary revenues to fluctuations in currency rates.  As of March 31, 2008, the Company had notional amounts of 11.5 million Canadian dollars under foreign currency contracts that expire between April 30, 2008 and June 30, 2009 to reduce the exposure of the Company's Canadian subsidiary's cost of sales to fluctuations in currency rates.  The Company has designated each qualifying foreign currency contract as a cash flow hedge.  The gains and losses of these contracts will only be recognized in earnings in the period in which the contracts expire.  The realized loss, net of taxes, recognized during the three and nine months ended March 31, 2008, was approximately $2.5 million and $5.7 million, and the realized loss, net of taxes, recognized during the three and nine months ended March 31, 2007, was approximately $0.8and$1.3million.  At March 31, 2008, the unrealized loss, net of taxes, associated with these contracts of approximately $12.1 million, is included in accumulated other comprehensive income (loss).



When appropriate, the Company also enters into and settles foreign currency contracts for Euros, British pounds and Canadian dollars to reduce exposure of the Company's foreign subsidiaries' net balance sheets to fluctuations in foreign currency rates.  As of March 31, 2008, there were no such foreign currency contracts outstanding.  The realized loss, net of taxes, recognized from contracts in place during the three and nine months ended March 31, 2008, was approximately $1.1 million and $2.6 million, respectively. The realized loss, net of taxes, recognized from contracts in place during the three and nine months ended March 31, 2007 was approximately$0.1 million and $0.6 million, respectively.





- 14 -





---



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



NOTE 10.    REPURCHASE OF COMMON STOCK



On November 2, 2005, the Board authorized the Company to implement a stock repurchase program to repurchase up to $40.0 million of Common Stock through March 31, 2007.  On November 2, 2006, the Board authorized the repurchase of an additional $40.0 million of Common Stock under the terms of the Company's existing stock repurchase program and extended the term of the stock repurchase program from March 31, 2007 to November 30, 2008.  As of March 31, 2008, the Company had repurchased under the stock repurchase program 2,273,038 shares of Common Stock on the open market, at an average price of $18.18 per share, at a cost of approximately $41.4 million, including sales commissions.  For the nine months ended March 31, 2008, the Company repurchased 410,869 shares of Common Stock at an average price of $18.11 per share on the open market under the stock repurchase program at a cost of $7.5 million, including sales commissions. For the three months ended March 31, 2008, the Company repurchased 390,669 shares of Common Stock at an average price of $17.98 per share on the open market under the stock repurchase program at a cost of $7.0 million, including sales commissions. The acquisition of these shares by the Company was accounted for under the treasury method.



NOTE 11.    INCOME TAXES



In June 2006, the FASB issued Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109 ("FIN 48"), which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 requires that the Company recognize in its consolidated financial statements the impact of a tax position if it is more likely than not that such position will be sustained on audit based on its technical merits.  The provisions of FIN 48 also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, and disclosure.  Effective July 1, 2007, the Company adopted FIN 48.



Prior to July 1, 2007, the Company recognized income tax accruals with respect to uncertain tax positions based upon Statement of Financial Accounting Standards No. 5, Accounting for Contingencies ("SFAS 5").  Under SFAS 5, the Company recorded a liability associated with an uncertain tax position if the liability was both probable and estimable.



The adoption of FIN 48 resulted in no change to the opening balance of the Company's retained earnings.  The Company's balance of unrecognized tax benefits at July 1, 2007 was $5.3 million, and during the nine months ended March 31, 2008, an additional $1.0 million of unrecognized tax benefits were recorded for positions taken during such period.  These unrecognized tax benefits could favorably affect the effective tax rate in a future period, if and to the extent recognized.  In addition, as a result of the adoption of FIN 48, $2.8 million relating to the Company's uncertain tax positions were reclassified from income taxes payable to deferred taxes.



The Company and its domestic subsidiaries file income tax returns with federal, state and local tax authorities within the United States.  The Company also files tax returns for its international affiliates in various foreign jurisdictions.  The statute of limitations for the Company's U.S. federal tax return years remains open for the fiscal year ended January 31, 2004 and subsequent fiscal years.  The Internal Revenue Service recently completed its examination of the Company's federal income tax return for the fiscal year ended June 30, 2005 with no changes.  The fiscal year ended January 31, 2003 and subsequent fiscal years remain subject to examination for various state tax jurisdictions.  In addition, the Company has subsidiaries in various foreign jurisdictions that have statutes of limitations generally ranging from one to ten years.  The fiscal year ended January 31, 2002 and subsequent fiscal years remain subject to examination for various foreign jurisdictions.





- 15 -



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



The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and related penalties in the provision for income taxes in the Consolidated Statements of Operations, which is consistent with the recognition of these items in prior reporting periods.  The Company recorded no significant penalties or interest for the three and nine months ended March 31, 2008, as a result of the Company's net operating loss carryforwards.



The Company does not expect changes in the amount of unrecognized tax benefits to have a significant impact on its results of operations over the next 12 months.



NOTE 12.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION



The following condensed financial statements as of March 31, 2008 and June 30, 2007, and for the three and nine months ended March 31, 2008 and 2007, show the consolidated financial statements of the Company, and, in separate financial statements, the financial statements of those subsidiaries that are guarantors of the 7 3/4% Senior Subordinated Notes, plus, in each case, the financial statements of non-guarantor entities, elimination adjustments and the consolidated total.  The Company'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., are guarantors of the 7 3/4% Senior Subordinated Notes.  Equity income of the guarantor subsidiaries is included in other expense (income), net.  All subsidiaries listed in this note are wholly-owned subsidiaries of the Company and their guarantees are joint and several, full and unconditional.  All information presented is in thousands.



- 16 -



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



|Balance Sheet                                                 |                                             | As of March 31, 2008                      
|------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------
|                                                              |                                             |                                           
|                                                              |                                             | Company                                   
|                                                              |                                             |                                           
|ASSETS                                                        |                                             |                                           
|Current Assets                                                |                                             |                                           
|                                                              | Cash and cash equivalents                   |                                           
|                                                              | Accounts receivable, net                    |                                           
|                                                              | Inventories                                 |                                           
|                                                              | Intercompany receivable                     |                                           
|                                                              | Deferred income taxes                       |                                           
|                                                              | Prepaid expenses and other assets           |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total current assets                      
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|Property and equipment, net                                   |                                             |                                           
|Investment in subsidiaries                                    |                                             |                                           
|Exclusive brand licenses, trademarks 
   and intangibles, net |                                             |                                           
|Debt financing costs, net                                     |                                             |                                           
|Other assets                                                  |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total assets                              
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|LIABILITIES AND SHAREHOLDERS' 
   EQUITY                      |                                             |                                           
|Current Liabilities                                           |                                             |                                           
|                                                              | Short-term debt                             |                                           
|                                                              | Accounts payable - trade                    |                                           
|                                                              | Intercompany payable                        |                                           
|                                                              | Other payables and accrued expenses         |                                           
|                                                              | Current portion of long-term debt           |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total current liabilities                 
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              | Long-term debt, net                         |                                           
|                                                              | Deferred income taxes and other liabilities |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total liabilities                         
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|Shareholders' Equity                                          |                                             |                                           
|                                                              | Common stock                                |                                           
|                                                              | Additional paid-in capital                  |                                           
|                                                              | Retained earnings (accumulated deficit)     |                                           
|                                                              | Treasury stock                              |                                           
|                                                              | Accumulated other comprehensive loss        |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total shareholders' equity                
|                                                              |                                             |                                           
|                                                              |                                             | Total liabilities and shareholders' equity
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             |                                           



