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 September 30, 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, 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
November 4, 2008
|-------------------------------------- |  | -------------------------------
|                                       |  |                                
|Common Stock, $.01 par value per share |  | 28,816,854                     





---



ELIZABETH ARDEN, INC.



INDEX TO FORM 10-Q



|PART I        |  | FINANCIAL INFORMATION                                                                                 |  |         
|------------- |  | ----------------------------------------------------------------------------------------------------- |  | --------
|              |  |                                                                                                       |  |         
|Item 1.       |  | Financial Statements                                                                                  |  | Page No.
|              |  |                                                                                                       |  |         
|              |  | Consolidated Balance Sheets -- September 30, 2008 and June 30, 2008                                   |  | 3       
|              |  |                                                                                                       |  |         
|              |  | Consolidated Statements of Operations -- Three months ended September 30, 2008 and September 30, 2007 |  | 4       
|              |  |                                                                                                       |  |         
|              |  | Consolidated Statement of Shareholders' Equity -- Three months ended September 30, 2008               |  | 5       
|              |  |                                                                                                       |  |         
|              |  | Consolidated Statements of Cash Flow -- Three months ended September 30, 2008 and September 30, 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                                            |  | 33      
|              |  |                                                                                                       |  |         
|Item 4.       |  | Controls and Procedures                                                                               |  | 34      
|              |  |                                                                                                       |  |         
|PART II       |  | OTHER INFORMATION                                                                                     |  |         
|              |  |                                                                                                       |  |         
|Item 1A.      |  | Risk Factors                                                                                          |  | 35      
|              |  |                                                                                                       |  |         
|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              |                                           
|--------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ------------------ | ------------------------------------------
|                                                          |                                                                                                                         |                    |                                           
|                                                          |                                                                                                                         | September 30,
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                               |                                                                                                                         |                    | 50,714                                    
|Exclusive brand licenses, trademarks and intangibles, net |                                                                                                                         |                    | 220,785                                   
|Debt financing costs, net                                 |                                                                                                                         |                    | 5,539                                     
|Other assets                                              |                                                                                                                         |                    | 598                                       
|                                                          |                                                                                                                         |                    |                                           
|                                                          |                                                                                                                         |                    |                                           
|                                                          |                                                                                                                         |                    | 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; 31,291,983and 31,157,057 issued, respectively |                    |                                           
|                                                          | Additional paid-in capital                                                                                              |                    |                                           
|                                                          | Retained earnings                                                                                                       |                    |                                           
|                                                          | Treasury stock (2,475,129 shares at cost)                                                                               |                    |                                           
|                                                          | Accumulated other comprehensive income (loss)                                                                           |                    |                                           
|                                                          |                                                                                                                         |                    |                                           
|                                                          |                                                                                                                         |                    | 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
|------------------------------------------------------------------------------------------ | ----------------------------------- | ------------------
|                                                                                           |                                     |                   
|                                                                                           |                                     | September 30, 2008
|                                                                                           |                                     |                   
|Net sales                                                                                  |                                     | $                 
|Cost of sales (excludes depreciation of $1,111 and $960, 
   respectively, included below) |                                     |                   
|                                                                                           |                                     |                   
|Gross profit                                                                               |                                     |                   
|                                                                                           |                                     |                   
|Operating expenses:                                                                        |                                     |                   
|                                                                                           | Selling, general and administrative |                   
|                                                                                           | Depreciation and amortization       |                   
|                                                                                           |                                     |                   
|                                                                                           | Total operating expenses            |                   
|                                                                                           |                                     |                   
|(Loss) income from operations                                                              |                                     |                   
|                                                                                           |                                     |                   
|                                                                                           |                                     |                   
|Interest expense, net                                                                      |                                     |                   
|                                                                                           |                                     |                   
|                                                                                           |                                     |                   
|(Loss) income before income taxes                                                          |                                     |                   
|(Benefit from) provision for income taxes                                                  |                                     |                   
|                                                                                           |                                     |                   
|Net (loss) income                                                                          |                                     | $                 
|                                                                                           |                                     |                   
|                                                                                           |                                     |                   
|                                                                                           |                                     |                   
|                                                                                           |                                     |                   
|                                                                                           |                                     |                   
|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 -