- 17 -





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



|Balance Sheet                                                 |                                             | As of June 30, 2007                       
|------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------
|                                                              |                                             |                                           
|                                                              |                                             | Company                                   
|                                                              |                                             |                                           
|ASSETS                                                        |                                             |                                           
|Current Assets                                                |                                             |                                           
|                                                              | Cash and cash equivalents                   |                                           
|                                                              | Accounts receivable, net                    |                                           
|                                                              | Inventories                                 |                                           
|                                                              | Intercompany receivable                     |                                           
|                                                              | Deferred income taxes                       |                                           
|                                                              | Prepaid expenses and other assets           |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total current assets                      
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|Property and equipment, net                                   |                                             |                                           
|Investment in subsidiaries                                    |                                             |                                           
|Exclusive brand licenses, trademarks 
   and intangibles, net |                                             |                                           
|Debt financing costs, net                                     |                                             |                                           
|Other assets                                                  |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total assets                              
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|LIABILITIES AND SHAREHOLDERS' 
   EQUITY                      |                                             |                                           
|Current Liabilities                                           |                                             |                                           
|                                                              | Short-term debt                             |                                           
|                                                              | Accounts payable - trade                    |                                           
|                                                              | Intercompany payable                        |                                           
|                                                              | Other payables and accrued expenses         |                                           
|                                                              | Current portion of long-term debt           |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total current liabilities                 
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              | Long-term debt, net                         |                                           
|                                                              | Deferred income taxes and other liabilities |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total liabilities                         
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|Shareholders' Equity                                          |                                             |                                           
|                                                              | Common stock                                |                                           
|                                                              | Additional paid-in capital                  |                                           
|                                                              | Retained earnings (accumulated deficit)     |                                           
|                                                              | Treasury stock                              |                                           
|                                                              | Accumulated other comprehensive income      |                                           
|                                                              |                                             |                                           
|                                                              |                                             | Total shareholders' equity                
|                                                              |                                             |                                           
|                                                              |                                             | Total liabilities and shareholders' equity
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             |                                           



- 18 -



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



|Statement of Operations                   | Three Months Ended March 31, 2008
|----------------------------------------- | ---------------------------------
|                                          |                                  
|                                          |                                  
|                                          |                                  
|Net sales                                 |                                  
|Cost of sales                             |                                  
|                                          |                                  
|Gross profit                              |                                  
|                                          |                                  
|Selling, general and administrative costs |                                  
|Depreciation and amortization             |                                  
|                                          |                                  
|(Loss) income from operations             |                                  
|Other expense (income):                   |                                  
|                                          | Interest expense (income)        
|                                          | Other                            
|                                          |                                  
|(Loss) income before income taxes         |                                  
|(Benefit from) provision for income taxes |                                  
|                                          |                                  
|Net (loss) income                         |                                  
|                                          |                                  
|                                          |                                  
|                                          |                                  





|Statement of Operations                   | Nine Months Ended March 31, 2008
|----------------------------------------- | --------------------------------
|                                          |                                 
|                                          |                                 
|                                          |                                 
|Net sales                                 |                                 
|Cost of sales                             |                                 
|                                          |                                 
|Gross profit                              |                                 
|                                          |                                 
|Selling, general and administrative costs |                                 
|Depreciation and amortization             |                                 
|                                          |                                 
|Income from operations                    |                                 
|Other expense (income):                   |                                 
|                                          | Interest expense (income)       
|                                          | Other                           
|                                          |                                 
|Income before income taxes                |                                 
|Provision for income taxes                |                                 
|                                          |                                 
|Net income                                |                                 
|                                          |                                 
|                                          |                                 
|                                          |                                 



- 19 -



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



|Statement of Operations                   | Three Months Ended March 31, 2007
|----------------------------------------- | ---------------------------------
|                                          |                                  
|                                          |                                  
|                                          |                                  
|Net sales                                 |                                  
|Cost of sales                             |                                  
|                                          |                                  
|Gross profit                              |                                  
|                                          |                                  
|Selling, general and administrative costs |                                  
|Depreciation and amortization             |                                  
|                                          |                                  
|Income from operations                    |                                  
|Other expense (income):                   |                                  
|                                          | Interest expense (income)        
|                                          | Other                            
|                                          |                                  
|Income (loss) before income taxes         |                                  
|(Benefit from) provision for income taxes |                                  
|                                          |                                  
|Net income (loss)                         |                                  
|                                          |                                  
|                                          |                                  
|                                          |                                  





|Statement of Operations                   | Nine Months Ended March 31, 2007
|----------------------------------------- | --------------------------------
|                                          |                                 
|                                          |                                 
|                                          |                                 
|Net sales                                 |                                 
|Cost of sales                             |                                 
|                                          |                                 
|Gross profit                              |                                 
|                                          |                                 
|Selling, general and administrative costs |                                 
|Depreciation and amortization             |                                 
|                                          |                                 
|Income from operations                    |                                 
|Other expense (income):                   |                                 
|                                          | Interest expense (income)       
|                                          | Other                           
|                                          |                                 
|Income before income taxes                |                                 
|Provision for income taxes                |                                 
|                                          |                                 
|Net income                                |                                 
|                                          |                                 
|                                          |                                 
|                                          |                                 



- 20 -



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

|Statement of Cash Flows                                      |                                                                                       | Nine Months Ended March 31, 2008 |        
|------------------------------------------------------------ | ------------------------------------------------------------------------------------- | -------------------------------- | -------
|                                                             |                                                                                       |                                  |        
|                                                             |                                                                                       | Company                          |        
|                                                             |                                                                                       |                                  |        
|Operating activities:                                        |                                                                                       |                                  |        
|Net cash (used in) provided by operating activities          |                                                                                       | $                                | (2,058 
|                                                             |                                                                                       |                                  |        
|                                                             |                                                                                       |                                  |        
|Investing activities:                                        |                                                                                       |                                  |        
|                                                             | Additions to property and equipment                                                   |                                  |        
|                                                             | Acquisition of licenses and other assets                                              |                                  |        
|                                                             |                                                                                       |                                  |        
|Net cash used in investing activities                        |                                                                                       |                                  | (18,803
|                                                             |                                                                                       |                                  |        
|                                                             |                                                                                       |                                  |        
|Financing activities:                                        |                                                                                       |                                  |        
|                                                             | Proceeds from short-term debt                                                         |                                  |        
|                                                             | Payments on long-term debt                                                            |                                  |        
|                                                             | Proceeds from the exercise of stock options                                           |                                  |        
|                                                             | Proceeds from the issuance of common stock under the 
   employee stock purchase plan |                                  |        
|                                                             | Repurchase of common stock                                                            |                                  |        
|                                                             | Net change in intercompany obligations                                                |                                  |        
|                                                             |                                                                                       |                                  |        
|Net cash provided by (used in) financing activities          |                                                                                       |                                  | 15,495 
|                                                             |                                                                                       |                                  |        
|Effect of exchange rate changes on cash and cash equivalents |                                                                                       |                                  | (526   
|Net (decrease) increase in cash and cash equivalents         |                                                                                       |                                  | (5,892 
|Cash and cash equivalents at beginning of period             |                                                                                       |                                  | 7,278  
|                                                             |                                                                                       |                                  |        
|Cash and cash equivalents at end of period                   |                                                                                       | $                                | 1,386  
|                                                             |                                                                                       |                                  |        
|                                                             |                                                                                       |                                  |        
|                                                             |                                                                                       |                                  |        



|Statement of Cash Flows                                      |                                                                              | Nine Months Ended March 31, 2007 |        
|------------------------------------------------------------ | ---------------------------------------------------------------------------- | -------------------------------- | -------
|                                                             |                                                                              |                                  |        
|                                                             |                                                                              | Company                          |        
|                                                             |                                                                              |                                  |        
|Operating activities:                                        |                                                                              |                                  |        
|Net cash provided by operating activities                    |                                                                              | $                                | 15,354 
|                                                             |                                                                              |                                  |        
|                                                             |                                                                              |                                  |        
|Investing activities:                                        |                                                                              |                                  |        
|                                                             | Additions to property and equipment                                          |                                  |        
|                                                             | Acquisitions                                                                 |                                  |        
|                                                             |                                                                              |                                  |        
|Net cash used in investing activities                        |                                                                              |                                  | (98,997
|                                                             |                                                                              |                                  |        
|                                                             |                                                                              |                                  |        
|Financing activities:                                        |                                                                              |                                  |        
|                                                             | Proceeds from short-term debt                                                |                                  |        
|                                                             | Payments on long-term debt                                                   |                                  |        
|                                                             | Proceeds from the exercise of stock options                                  |                                  |        
|                                                             | Proceeds from issuance of common stock under theemployee stock purchase plan |                                  |        
|                                                             | Repurchase of common stock                                                   |                                  |        
|                                                             | Net change in intercompany obligations                                       |                                  |        
|                                                             |                                                                              |                                  |        
|Net cash provided by (used in) financing activities          |                                                                              |                                  | 82,273 
|                                                             |                                                                              |                                  |        
|Effect of exchange rate changes on cash and cash equivalents |                                                                              |                                  | 273    
|Net (decrease) increase in cash and cash equivalents         |                                                                              |                                  | (1,097 
|Cash and cash equivalents at beginning of period             |                                                                              |                                  | 4,931  
|                                                             |                                                                              |                                  |        
|Cash and cash equivalents at end of period                   |                                                                              | $                                | 3,834  
|                                                             |                                                                              |                                  |        
|                                                             |                                                                              |                                  |        
|                                                             |                                                                              |                                  |        





- 21 -



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



This discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and related notes contained in this quarterly report and the Consolidated Financial Statements and related notes and the 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 June 30, 2007.  The results of operations for an interim period may not give a true indication of results for the year.  In the following discussion, all comparisons are with the corresponding items in the prior year period.



Overview



We are a global prestige beauty products company.  We sell fragrance, skin care and color cosmetic products in the United States primarily to department stores and mass retailers, as well as internationally in prestige department stores, perfumeries, boutiques and travel retail locations. We have established ourselves as a source of over 400 fragrance, skin care and cosmetic brands through brand ownership, brand licensing and distribution arrangements.  In addition to approximately 100 prestige brands that we own or license, we also distribute over 300 additional prestige fragrance brands manufactured by other beauty companies principally to mass retailers in the United States.  Our portfolio of owned and licensed fragrance brands includes the Elizabeth Arden fragrance brands: Red Door, Elizabeth Arden 5th Avenue, Elizabeth Arden Provocative Woman,Elizabeth Arden green tea,andElizabeth Arden Mediterranean; the Elizabeth Taylor fragrance brands:  White Diamondsand Elizabeth Taylor's Passion; the Britney Spears fragrance brands:curious Britney Spears,fantasy Britney Spears and Britney Spears believe; the Mariah Carey fragrance M by Mariah Carey; the Hilary Duff fragrance with Love...Hilary Duff;the Danielle Steel fragrance Danielle by Danielle Steel;the fragrance brands White Shoulders, Giorgio and Giorgio Red;the men's fragrances Daytona 500, HUMMER®Fragrance for Men, and PS Fine Cologne for Men; and the designer fragrance brands of Alfred Sung, Badgley Mischka, Bob Mackie, GANT, Lulu Guinness, Nanette Lepore, Geoffrey Beeneand Halston.  Our skin care brands includeCeramide, Intervene, Eight Hour Creamand PREVAGE®, and our cosmetic products include the Elizabeth Arden brand lipstick, foundation and color cosmetic products.



Our business strategy to increase net sales, operating margins and earnings is based on (a) growing the sales of our existing brand portfolio through new product launches and increased advertising and marketing activities, (b) acquiring control of additional prestige brands through licensing opportunities and acquisitions, (c) expanding the offering of prestige fragrance products that we distribute on behalf of other beauty companies to mass retail customers, (d) implementing initiatives to improve our cost structure and working capital efficiencies, and (e) expanding our presence in established international markets such as Europe and Travel Retail, and developing our presence in emerging markets.



We manage our business by evaluating net sales, EBITDA and working capital utilization (including monitoring our levels of inventory, accounts receivable and operating cash flow). We encounter a variety of challenges that may affect our business and should be considered as described in Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended June 30, 2007 and in the section of this quarterly report captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Cautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results."



In fiscal 2008, our key focus has been on improving our operating margins, cash flow from operations and return on invested capital.  We are accelerating a variety of initiatives relating to our extended supply chain and logistics functions and implementing a new enterprise information system that we believe will provide improved operating and financial performance.  We have begun to implement a restructuring plan that we currently expect to complete over the next 18 to 24 months in connection with these initiatives.  The restructuring and one-time expenses associated with these initiatives consist of severance, relocation, recruiting and temporary staffing expenditures, and are expected to be approximately $12.0 million to $14.0 million before taxes, of which $1.1 million is expected to be recorded in the fourth quarter of fiscal 2008.







- 22 -



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Seasonality



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 fiscal year ended June 30, 2007, approximately 59% of our net sales were made during those months.  Due to the size and timing of certain orders from our customers and new product launches, 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, operating margin, net income, working capital requirements and cash flows on a quarterly basis.  Increased sales of skin care and cosmetic products relative to fragrances may reduce the seasonality of our business.



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

Critical Accounting Policies and Estimates



As disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2007, the discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles.  The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in those financial statements.  We base our estimates on historical experience and other factors that we believe are most likely to occur.  Changes in facts and circumstances may result in revised estimates, which are recorded in the period in which they become known.  Our most critical accounting policies relate to revenue recognition, provisions for inventory obsolescence, allowances for sales returns, markdowns and doubtful accounts, intangible and long-lived assets, income taxes, hedging contracts and share-based compensation.  Since June 30, 2007, other than the adoption of Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109 (FIN 48), as described below, there have been no significant changes to the assumptions and estimates related to those critical accounting policies.



Income Taxes.   Prior to July 1, 2007, we recognized income tax accruals with respect to uncertain tax positions based upon Statement of Financial Accounting Standards No. 5, Accounting for Contingencies (SFAS 5).  Under SFAS 5, we recorded a liability associated with an uncertain tax position if the liability was both probable and estimable.



In June 2006, the Financial Accounting Standards Board ("FASB") issued FIN 48, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 requires that we recognize in our consolidated financial statements, the impact of a tax position if it is more likely than not that such position will be sustained on audit based on its technical merits.  The provisions of FIN 48 also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, and disclosure.  Effective July 1, 2007, we adopted FIN 48.  The adoption of FIN 48 resulted in no change to the opening balance of our retained earnings.  While we believe that our assessments of whether our tax positions are more likely than not to be sustained are reasonable, each assessment is subjective and requires the use of significant judgments.  As a result, one or more of such assessments may prove ultimately to be incorrect, which could result in a change to net income.