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|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, 2008                                     |                                                                       |                                                                        | 31,157 |  |                    | $ | 312 |          |  | $ | 280,973        |   |  | $                               | 105,576 |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|Issuance of common stock upon exercise of 
   stock options |                                                                       |                                                                        | 33     |  |                    |   | --  |          |  |   | 423            |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|Issuance of restricted stock, net of forfeitures            |                                                                       |                                                                        | 102    |  |                    |   | 1   |          |  |   | (1             | ) |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|Amortization of share-based awards                          |                                                                       |                                                                        |        |  |                    |   |     |          |  |   | 1,381          |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|Comprehensive loss:                                         |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            | Net loss                                                              |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         | (12,516 | )                   | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            | Foreign currency translation adjustments                              |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            | Disclosure of reclassification amount, net of
   taxes (8% tax rate): |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       | Unrealized hedging gain arising during the 
   period                  |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       | Reclassification adjustment for hedging gains 
   included in net loss |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       | Net unrealized cash flow hedging gain                                  |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            | Total comprehensive income (loss)                                     |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         | (12,516 | )                   | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|Balance at September 30, 2008                               |                                                                       |                                                                        | 31,292 |  |                    | $ | 313 |          |  | $ | 282,776        |   |  | $                               | 93,060  |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 
|                                                            |                                                                       |                                                                        |        |  |                    |   |     |          |  |   |                |   |  |                                 |         |         |                     | 



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)                



|                                                             |                                                                                          | Three Months Ended                        |       
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------- | ----------------------------------------- | ------
|                                                             |                                                                                          |                                           |       
|                                                             |                                                                                          | September 30,
2008                        |       
|                                                             |                                                                                          |                                           |       
|Operating Activities:                                        |                                                                                          |                                           |       
|                                                             | Net (loss) income                                                                        |                                           | $     
|                                                             | Adjustments to reconcile net (loss) income to net cash used in 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                                                          |                                           |       
|                                                             | Increase in inventories                                                                  |                                           |       
|                                                             | Increase in prepaid expenses and other assets                                            |                                           |       
|                                                             | Increase in accounts payable                                                             |                                           |       
|                                                             | Increase in other payables, accrued expenses and other liabilities                       |                                           |       
|                                                             | Other                                                                                    |                                           |       
|                                                             |                                                                                          |                                           |       
|                                                             |                                                                                          | Net cash used in operating activities     |       
|                                                             |                                                                                          |                                           |       
|                                                             |                                                                                          |                                           |       
|Investing Activities:                                        |                                                                                          |                                           |       
|                                                             | Additions to property and equipment                                                      |                                           |       
|                                                             | Acquisition of 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                                              |                                           |       
|                                                             | Financing fees paid                                                                      |                                           |       
|                                                             |                                                                                          |                                           |       
|                                                             |                                                                                          | Net cash provided by financing activities |       
|                                                             |                                                                                          |                                           |       
|Effect of exchange rate changes on cash and cash equivalents |                                                                                          |                                           | (882  
|                                                             |                                                                                          |                                           |       
|Net increase (decrease) in cash and cash equivalents         |                                                                                          |                                           | 1,122 
|Cash and cash equivalents at beginning of period             |                                                                                          |                                           | 26,396
|                                                             |                                                                                          |                                           |       
|Cash and cash equivalents at end of period                   |                                                                                          | $                                         | 27,518
|                                                             |                                                                                          |                                           |       
|                                                             |                                                                                          |                                           |       
|                                                             |                                                                                          |                                           |       
|                                                             |                                                                                          |                                           |       
|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 -



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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 domestic and international subsidiaries. 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 fiscal year ended June 30, 2008 (the "2008 Annual Report"), filed with the Commission.



The consolidated balance sheet of the Company as of June 30, 2008 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 presentation of the quarter ended September 30, 2008, certain reclassifications were made to the prior years' Consolidated Financial Statements and the accompanying footnotes.



NOTE 2.    COMPREHENSIVE INCOME (LOSS)

The Company's accumulated other comprehensive income (loss) shown on the accompanying consolidated balance sheets consists of foreign currency translation adjustments, which are not adjusted for income taxes since they relate to indefinite investments in non-U.S. subsidiaries, and the unrealized gains (losses), net of taxes, related to the Company's foreign currency contracts.

The components of accumulated other comprehensive income (loss) were as follows:



|(Amounts in thousands)                              | September 30, 
2008 |       | June 30, 
2008 | 
|--------------------------------------------------- | ------------------- | ----- | -------------- | 
|                                                    |                     |       |                | 
|                                                    |                     |       |                | 
|Cumulative foreign currency translation adjustments | $                   | 456   |                | 
|Unrealized hedging gain (loss), net of taxes        |                     | 3,930 |                | 
|                                                    |                     |       |                | 
|Accumulated other comprehensive income (loss)       | $                   | 4,386 |                | 
|                                                    |                     |       |                | 
|                                                    |                     |       |                | 
|                                                    |                     |       |                | 

NOTE 3.    (LOSS) INCOME PER SHARE



Basic (loss) income per share is computed by dividing the net (loss) income by the weighted average number of 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 September 30, 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.



- 7 -



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



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



|(Amounts in thousands, except per share data)                                                                                                                                                                            | Three Months Ended                                    |                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------- | -----------------------------------
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         | September 30,
2008                                    |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|Basic                                                                                                                                                                                                                    |                                                       |                                    
|                                                                                                                                                                                                                         | Net (loss) income                                     | $                                  
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         | Weighted average shares outstanding                   |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         | Net (loss) income per basic share                     | $                                  
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|Diluted                                                                                                                                                                                                                  |                                                       |                                    
|                                                                                                                                                                                                                         | Net (loss) income                                     | $                                  
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         | Weighted average shares outstanding                   |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         | Potential common shares - treasury method(1)          |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         | Weighted average shares and potential dilutive shares |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       | Net (loss) income per diluted share
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|                                                                                                                                                                                                                         |                                                       |                                    
|(1)   For the three months ended September 30, 2008, 1,519,976 shares of potentially dilutive Common Stock were not included in the diluted income per share calculation because to do so would have been anti-dilutive.

The following table shows the number of shares subject to option awards that were outstanding for the three months ended September 30, 2008 and 2007 that were not included in the diluted net (loss) income per share calculation because to do so would have been anti-dilutive:





|                 | Three Months Ended 
|---------------- | -------------------
|                 |                    
|                 | September 30, 
2008
|                 |                    
|Number of shares | 3,419,793          
|                 |                    
|                 |                    
|                 |                    



NOTE 4.    RESTRUCTURING CHARGES

In fiscal 2007, the Company commenced a comprehensive review of its global business processes to re-engineer its extended supply chain, logistics and transaction processing systems.  In May 2008, the Company announced a decision to accelerate the re-engineering of its extended supply chain functions as well as the realignment of other parts of its organization to better support its new business processes.  This initiative includes a migration to a shared services model to simplify transaction processing by consolidating the Company's global transaction processing functions and the implementation of a new financial accounting and order processing system.



As a result, the Company has implemented a plan that will result in restructuring and one-time expenses, including severance, relocation, recruiting and temporary staffing expenditures totaling approximately $12 to $14 million through June 30, 2010.  Approximately $0.9 million of these expenses were incurred during the three months ended September 30, 2008 and approximately $2.0 million have been incurred cumulatively since the inception of this program.  Additionally, unrelated to this plan, for the three months ended September 30, 2007, the Company incurred approximately $0.9 million of restructuring expenses related to the reorganization of certain of its departments.



The restructuring expenses discussed above are included in selling, general and administrative expenses in the Company's consolidated statement of operations and as described in Note 14, have not been attributed to any of the Company's reportable segments and are included in unallocated corporate expenses.  At September 30, 2008 and June 30, 2008, the Company had a restructuring liability of $0.3 million and $0.4 million, respectively.





- 8 -



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

NOTE 5.    SHARE-BASED COMPENSATION

At September 30, 2008, the Company had outstanding several share-based compensation plans.  For the three months ended September 30, 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 
|---------------------------------------------------- |  | -------------------
|                                                     |  |                    
|                                                     |  | September 30, 
2008
|                                                     |  |                    
|Share-based compensation cost                        |  | $                  
|                                                     |  |                    
|                                                     |  |                    
|                                                     |  |                    
|Tax benefit related to share-based compensation cost |  | $                  
|                                                     |  |                    
|                                                     |  |                    
|                                                     |  |                    



As of September 30, 2008, there were approximately $12.2 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 2.3years.



Stock Options



On August 18, 2008, the Company's Board of Directors (the "Board") granted to employees stock options for 294,600 shares of Common Stock under the 2004 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, 2009, 2010 and 2011, 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 $18.88 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 options granted was $7.10 per share based on the Black-Scholes option-pricing model as discussed below.  The options expire ten years from the date of grant.