- 23 -





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Results of Operations

The following discussion compares the historical results of operations for the three and nine months ended March 31, 2008 and March 31, 2007.  Results of operations as a percentage of net sales were as follows (dollar amounts in thousands, percentages may not add due to rounding):





|                                                |                                   | Three Months Ended |         | Nine Months Ended
|----------------------------------------------- | --------------------------------- | ------------------ | ------- | -----------------
|                                                |                                   |                    |         |                  
|                                                |                                   | March 31, 
2008    |         | March 31, 
2007  
|                                                |                                   |                    |         |                  
|Net sales                                       |                                   | $                  | 210,554 |                  
|Cost of sales                                   |                                   |                    | 119,800 |                  
|                                                | Gross profit                      |                    |         | 90,754           
|Selling, general and administrative 
  expenses |                                   |                    | 83,004  |                  
|Depreciation and amortization                   |                                   |                    | 6,298   |                  
|                                                | Income from operations            |                    |         | 1,452            
|Interest expense, net                           |                                   |                    | 6,067   |                  
|                                                | (Loss) income before income taxes |                    |         | (4,615           
|(Benefit from) provision for income 
  taxes    |                                   |                    | (803    | )                
|                                                | Net (loss) income                 |                    |         | (3,812           
|                                                |                                   |                    |         |                  
|Other data                                      |                                   |                    |         |                  
|EBITDA and EBITDA margin (1)                    |                                   | $                  | 7,750   |                  





|(1)  For a definition of EBITDA and a reconciliation of net income to EBITDA, see "EBITDA" under Results of Operations -- Three  Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007 and Nine Months Ended March 31, 2008 Compared to Nine Months Ended March 31, 2007.  EBITDA margin represents EBITDA divided by net sales.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007



*Net Sales*.    Net sales decreased 4.0%, or approximately $8.7 million, for the three months ended March 31, 2008, compared to the three months ended March 31, 2007.   The decline in net sales was due to higher sales allowances given primarily in our European and U.S. mass markets to increase sales of certain older brands and in response to a weakening retail environment.  Net sales of fragrances declined approximately $6.9 million, primarily to customers in European markets and to U.S. mass customers while, net sales of Elizabeth Arden skin care and color products declined approximately $1.8 million primarily within our U.S. department store customers.  Excluding the favorable impact of foreign currency translation, net sales decreased 5.9%**.**



Gross Profit.    Gross profit decreased by 7.8% for the three months ended March 31, 2008, compared to the three months ended March 31, 2007, primarily due to the lower sales and gross margin.  Gross margin decreased to 43.1% for the three months ended March 31, 2008, compared to 44.9% for the three months ended March 31, 2007 due primarily to higher sales allowances.



SG&A.    Selling, general and administrative expenses increased 1.1%, or approximately $0.9 million, for the three months ended March 31, 2008, compared to the three months ended March 31, 2007.  The increase is primarily due to (i) higher marketing and sales overhead expenses of $1.8 million primarily related to our European operations, e-commerce activities and our Fifth Avenue store in New York City, (ii) restructuring expenses of $1.0 million and (iii) professional fees of $1.0 million related to our extended supply chain and logistics reengineering initiatives. These increases include a portion of the aggregate unfavorable effect of foreign currency translation of approximately $2.8 million. The increase was partially offset by lower employee incentive costs of approximately $4.9 million.



- 24 -



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Depreciation and Amortization.    Depreciation and amortization increased by 4.2% for the three months ended March 31, 2008, compared to the three months ended March 31, 2007.  The increase is primarily due to higher depreciation costs of $0.7 million resulting from increased investments in property plant and equipment in recent years, partially offset by reduced amortization of $0.5 million related to certain intangible assets that were fully amortized during fiscal 2007.



Interest Expense.    Interest expense, net of interest income, decreased by 7.4% for the three months ended March 31, 2008, compared to the three months ended March 31, 2007.  The decrease is primarily a result of lower interest rates under our credit facility.



(Benefit from) Provision for Income Taxes.    A benefit from income taxes of approximately $0.8 million was recorded for the three months ended March 31, 2008, compared to a provision for income taxes of approximately $0.6 million for the three months ended March 31, 2007, primarily due to lower income from operations.  The effective tax rate for the three months ended March 31, 2008 and 2007 was 17.4% and 16.8%, respectively.  The income tax benefit for the three months ended March 31, 2008, reflects an adjustment to the estimated annual effective tax rate for changes in earnings contributions from our worldwide affiliates.  The income tax provision for the three months ended March 31, 2007, reflects an adjustment to the estimated annual effective tax rate for changes in earnings contributions from our worldwide affiliates, as well as a benefit from research and development tax credits attributable to prior year, recorded on a discrete basis.  Our worldwide affiliates generally have lower tax rates than our U.S. operations.  Based on current estimated earnings contributions from our worldwide affiliates, our expected annualized effective tax rate for the year ending June 30, 2008 is 25.8%.



Net (Loss) Income.    Net loss for the three months ended March 31, 2008 was approximately $3.8 million compared to a net income of approximately $3.2 million for the three months ended March 31, 2007.  The decrease in earnings was driven by lower net sales and gross profit.



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 $8.6 million to $7.8 million for the three months ended March 31, 2008, compared to $16.4 million for the three months ended March 31, 2007. The decrease in EBITDA was driven by lower net sales and gross profit.



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 or 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, or non-operating factors such as historical cost.  Accordingly, as a result of our capital structure, 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.

In addition, EBITDA has limitations as an analytical tool, including the fact that:





| | it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;                                                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                    
| | it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;                                                                                     
|  |                                                                                                                                                                                                                                    
| | it does not reflect any cash income taxes that we may be required to pay; and                                                                                                                                                      
|  |                                                                                                                                                                                                                                    
| | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and these measures do not reflect any cash requirements for such replacements.

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





|(Amounts in thousands) | Three Months Ended                        |       
|---------------------- | ----------------------------------------- | ------
|                       |                                           |       
|                       | March 31,
2008                            |       
|                       |                                           |       
|Net (loss) income      | $                                         | (3,812
|Plus:                  |                                           |       
|                       | (Benefit from) provision for income taxes |       
|                       | Interest expense, net                     |       
|                       | Depreciation and amortization             |       
|                       |                                           |       
|                       |                                           | EBITDA
|                       |                                           |       
|                       |                                           |       
|                       |                                           |       

Nine Months Ended March 31, 2008 Compared to Nine Months Ended March 31, 2007



Net Sales.    Net sales increased 2.3%, or approximately $20.0 million, for the nine months ended March 31, 2008, compared to the nine months ended March 31, 2007.  Fragrance sales increased approximately $11.5 million due to the launch of M by Mariah Careyand sales of the Giorgio brands resulting from the license agreement signed in December 2006, partially offset by the decline in sales, primarily in the U.S., of certain celebrity fragrances and distributed fragrance brands. Sales of Elizabeth Arden branded skin care products increased approximately $11.0 million, primarily in international markets.  Net sales were adversely affected by higher sales allowances given primarily in our European and U.S. mass markets to increase sales of certain older brands and in response to a weakening retail environment.  Excluding the favorable impact of foreign currency translation, net sales decreased 0.1%.



Gross Profit.    Gross profit increased by 5.7% for the nine months ended March 31, 2008, compared to the nine months ended March 31, 2007, primarily due to the higher sales and gross margin.  Gross margin was 41.6% for the nine months ended March 31, 2008, compared to 40.2% for the nine months ended March 31, 2007 due to a higher proportion of our net sales coming from owned and licensed brands, which traditionally operate at higher gross margins than our distributed fragrance brands, partially offset by higher sales allowances.



SG&A.    Selling, general and administrative expenses increased 6.2%, or approximately $17.1 million, for the nine months ended March 31, 2008, compared to the nine months ended March 31, 2007.  The increase was principally due to higher advertising, promotional and royalty costs of $12.0 million mainly related to new product launches, higher marketing and sales overhead costs of $6.5 million mainly related to our European operations, e-commerce activities and our Fifth Avenue store in New York City and higher employee salary costs of $2.6 million.  These amounts include a portion of the aggregate unfavorable effect of foreign currency translation of approximately $8.8 million.  The increase was partially offset by lower employee incentive costs of $7.2 million.  We also incurred costs related to our extended supply chain and logistics reengineering initiatives, which mostly offset prior period transition costs related to the acquisition of certain assets of Riviera Concepts, Inc. and the acquisition of the fragrance business of Sovereign Sales, LLC.



Depreciation and Amortization.    Depreciation and amortization decreased by 1.5% for the nine months ended March 31, 2008, compared to the nine months ended March 31, 2007.  The decrease is primarily a result of reduced amortization of $1.6 million related to certain intangible assets that were fully amortized during fiscal 2007 mostly offset by higher depreciation costs of $1.4 million resulting from increased investments in property plant and equipment in recent years.



Interest Expense.    Interest expense, net of interest income decreased by 2.8% for the nine months ended March 31, 2008, compared to the nine months ended March 31, 2007.  The decrease is primarily a result of lower interest rates under our credit facility.

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Provision for Income Taxes.     A provision for income taxes of approximately $10.5 million was recorded for the nine months ended March 31, 2008, compared to approximately $9.1 million for the nine months ended March 31, 2007, primarily due to higher income from operations.  The effective tax rate for the nine months ended March 31, 2008 and 2007 was 25.8% and 24.7%, respectively.   The change in our effective tax rate is primarily due to changes in earnings from worldwide affiliates.  Our worldwide affiliates generally have lower tax rates than our U.S. operations.



Net Income.    Net income increased by 9.5% to approximately $30.3 million for the nine months ended March 31, 2008, as compared to approximately $27.7 million for the nine months ended March 31, 2007.  The increase in net income was driven by higher net sales and gross profit, partially offset by higher selling, general and administrative expenses.



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) increased by $3.2 million to $81.2 million for the nine months ended March 31, 2008, compared to $78.0 million for the nine months ended March 31, 2007. The increase in EBITDA was driven by higher net sales and gross profit, partially offset by higher selling, general and administrative expenses.



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





|(Amounts in thousands) | Nine Months Ended             |       
|---------------------- | ----------------------------- | ------
|                       |                               |       
|                       | March 31,
2008                |       
|                       |                               |       
|Net income             | $                             | 30,337
|Plus:                  |                               |       
|                       | Provision for income taxes    |       
|                       | Interest expense, net         |       
|                       | Depreciation and amortization |       
|                       |                               |       
|                       |                               | EBITDA
|                       |                               |       
|                       |                               |       
|                       |                               |       



Financial Condition



|(Amounts in thousands)                               | Nine Months Ended |        
|---------------------------------------------------- | ----------------- | -------
|                                                     |                   |        
|                                                     | March 31,
2008    |        
|                                                     |                   |        
|Net cash provided by operating activities            | $                 | 25,861 
|Net cash used in investing activities                |                   | (21,939
|Net cash (used in) provided by financing activities  |                   | (5,291 
|Net (decrease) increase in cash and cash equivalents |                   | (1,895 



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Cash Flows.     For the nine months ended March 31, 2008, net cash provided by operating activities was approximately $25.9 million, as compared to approximately $41.3 million for the nine months ended March 31, 2007.  This decrease in cash provided by operating activities is primarily due to the prior year acquisition of the fragrance business of Sovereign Sales in which we acquired $68 million of inventory and which was reflected as an investing activity in our consolidated statement of cash flows, as required by generally accepted accounting principles (GAAP).  If the inventory had been acquired in the ordinary course of our business, it would have resulted in a net use of cash from operating activities of $26.7 million for the prior year period ($41.3 million of cash provided by operating activities in the prior period less $68 million of inventory acquired and reported as an investing activity).  The Company believes this additional information provides investors a more comparable measure to evaluate our operating cash flow performance for the nine months ended March 31, 2008 as compared to the prior year period.



Also, contributing to the decrease in cash provided by operating activities during the current period was a $60.2 million reduction in accounts payable reflecting increased payments to suppliers, partially offset by inventory reductions of $40.2 million due to our supply chain initiatives and the prior year increase in inventory levels that resulted from the Sovereign acquisition.



For the nine months ended March 31, 2008, net cash used in investing activities was approximately $21.9 million, as compared to approximately $105.4 million for the nine months ended March 31, 2007.  The decrease in net cash used in investing activities is primarily a result of approximately $91.5 million in cash paid in connection with the Sovereign acquisition in August 2006.  Cash used in investing activities for the nine months ended March 31, 2008, also includes $6.3 million paid to settle the first installment of contingent consideration associated with the Sovereign acquisition, and $15.5 million related to capital expenditures, primarily for computer hardware and software, tools and molds, in-store counters, and leasehold improvements.



For the nine months ended March 31, 2008, net cash used in financing activities was approximately $5.3 million, as compared to net cash provided by financing activities of approximately $68.5 million for the nine months ended March 31, 2007.  The decrease in net cash provided by financing activities was primarily due to additional borrowings under our credit facility during the nine months ended March 31, 2007, used to fund a portion of the purchase price for the Sovereign acquisition.  During the nine months ended March 31, 2008, we repurchased approximately $7.4 million of our common stock.



Interest paid during the nine months ended March 31, 2008, included $17.4 million of interest payments on the 7 3/4% senior subordinated notes due 2014 and $8.3 million of interest paid on the borrowings under our credit facility.  Interest paid during the nine months ended March 31, 2007 included $17.4million of interest payments on the 7 3/4% senior subordinated notes and $8.3 million paid on the borrowings under our credit facility.



Future Liquidity and Capital Needs.    Our principal future uses of funds are for working capital requirements, including brand development and marketing expenses, new product launches, additional brand acquisitions or product distribution arrangements, capital expenditures and debt service.  In addition, we may use funds to repurchase our common stock and senior subordinated notes.  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 credit facility with a syndicate of banks, for which JPMorgan Chase Bank is the administrative agent, which generally provides for borrowings on a revolving basis of up to $250 million with a $25 million sub-limit for letters of credit. Under the terms of the credit facility we may, at any time, increase the size of the credit facility up to $300 million without entering into a formal amendment requiring the consent of all of the banks, subject to our satisfaction of certain conditions.  The credit facility expires in December 2012.



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The credit facility is guaranteed by all of our U.S. subsidiaries and is collateralized by a first priority lien on all of our U.S., Canada and Puerto Rico accounts receivable and U.S. inventory. Borrowings under the credit facility are limited to 85% of eligible accounts receivable and 85% of the appraised net liquidation value of our inventory, as determined pursuant to the terms of the credit facility.  Our obligations under the credit facility rank senior to our 7 3/4% senior subordinated notes due 2014.



The credit facility has only one financial maintenance covenant, which is a debt service coverage ratio that must be maintained at not less than 1.1 to 1 if average borrowing availability declines to less than $25 million ($35 million from December 1 through May 31).  No financial maintenance covenant was applicable as of March 31, 2008.  Under the terms of the credit facility, we may pay dividends or repurchase common stock if we maintain borrowing availability after the applicable payment of at least $25 million from June 1 to November 30, and at least $35 million from December 1 to May 31.  The credit facility restricts us from incurring additional non-trade indebtedness (other than refinancings and certain small amounts of indebtedness).



Borrowings under the 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 our option, the Applicable Margin may be applied to either the London Interbank Offered Rate (LIBOR) or the prime rate.  The reference ratio for determining the Applicable Margin is a debt service coverage ratio.  The Applicable Margin charged on LIBOR loans ranges from 1.00% to 1.75% and is 0% for prime rate loans.  As of March 31, 2008, the Applicable Margin was 1.25% for LIBOR loans and 0% for prime rate loans.  The commitment fee on the unused portion of the credit facility is 0.25%.  For the nine months ended March 31, 2008 and 2007, the weighted average annual interest rate on borrowings under the Credit Facility was 6.6% and 7.1%, respectively.



As of March 31, 2008, we had approximately $98million in outstanding borrowings and approximately $5 million in letters of credit outstanding under the credit facility, approximately $206 million of eligible receivables and inventories available as collateral under the credit facility, and remaining borrowing availability of approximately $103 million.