The weighted-average grant date fair value of options granted during the three months ended September 30, 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.



|                                  |  | Three Months Ended
|--------------------------------- |  | ------------------
|                                  |  | September 30, 2008
|                                  |  |                   
|Expected dividend yield           |  |                   
|Expected price volatility         |  |                   
|Risk-free interest rate           |  |                   
|Expected life of options in years |  |                   





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

A summary of stock option activity under the Company's share-based compensation plans for the three months ended September 30, 2008 is presented below:



|Options                           |  | Common 
Stock 
Shares |   |  | Weighted
Average
Exercise
Price |       |  | Weighted
Average
Remaining
Contractual
Term |     | Aggregate
Intrinsic
Value (1)
|--------------------------------- |  | --------------------- | - |  | ------------------------------- | ----- |  | ------------------------------------------- | --- | -----------------------------
|                                  |  |                       |   |  |                                 |       |  |                                             |     |                              
|Outstanding at June 30, 2008      |  | 3,191,393             |   |  | $                               | 16.59 |  |                                             | 5.2 |                              
|New grants                        |  | 294,600               |   |  | $                               | 18.88 |  |                                             |     |                              
|Exercised                         |  | (32,716               | ) |  | $                               | 12.94 |  |                                             |     |                              
|Forfeited or expired              |  | (33,484               | ) |  | $                               | 22.65 |  |                                             |     |                              
|                                  |  |                       |   |  |                                 |       |  |                                             |     |                              
|Outstanding at September 30, 2008 |  | 3,419,793             |   |  | $                               | 16.76 |  |                                             | 5.4 |                              
|                                  |  |                       |   |  |                                 |       |  |                                             |     |                              
|                                  |  |                       |   |  |                                 |       |  |                                             |     |                              
|                                  |  |                       |   |  |                                 |       |  |                                             |     |                              
|Exercisable at September 30, 2008 |  | 2,703,315             |   |  | $                               | 15.87 |  |                                             | 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 three months ended September 30, 2008 and 2007, based upon the average market price during the period, was approximately $0.2 million and $1.3 million, respectively.



Restricted Common Stock



On August 18, 2008, the Board granted to employees 117,800 shares of performance-based restricted stock and 121,133 shares of service-based restricted stock.  All or part of the performance-based restricted stock will vest on a date that is two business days after the Company's financial results for fiscal 2011 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 a cumulative earnings per diluted share target.  The service-based restricted stock will vest in equal thirds over a three-year period on a date that is two business days after the Company's financial results for each of the fiscal years ending June 30, 2009, 2010 and 2011, 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 three months ended September 30, 2008, is presented below:





|Restricted Stock                 |  | Common
Stock Shares |   |  | Weighted
Average
Grant-Date
Fair Value
|-------------------------------- |  | ------------------- | - |  | --------------------------------------
|                                 |  |                     |   |  |                                       
|Non-vested at June 30, 2008      |  | 866,068             |   |  | $                                     
|Granted                          |  | 238,933             |   |  | $                                     
|Vested                           |  | (66,691             | ) |  | $                                     
|Forfeited                        |  | (143,557            | ) |  | $                                     
|                                 |  |                     |   |  |                                       
|Non-vested at September 30, 2008 |  | 894,753             |   |  | $                                     
|                                 |  |                     |   |  |                                       
|                                 |  |                     |   |  |                                       
|                                 |  |                     |   |  |                                       





- 10 -





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

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.  For the three months ended September 30, 2008 and 2007, the Company recorded costs associated with the ESPP of approximately $0.1 million and $0.1 million, respectively.  The next purchase under the ESPP will be consummated on November 28, 2008.



NOTE 6.    NEW ACCOUNTING STANDARDS



Hierarchy of Generally Accepted Accounting Principles



In May 2008, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162").  SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles.  SFAS 162 will be effective 60 days following the Securities and Exchange Commission's approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.  The Company is evaluating the impact, if any, of SFAS 162 on its consolidated financial statements.

Disclosures About Derivative Instruments and Hedging Activities

In March 2008, the FASB issued Statement of Financial Accounting Standards 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 will be effective for the Company in its fiscal quarter beginning January 1, 2009.  The Company is 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 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 FASB Staff Position 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 became 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 adoption of SFAS 157 did not have a material impact on the Company's consolidated financial statements.  See Note 12.