As of March 31, 2008, we had outstanding $225 million aggregate principal amount of 7 3/4% senior subordinated notes.  The 7 3/4% senior subordinated notes are guaranteed by our U.S. subsidiaries. See Note 12 to Notes to Unaudited Consolidated Financial Statements.  The indentures pursuant to which the 7 3/4% senior subordinated notes were issued provide that such notes will be our senior subordinated obligations.  The 7 3/4% senior subordinated notes rank junior to all of our existing and future senior indebtedness, including indebtedness under the credit facility, and pari passu in right of payment to all of our senior subordinated indebtedness.  Interest on the 7 3/4% senior subordinated notes is payable semi-annually on February 15 and August 15 of each year.  The indentures generally permit us (subject to the satisfaction of a fixed charge coverage ratio and, in certain cases, also a net income test) to incur additional indebtedness, pay dividends, purchase or redeem our common stock or redeem subordinated indebtedness.  The indentures generally limit our ability to create liens, merge or transfer or sell assets.  The indentures also provide that the holders of the 7 3/4% senior subordinated notes have the option to require us to repurchase their notes in the event of a change of control involving us (as defined in the indentures).



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, new product launches or distribution arrangements.

Repurchases of Common Stock.    On November 2, 2005, our board of directors authorized us to implement a stock repurchase program to repurchase up to $40.0 million of our common stock through March 31, 2008.  On November 2, 2006, our board of directors authorized the repurchase of an additional $40.0 million of our common stock under the terms of our existing stock repurchase program and extended the term of the stock repurchase program from March 31, 2007 to November 30, 2008.  As of March 31, 2008, we had repurchased under the stock repurchase program 2,273,038shares of common stock on the open market, at an average price of $18.18 per share, at a cost of approximately $41.4 million, including sales commissions.  For the nine months ended March 31, 2008, we repurchased 410,869 shares of common stock at an average price of $18.11 per share on the open market under the stock repurchase program at a cost of $7.5 million, including sales commissions.  For the three months ended March 31, 2008, we repurchased 390,669 shares of common stock at an average price of $17.98 per share on the open market under the stock repurchase program at a cost of $7.0 million, including sales commissions.  Our acquisition of these shares was accounted for under the treasury method.

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Contractual Obligations.    At March 31, 2008, we had contractual obligations 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 $52.6 million through 2011, compared with $60.3 million through 2011 at June 30, 2007.



New Accounting Standards



Disclosures about Derivative Instruments and Hedging Activities



In March 2008, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities(SFAS 161). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.  SFAS 161 is effective for us in our fiscal quarter beginning January 1, 2009.  We are currently evaluating the impact of SFAS 161 on our consolidated financial statements.



Business Combinations



In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations (SFAS 141R).  SFAS 141R significantly changes the accounting for business combinations in a number of areas including the treatment of contingent consideration, pre-acquisition contingencies, transaction costs, restructuring costs and income taxes.  SFAS 141R will be effective for us on July 1, 2009.  We are currently evaluating the impact of SFAS 141R on our consolidated financial statements.



Fair Value Measurements



In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements.  In February 2008, the FASB issued Staff Position FSP 157-2 which delayed the effective date of SFAS 157 for those nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis until fiscal years beginning after November 15, 2008.  With respect to financial assets and liabilities, SFAS 157 will be effective for us on July 1, 2008.  For nonfinancial assets and nonfinancial liabilities, SFAS 157 will be effective for us on July 1, 2009.  We are currently evaluating the impact of SFAS 157 on our consolidated financial statements.

The Fair Value Option for Financial Assets and Financial Liabilities

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159).  SFAS 159 permits entities to choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value.  This option is only available for select financial instruments and is irrevocable once applied.  SFAS 159 will be effective for us beginning July 1, 2008.  We are currently evaluating the impact of SFAS 159 on our consolidated financial statements.

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Cautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results



The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management's plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance.  In particular, these include statements relating to future actions, prospective products, future performance or results of current and anticipated products and/or initiatives, sales efforts, expenses, interest rates, foreign exchange rates, the outcome of contingencies, such as legal proceedings, and financial results. A list of factors that could cause our actual results of operations and financial condition to differ materially is set forth below, and these factors are discussed in greater detail under Item 1A -- "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended June 30, 2007:



| | factors affecting our relationships with our customers or our customers' businesses, including the absence of contracts with customers, our customers' financial condition, and changes in the retail, fragrance and cosmetic industries, such as the consolidation of retailers and the associated closing of retail doors as well as retailer inventory control practices, including but not limited to levels of inventory carried at point of sale and practices used to control inventory shrinkage;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | our reliance on third-party manufacturers for substantially all of our owned and licensed products and our absence of contracts with suppliers;                                                                                                                                                                                                                                                                                                                                                          
| | delays in shipments, inventory shortages and higher costs of production due to the loss of or disruption in our distribution facilities or at key third party manufacturing or fulfillment facilities that manufacture or provide logistic services for our products;                                                                                                                                                                                                                                    
| | our ability to respond in a timely manner to changing consumer preferences and purchasing patterns and other international and domestic conditions and events that impact retailer and/or consumer confidence and demand, such as economic downturns;                                                                                                                                                                                                                                                    
| | our ability to protect our intellectual property rights;                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | the success, or changes in the timing or scope, of our new product launches, advertising and merchandising programs;                                                                                                                                                                                                                                                                                                                                                                                     
| | the quality, safety and efficacy of our products;                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | the impact of competitive products and pricing;                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | risks of international operations, including foreign currency fluctuations, hedging activities, economic and political consequences of terrorist attacks, and political instability in certain regions of the world;                                                                                                                                                                                                                                                                                     
| | our ability to implement our growth strategy and acquire or license additional brands or secure additional distribution arrangements, to successfully and cost-effectively integrate acquired businesses or new brands, and to finance our growth strategy and our working capital requirements;                                                                                                                                                                                                         
| | our level of indebtedness, debt service obligations and restrictive covenants in our revolving credit facility and the indenture for our 7 3/4% senior subordinated notes;                                                                                                                                                                                                                                                                                                                               
| | changes in product mix to less profitable products;                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | the retention and availability of key personnel;                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 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 or critical accounting estimates;                                                                                                                                                                                                                                                                                        
| | the success of, and costs associated with, our restructuring plan; and                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | other unanticipated risks and uncertainties.                                                                                                                                                                                                                                                                                                                                                                                                                                                             

We caution that the factors described herein and other factors could cause our actual results of operations and financial condition 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.





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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

As of March 31, 2008, we had approximately $98 million in borrowings outstanding under our revolving credit facility.  Borrowings under our revolving credit facility are seasonal, with peak borrowings typically 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.  Based upon our average borrowings under our revolving credit facility during the three and nine months ended March 31, 2008, and assuming there had been a two percentage point change in the average interest rate for these borrowings, it is estimated that our interest expense for the three and nine months ended March 31, 2008 would have increased or decreased by approximately $0.6 million and $2.5 million, respectively.  See Note 7 to the Notes to Unaudited Consolidated Financial Statements.

Foreign Currency Risk



We sell our products in approximately 90 countries around the world.  During the three and nine months ended March 31, 2008, we derived approximately 46.1% and 39.2%, 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 various currencies including the Euro, British pound, Swiss franc, Canadian dollar and Australian dollar, as well as the U.S. dollar. Most of our skin care and cosmetic products are produced in a third-party manufacturing facility located in Roanoke, Virginia. 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, cost of goods sold and expenses are typically 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. 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 (loss) income" in our consolidated balance sheets.



As of March 31, 2008, we had notional amounts of 78.8 million Euros and 44.8 million British pounds under foreign currency contracts that expire between April 30, 2008 and June 30, 2009 to reduce the exposure of our foreign subsidiary revenues to fluctuations in currency rates.  As of March 31, 2008, we had notional amounts of 11.5 million Canadian dollars under foreign currency contracts that expire between April 30, 2008 and June 30, 2009 to reduce the exposure of our Canadian subsidiary's cost of sales to fluctuations in currency rates.  We have designated each qualifying foreign currency contract as a cash flow hedge.  The gains and losses of these contracts will only be recognized in earnings in the period in which the contracts expire.  The realized loss, net of taxes, recognized during the three and nine months ended March 31, 2008, was approximately $2.5 million and $5.7 million.  At March 31, 2008, the unrealized loss, net of taxes associated with these contracts of approximately $12.1 million, is included in accumulated other comprehensive income (loss).