- 11 -



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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 was effective for the Company beginning July 1, 2008.  The adoption of SFAS 159 did not have a material impact on the Company's consolidated financial statements, as the Company did not elect to use the fair value option.



Useful Life of Intangible Assets



In April 2008, the FASB issued FASB Staff Position No. 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3").  FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.  FSP 142-3 is effective on a prospective basis to all intangible assets acquired and for disclosures on all intangible assets recognized on or after the beginning of the first annual period subsequent to December 15, 2008.  Early adoption is prohibited.  The Company is evaluating the impact, if any, of FSP 142-3 on its consolidated financial statements.



NOTE 7.    INVENTORIES



The components of inventory were as follows:





|(Amounts in thousands) | September 30,
2008 |         | June 30,
2008
|---------------------- | ------------------ | ------- | -------------
|                       |                    |         |              
|Raw materials          | $                  | 88,585  |              
|Work in progress       | 30,434             |         | 40,195       
|Finished goods         | 339,692            |         | 273,868      
|                       |                    |         |              
|Total                  | $                  | 458,711 |              
|                       |                    |         |              
|                       |                    |         |              
|                       |                    |         |              
|                       |                    |         |              



NOTE 8.    SHORT-TERM DEBT



The Company has a revolving bank credit facility (the "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. In order to accommodate increased working capital requirements associated with the growth of the Company's business, on July 21, 2008, the Credit Facility was amended to increase its size from $250 million to $325 million, with a $25 million sub-limit for letters of credit.  Under the terms of the Credit Facility, as amended by the July 2008 amendment, the Company may, at any time, increase the size of the Credit Facility up to $375 million without entering into a formal amendment requiring the consent of all of the banks, subject to the Company's satisfaction of certain conditions.  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.  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; provided, however, that pursuant to the terms of the July 2008 amendment, from August 15 to October 31 of each year the borrowing base is temporarily increased by $25 million.  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").



- 12 -



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



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 base capacity declines to less than $25 million ($35 million from December 1 through May 31).  No financial maintenance covenant was applicable for the three months ended September 30, 2008.  Under the terms of the Credit Facility, the Company may pay dividends or repurchase Common Stock if the Company maintains borrowing base capacity of at least $25 million from June 1 to November 30, and at least $35 million from December 1 to May 31, after making the applicable payment.  The Credit Facility restricts the Company 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 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, except that the Applicable Margin on the first $25.0 million of borrowings from August 15 to October 15 of each year, while the temporary increase in the Company's borrowing base is in effect, is 1.00% higher.  As of September 30, 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 three months ended September 30, 2008 and 2007, the weighted average annual interest rate on borrowings under the Credit Facility was 4.1% and 7.2%, respectively.

As of September 30, 2008, the Company had $229.5 million in outstanding borrowings and approximately $4.7 million in letters of credit outstanding under the Credit Facility, compared with $119.0 million in outstanding borrowings and approximately $5.0 million in letters of credit under the Credit Facility at June 30, 2008.  As of September 30, 2008, the Company had approximately $323.5 million of eligible accounts receivable and inventories available as collateral under the Credit Facility and remaining borrowing availability of $88.8 million.  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 9.    LONG-TERM DEBT



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





|(Amounts in thousands)                                                                            |  | September 30,
2008 |         | June 30,
2008 |  
|------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | ------------- | -
|                                                                                                  |  |                    |         |               |  
|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 |  |                    | (1,849  | )             |  
|Riviera Term Note                                                                                 |  |                    | 1,205   |               |  
|                                                                                                  |  |                    |         |               |  
|Total debt                                                                                        |  |                    | 224,356 |               |  
|Less: Current portion of long-term debt                                                           |  |                    | 1,205   |               |  
|                                                                                                  |  |                    |         |               |  
|Total long-term debt                                                                              |  | $                  | 223,151 |               | $
|                                                                                                  |  |                    |         |               |  
|                                                                                                  |  |                    |         |               |  
|                                                                                                  |  |                    |         |               |  





- 13 -



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



NOTE 10.    COMMITMENTS AND CONTINGENCIES



The Company is a party to a number of 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 business, prospects, results of operations, financial condition or cash flows.



In connection with the June 2006 acquisition by the Company of certain assets of Riviera Concepts Inc. ("the Riviera Acquisition"), the Company recorded a contingent performance liability 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 over the three-year period after the closing date on the licensed brands acquired in the Riviera Acquisition.  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 targets for the first and second installment due on July 31, 2007 and July 31, 2008, respectively, were not achieved.  The contingent performance liability was recorded as a result of the negative goodwill resulting from this acquisition.



In connection with the August 2006 acquisition of certain assets comprising the fragrance business of Sovereign Sales LLC, $12 million of the purchase price was in the form of contingent consideration, the majority of which was to be paid in two installments over two years from the date of closing if certain financial targets and other conditions are satisfied.  The conditions for the first and second installments were satisfied, and the Company recognized a liability of $6.3 million and $5.3 million in the consolidated balance sheets at June 30, 2007 and June 30, 2008, respectively.  Payment of the first installment was made in September 2007, and the second installment was paid in July 2008.  The financial target for the final installment of $0.3 million has also been satisfied, and the final installment is scheduled to be paid in September 2009.



As of September 30, 2008, the Company had notional amounts of 49.7 million Euros and 28.3 million British pounds under foreign currency contracts that expire between October 31, 2008 and June 30, 2009 to reduce the exposure of its foreign subsidiary revenues to fluctuations in currency rates.  As of September 30, 2008, the Company had notional amounts of 7.5 million Canadian dollars under foreign currency contracts that expire between October 31, 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 gain, net of taxes, recognized during the three months ended September 30, 2008 from the settlement of these contracts was approximately $0.3 million, and the realized loss, net of taxes, recognized during the three months ended September 30, 2007 from the settlement of these contracts was approximately $0.7 million.  At September 30, 2008, the unrealized gain associated with these contracts of approximately $3.9 million (net of taxes of $0.4 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 September 30, 2008, there were no such foreign currency contracts outstanding.  The realized gain, net of taxes, recognized from contracts in place during the three months ended September 30, 2008, was approximately $0.8 million.  The realized loss, net of taxes, recognized from contracts in place during the three months ended September 30, 2007, was approximately$1.0 million.





- 14 -





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



NOTE 11.    REPURCHASE OF COMMON STOCK



On November 5, 2008, the Board authorized the Company to extend its existing $80 million common stock repurchase program through November 30, 2010.  The common stock repurchase program was set to expire November 30, 2008.  As of September 30, 2008, the Company had repurchased 2,273,038 shares of common stock on the open market under the stock repurchase program, at an average price of $18.18 per share, at a cost of $41.3 million, including sales commissions, leaving $38.7 million available for additional common stock repurchases under the program.  The Company accounted for the acquisition of these shares under the treasury method.  For the three months ended September 30, 2008, the Company did not repurchase any shares of common stock.



NOTE 12.    FAIR VALUE MEASUREMENTS



The Company adopted SFAS 157 as of July 1, 2008, with the exception of the application of the statement to its long-lived nonfinancial assets, including goodwill and intangibles.  SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.  SFAS 157 establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used in measuring fair value into three broad levels as follows:





|Level 1 - | Quoted prices in active markets for identical assets or liabilities                                      
|--------- | ---------------------------------------------------------------------------------------------------------
|          |                                                                                                          
|Level 2 - | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly
|          |                                                                                                          
|Level 3 - | Unobservable inputs based on the Company's own assumptions                                               

The following table presents the fair value hierarchy for those of the Company's financial assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2008:



|(Amounts in thousands)     |  |         |    |         |   |         |  |      
|-------------------------- |  | ------- | -- | ------- | - | ------- |  | -----
|Assets                     |  | Level 1 |    | Level 2 |   | Level 3 |  | Total
|                           |  |         |    |         |   |         |  |      
|Foreign currency contracts |  | $       | -- |         | $ | 4,284   |  | $    

See Note 10 for a discussion of the Company's foreign currency contracts.

NOTE 13.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION



The following condensed financial statements as of September 30, 2008 and June 30, 2008, and for the three months ended September 30, 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.