When appropriate, we also enter into and settle foreign currency contracts for Euros, British pounds and Canadian dollars to reduce the exposure of our foreign subsidiaries' net balance sheets to fluctuations in foreign currency rates.  As of March 31, 2008, there were no such foreign currency contracts outstanding.  The realized loss, net of taxes, recognized during the three and nine months ended March 31, 2008 was approximately $1.1 million and $2.6 million, respectively.



We do not utilize foreign exchange contracts for trading or speculative purposes.  There can be no assurance that our hedging operations or other exchange rate practices, if any, will eliminate or substantially reduce risks associated with fluctuating exchange rates.





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ITEM 4.    CONTROLS AND PROCEDURES

The Company's Chairman, President and Chief Executive Officer, and the 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 quarterly report (the "Evaluation Date").  Based upon such evaluation, they have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are effective.



There have been no changes in the Company's internal control over financial reporting during the fiscal quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.





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PART II.   OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

In October 2005, we received a demand from Mystic Tan, Inc., a licensee of certain of our patents, alleging that we had breached the license agreement, indicating that it would not pay any further royalties and requesting that we return approximately $3 million in royalty payments already made by them.  In November 2006, we filed a lawsuit against the Mystic Tan in the U.S. District Court for the Southern District of New York seeking recovery of our damages for breach of contract.  In April 2007, Mystic Tan filed a counterclaim for breach of contract, negligence, unjust enrichment and other related counts, and also sought declaratory relief that it was not obligated to make further royalty payments and was entitled to recover approximately $3 million in royalty payments already made plus interest.



In April 2008, we settled our litigation with Mystic Tan.  Under the terms of the settlement, Mystic Tan agreed to pay us $540,000 in royalties in installments through June 2010, and we agreed to provide Mystic Tan with a fully-paid license to use one of the Company's patents for the duration of the patent.



We are a party to a number of other legal actions, proceedings and claims.  While any action, proceeding or claim contains an element of uncertainty and it is possible that our cash flows and results of operations in a particular quarter or year could be materially affected by the impact of such actions, proceedings and claims, our management believes that the outcome of such actions, proceedings or claims will not have a material adverse effect on our business, financial position or results of operations.

ITEM 1A.    RISK FACTORS







ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS







Issuer Purchases of Equity Securities



|                                            |  | (a)                              |     | (b)                          |       | (c)                                                                                  |         | (d)                                                                                |  
|------------------------------------------- |  | -------------------------------- | --- | ---------------------------- | ----- | ------------------------------------------------------------------------------------ | ------- | ---------------------------------------------------------------------------------- | -
|                                            |  |                                  |     |                              |       |                                                                                      |         |                                                                                    |  
|Period                                      |  | Total Number
of Shares
Purchased |     | Average
Price Paid
Per Share |       | Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs (1) |         | Approximate
Dollar Value
that May Yet
Be Purchased
Under the
Plans or
Programs (2) |  
|                                            |  |                                  |     |                              |       |                                                                                      |         |                                                                                    |  
|January 1, 2008 through 
January 31, 2008   |  | --                               |     |                              | --    |                                                                                      | --      |                                                                                    | $
|                                            |  |                                  |     |                              |       |                                                                                      |         |                                                                                    |  
|February 1, 2008 through 
February 29, 2008 |  | 439,852                          | (3) | $                            | 18.19 | (3)                                                                                  | 318,991 |                                                                                    | $
|                                            |  |                                  |     |                              |       |                                                                                      |         |                                                                                    |  
|March 1, 2008 through 
March 31, 2008       |  | 71,678                           |     | $                            | 17.93 |                                                                                      | 71,678  |                                                                                    | $
|                                            |  |                                  |     |                              |       |                                                                                      |         |                                                                                    |  
|Totals                                      |  | 511,530                          | (3) | $                            | 18.16 | (3)                                                                                  | 390,669 |                                                                                    | $
|                                            |  |                                  |     |                              |       |                                                                                      |         |                                                                                    |  
|                                            |  |                                  |     |                              |       |                                                                                      |         |                                                                                    |  
|                                            |  |                                  |     |                              |       |                                                                                      |         |                                                                                    |  





|(1)   On November 2, 2005, our board of directors authorized us to implement a stock repurchase program to repurchase up to $40 million of our common stock through December 31, 2007.  The stock repurchase program was announced on November 3, 2005.  On November 2, 2006, our board of directors authorized the repurchase of an additional $40 million of our common stock under the terms of our existing stock repurchase program and extended the term of the stock repurchase program from March 31, 2007 to November 30, 2008.  The extension of the stock repurchase program was announced on November 3, 2006.
     (2)   Amounts reflect the remaining dollar value of shares that may be purchased under the stock repurchase program described above.
     (3)   Includes 120,861 shares tendered to us at a price of $18.72 per share to pay the exercise price of certain stock options exercised by our chief executive officer during February 2008.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ITEM 6.    EXHIBITS

|Exhibit
Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3.1            |  | Amended and Restated Articles of Incorporation of the Company dated November 17, 2005 (incorporated herein by reference to Exhibit 3.1 filed as part of the Company's Form 10-Q for the quarter ended December 31, 2005 (Commission File No. 1-6370)).                                                                                                                                                                                                                
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3.2            |  | Amended and Restated By-laws of the Company (incorporated herein by reference to Exhibit 3.2 filed as part of the Company's Form 10-Q for the transition period from February 1, 2004 to June 30, 2004 (Commission File No. 1-6370)).                                                                                                                                                                                                                                 
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.1            |  | 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., 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)).                      
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.1           |  | Second Amended and Restated Credit Agreement dated as of December 24, 2002 among the Company, JPMorgan 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 4.1 filed as part of the Company's Form 8-K dated December 30, 2002 (Commission File No. 1-6370)).                                                                             
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.2           |  | 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 4.6 filed as part of the Company's Form 10-Q for the quarter ended May 1, 2004 (Commission File No. 1-6370)).                                             
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.3           |  | 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)).                                                               
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.4           |  | Third Amendment to Second Amended and Restated Credit Agreement dated as of September 30, 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 4.1 filed as part of the Company's Form 8-K dated October 1, 2004 (Commission File No. 1-6370)).                                                         
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.5           |  | Fourth Amendment to Second Amended and Restated Credit Agreement dated as of November 2, 2005, among the Company, JP Morgan Chase Bank, as administrative agent, Bank of America, N. A. (formerly Fleet National Bank), as the collateral agent, and the banks listed on the signature pages thereto (incorporated herein by reference to Exhibit 4.8 filed as part of the Company's Form 10-Q for the quarter ended September 30, 2005 (Commission File No. 1-6370)).
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.6           |  | Fifth Amendment to Second Amended and Restated Credit Agreement dated as of August 11, 2006, among the Company, JP Morgan Chase Bank, as administrative agent, Bank of America, N. A. (formerly Fleet National Bank), as the collateral agent, and the banks listed on the signature pages thereto (incorporated herein by reference to Exhibit 4.7 filed as part of the Company's Form 10-K for the year ended June 30, 2006 (Commission File No.1-6370)).           
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.7           |  | Sixth Amendment to Second Amended and Restated Credit Agreement dated as of August 15, 2007, among the Company, JP Morgan Chase Bank, as administrative agent, Bank of America, N. A. (formerly Fleet National Bank), as the collateral agent, and the banks listed on the signature pages thereto (incorporated herein by reference to Exhibit 10.7 filed as part of the Company's Form 10-K for the year ended June 30, 2007 (Commission File No. 1-6370)).         



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|Exhibit
Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.8           |  | Seventh Amendment to Second Amended and Restated Credit Agreement dated as of November 13, 2007, among the Company, JP Morgan Chase Bank, as administrative agent, Bank of America, N. A. (formerly Fleet National Bank), as the collateral agent, and the banks listed on the signature pages thereto (incorporated herein by reference to Exhibit 10.8 filed as part of the Company's Form 10-Q for the quarter ended December 31, 2007 (Commission File No. 1-6370)).
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.9           |  | 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)).                                                                                                                                       
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.10          |  | 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)).                                                                                                                                                                         
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.11          |  | Asset Purchase Agreement dated August 11, 2006 between the Company and Sovereign Sales, LLC (incorporated herein by reference to Exhibit 10.22 filed as part of the Company's Form 10-K for the year ended June 30, 2006 (Commission File No. 1-6370)).                                                                                                                                                                                                                 
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.12 +        |  | 2004 Stock Incentive Plan, as amended and restated (incorporated herein by reference to Exhibit 10.12 filed as part of the Company's Form 10-Q for the quarter ended December 31, 2007 (Commission File No. 1-6370)).                                                                                                                                                                                                                                                   
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.13 +        |  | 2004 Non-Employee Director Stock Option Plan, as amended (incorporated herein by reference to Exhibit 10.2 filed as part of the Company's Form 10-Q for the quarter ended September 30, 2006 (Commission File No. 1-6370)).                                                                                                                                                                                                                                             
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.14 +        |  | 2000 Stock Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.14 filed as part of the Company's Form 10-Q for the quarter ended December 31, 2007 (Commission File No. 1-6370)).                                                                                                                                                                                                                                                                
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.15 +        |  | 1995 Stock Option Plan, as amended (incorporated herein by reference to Exhibit 10.4 filed as part of the Company's Form 10-Q for the quarter ended September 30, 2006 (Commission File No. 1-6370)).                                                                                                                                                                                                                                                                   
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.16 +        |  | Amended 2002 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.5 filed as part of the Company's Form 10-K for the year ended June 30, 2006 (Commission File No. 1-6370)).                                                                                                                                                                                                                                                                    
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.17 +        |  | Non-Employee Director Stock Option Plan, as amended (incorporated herein by reference to Exhibit 10.6 filed as part of the Company's Form 10-Q for the quarter ended September 30, 2006 (Commission File No. 1-6370)).                                                                                                                                                                                                                                                  
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.18 +        |  | Form of Nonqualified Stock Option Agreement for stock option awards under the Company's Non-Employee Director Stock Option Plan (incorporated herein by reference to Exhibit 10.8 filed as a part of the Company's Form 10-Q for the quarter ended March 31, 2005 (Commission File No. 1-6370)).                                                                                                                                                                        
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.19 +        |  | Form of Incentive Stock Option Agreement for stock option awards under the Company's 1995 Stock Option Plan (incorporated herein by reference to Exhibit 10.9 filed as a part of the Company's Form 10-Q for the quarter ended March 31, 2005 (Commission File No. 1-6370)).                                                                                                                                                                                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.20 +        |  | Form of Nonqualified Stock Option Agreement for stock option awards under the Company's 1995 Stock Option Plan (incorporated herein by reference to Exhibit 10.10 filed as a part of the Company's Form 10-Q for the quarter ended March 31, 2005 (Commission File No. 1-6370)).                                                                                                                                                                                        
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.21 +        |  | Form of Stock Option Agreement for stock option awards under the Company's 2000 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.11 filed as a part of the Company's Form 10-Q for the quarter ended March 31, 2005 (Commission File No. 1-6370)).                                                                                                                                                                                                  



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|Exhibit
Number |  | Description                                                                                                                                                                                                                                                                                                       
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.22 +        |  | Form of Restricted Stock Agreement for service-based restricted stock awards (one-year vesting) under the Company's 2000 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.12 filed as a part of the Company's Form 10-Q for the quarter ended March 31, 2005 (Commission File No. 1-6370)).   
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.23 +        |  | Form of Restricted Stock Agreement for the performance-based restricted stock awards under the Company's 2000 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.13 filed as a part of the Company's Form 10-Q for the quarter ended March 31, 2005 (Commission File No. 1-6370)).              
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.24 +        |  | Form of Stock Option Agreement for stock option awards under the Company's 2004 Non-Employee Director Stock Option Plan (incorporated herein by reference to Exhibit 10.14 filed as a part of the Company's Form 10-Q for the quarter ended March 31, 2005 (Commission File No. 1-6370)).                         
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.25 +        |  | Form of Restricted Stock Agreement for the market-based restricted stock awards under the Company's 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.15 filed as a part of the Company's Form   10-Q for the quarter ended March 31, 2005 (Commission File No. 1-6370)).                 
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.26 +        |  | Form of Stock Option Agreement for stock option awards under the Company's 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.19 filed as a part of the Company's Form 10-K for the year ended June 30, 2005 (Commission File No. 1-6370)).                                                
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.27 +        |  | Form of Restricted Stock Agreement for the restricted stock awards under the Company's 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.20 filed as a part of the Company's Form 10-K for the year ended June 30, 2005 (Commission File No. 1-6370)).                                    
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.28 +        |  | 2005 Management Bonus Plan, as amended (incorporated herein by reference to Exhibit 10.28 filed as part of the Company's Form 10-Q for the quarter ended December 31, 2007 (Commission File No. 1-6370)).                                                                                                         
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.29 +        |  | 2005 Performance Bonus Plan, as amended (incorporated herein by reference to Exhibit 10.29 filed as part of the Company's Form 10-Q for the quarter ended December 31, 2007 (Commission File No. 1-6370)).                                                                                                        
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.30 +        |  | Compensation Arrangements for Named Executive Officers (incorporated herein by reference to Exhibit 10.29 filed as a part of the Company's Form 10-K for the year ended June 30, 2007 (Commission File No. 1-6370)).                                                                                              
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.31 +        |  | Board of Directors Compensation Arrangements (incorporated herein by reference to Exhibit 10.17 filed as a part of the Company's Form 10-K for the year ended June 30, 2006 (Commission File No. 1-6370)).                                                                                                        
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.32 +        |  | Elizabeth Arden, Inc. Severance Policy (incorporated herein by reference to Exhibit 10.31 filed as part of the Company's Form 10-K for the year ended June 30, 2007 (Commission File No. 1-6370)).                                                                                                                
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.33 +        |  | Form of Restricted Stock Agreement for service-based restricted stock awards (three-year vesting period) under the Company's 2000 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.32 filed as part of the Company's Form 10-K for the year ended June 30, 2007 (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.                                                                                                                                                                                                                        



+

* Filed herewith.





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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.

|                   |  | ELIZABETH ARDEN, INC.                               
|------------------ |  | ----------------------------------------------------
|                   |  |                                                     
|Date:  May 9, 2008 |  | /s/ E. Scott Beattie                                
|                   |  |                                                     
|                   |  | E. Scott Beattie                                    
|                   |  | Chairman, President and Chief Executive Officer     
|                   |  | (Principal Executive Officer)                       
|                   |  |                                                     
|Date:  May 9, 2008 |  | /s/ Stephen J. Smith                                
|                   |  |                                                     
|                   |  | Stephen J. Smith                                    
|                   |  | Executive Vice President and Chief Financial Officer
|                   |  | (Principal Financial and Accounting Officer)        
|                   |  |                                                     





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EXHIBIT INDEX



|Exhibit 
Number |  | Description                                                                               
|--------------- |  | ------------------------------------------------------------------------------------------
|                |  |                                                                                           
|                |  |                                                                                           
|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.





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