- 15-





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



|Balance Sheet                                                 |                                             | As of September 30, 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                                     |                                             |                                           
|Total 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
|                                                              |                                             |                                           
|                                                              |                                             |                                           
|                                                              |                                             |                                           



- 16 -





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



|Balance Sheet                         | As of June 30, 2008                                          
|------------------------------------- | -------------------------------------------------------------
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|ASSETS                                |                                                              
|Current Assets:                       |                                                              
|                                      | Cash and cash equivalents                                    
|                                      | Accounts receivable, net                                     
|                                      | Inventories                                                  
|                                      | Intercompany receivable                                      
|                                      | Deferred income taxes                                        
|                                      | Prepaid expenses and other assets                            
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|Property and equipment, net           |                                                              
|                                      |                                                              
|Other Assets:                         |                                                              
|                                      | Investment in subsidiaries                                   
|                                      | Exclusive brand licenses, trademarks and 
   intangibles, net
|                                      | Debt financing costs, net                                    
|                                      | Other                                                        
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|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                            
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      | Long-term debt                                               
|                                      | Deferred income taxes and other liabilities                  
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|Shareholders' Equity                  |                                                              
|                                      | Common stock                                                 
|                                      | Additional paid-in capital                                   
|                                      | Retained earnings (accumulated deficit)                      
|                                      | Treasury stock                                               
|                                      | Accumulated other comprehensive loss                         
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              
|                                      |                                                              



- 17 -



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



|Statement of Operations                   | Three Months Ended September 30, 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                   | Three Months Ended September 30, 2007
|----------------------------------------- | -------------------------------------
|                                          |                                      
|                                          |                                      
|                                          |                                      
|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 income                                |                                      
|                                          |                                      
|                                          |                                      
|                                          |                                      



- 18 -



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

|Statement of Cash Flows                                      |                                             | Three Months Ended September 30, 2008 |        
|------------------------------------------------------------ | ------------------------------------------- | ------------------------------------- | -------
|                                                             |                                             |                                       |        
|                                                             |                                             | Company                               |        
|                                                             |                                             |                                       |        
|Operating activities:                                        |                                             |                                       |        
|Net cash (used in) provided by operating activities          |                                             | $                                     | (54,669
|                                                             |                                             |                                       |        
|                                                             |                                             |                                       |        
|Investing activities:                                        |                                             |                                       |        
|                                                             | Additions to property and equipment         |                                       |        
|                                                             | Acquisition of other assets                 |                                       |        
|                                                             |                                             |                                       |        
|Net cash used in investing activities                        |                                             |                                       | (12,147
|                                                             |                                             |                                       |        
|                                                             |                                             |                                       |        
|Financing activities:                                        |                                             |                                       |        
|                                                             | Proceeds from short-term debt               |                                       |        
|                                                             | Payments on long-term debt                  |                                       |        
|                                                             | Proceeds from the exercise of stock options |                                       |        
|                                                             | Financing fees paid                         |                                       |        
|                                                             | Net change in intercompany obligations      |                                       |        
|                                                             |                                             |                                       |        
|Net cash provided by (used in) financing activities          |                                             |                                       | 67,155 
|                                                             |                                             |                                       |        
|Effect of exchange rate changes on cash and cash equivalents |                                             |                                       | (882   
|Net (decrease) increase in cash and cash equivalents         |                                             |                                       | (543   
|Cash and cash equivalents at beginning of period             |                                             |                                       | 3,487  
|                                                             |                                             |                                       |        
|Cash and cash equivalents at end of period                   |                                             | $                                     | 2,944  
|                                                             |                                             |                                       |        
|                                                             |                                             |                                       |        
|                                                             |                                             |                                       |        



|Statement of Cash Flows                                      |                                             | Three Months Ended September 30, 2007 |        
|------------------------------------------------------------ | ------------------------------------------- | ------------------------------------- | -------
|                                                             |                                             |                                       |        
|                                                             |                                             | Company                               |        
|                                                             |                                             |                                       |        
|Operating activities:                                        |                                             |                                       |        
|Net cash (used in) provided by operating activities          |                                             | $                                     | (95,875
|                                                             |                                             |                                       |        
|                                                             |                                             |                                       |        
|Investing activities:                                        |                                             |                                       |        
|                                                             | Additions to property and equipment         |                                       |        
|                                                             | Acquisition of other assets                 |                                       |        
|                                                             |                                             |                                       |        
|Net cash used in investing activities                        |                                             |                                       | (12,080
|                                                             |                                             |                                       |        
|                                                             |                                             |                                       |        
|Financing activities:                                        |                                             |                                       |        
|                                                             | Proceeds from short-term debt               |                                       |        
|                                                             | Payments on long-term debt                  |                                       |        
|                                                             | Proceeds from the exercise of stock options |                                       |        
|                                                             | Net change in intercompany obligations      |                                       |        
|                                                             |                                             |                                       |        
|Net cash provided by (used in) financing activities          |                                             |                                       | 104,393
|                                                             |                                             |                                       |        
|Effect of exchange rate changes on cash and cash equivalents |                                             |                                       | 355    
|Net (decrease) increase in cash and cash equivalents         |                                             |                                       | (3,207 
|Cash and cash equivalents at beginning of period             |                                             |                                       | 7,278  
|                                                             |                                             |                                       |        
|Cash and cash equivalents at end of period                   |                                             | $                                     | 4,071  
|                                                             |                                             |                                       |        
|                                                             |                                             |                                       |        
|                                                             |                                             |                                       |        





-19 -



---



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

NOTE 14.    Segment Data and Related Information



Reportable operating segments, as defined by Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information, include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the "Chief Executive") in deciding how to allocate resources and in assessing performance.  As a result of the similarities in the procurement, marketing and distribution processes for all of the Company's products, much of the information provided in the consolidated financial statements is similar to, or the same as, that reviewed on a regular basis by the Chief Executive.



The Company's operations are organized into the following reportable segments:





| | North America Fragrance -The North America Fragrance segment sells the Company's portfolio of owned, licensed and distributed fragrance brands to department stores, mass retailers and distributors in the United States, Canada and Puerto Rico.  This segment also sells the Company's Elizabeth Arden products in prestige department stores in Canada and Puerto Rico and to other selected retailers.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                            
| | International-The International segment sells the Company's portfolio of owned and licensed brands, including the Elizabeth Arden products, in approximately 90 countries outside of North America through perfumeries, boutiques, department stores and travel retail outlets worldwide.                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                            
| | Other-The Other reportable segment sells the Company's Elizabeth Arden products in prestige department stores in the United States and through the Red Door beauty salons, which are owned and operated by an unrelated third party.                                                                                                                                                                       



Prior to June 30, 2008, the Company reported its operations under one segment.  Effective June 30, 2008, the Company changed its segment reporting and, accordingly, amounts shown for the quarter ended September 30, 2007, have been revised to conform to the current period presentation.



The Chief Executive evaluates segment profit based upon income from operations, which represents earnings before income taxes, interest expense and depreciation and amortization charges.  The accounting policies for each of the reportable segments are the same as those described in the Company's 2008 Annual Report under Note 1 - "General Information and Summary of Significant Accounting Policies."  The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; thus, no additional information regarding assets and liabilities of the Company's reportable segments is produced for the Chief Executive or included herein.



Segment profit excludes depreciation and amortization, interest expense and unallocated corporate expenses, which are shown in the table below reconciling segment profit to consolidated net (loss) income before income taxes.  Included in unallocated corporate expenses are (i) adjustments to eliminate intercompany mark-up, (ii) employee incentive costs, and (iii) restructuring charges.  Unallocated corporate expenses for the three months ended September 30, 2008, include $19.1 million of expenses ($15.4 million of which did not require the use of cash in the current period)



- 20 -



---



ELIZABETH ARDEN, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The following table is a comparative summary of our net sales and segment profit by reportable segment for the three months ended September 30, 2008 and 2007:





|(Amounts in thousands)            |  | Three Months Ended |        
|--------------------------------- |  | ------------------ | -------
|                                  |  |                    |        
|                                  |  | September 30,
2008 |        
|                                  |  |                    |        
|Segment Net Sales:                |  |                    |        
|North America Fragrance           |  | $                  | 177,560
|International                     |  |                    | 94,426 
|Other                             |  |                    | 12,201 
|                                  |  |                    |        
|Total                             |  | $                  | 284,187
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        
|Segment Profit:                   |  |                    |        
|North America Fragrance           |  | $                  | 31,899 
|International                     |  |                    | (6,588 
|Other                             |  |                    | (880   
|                                  |  |                    |        
|Total                             |  | $                  | 24,431 
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        
|Reconciliation:                   |  |                    |        
|Segment Profit                    |  | $                  | 24,431 
|Less:                             |  |                    |        
|Depreciation and Amortization     |  |                    | 6,339  
|Interest expense                  |  |                    | 6,575  
|Unallocated Corporate Expenses    |  |                    | 27,405 
|                                  |  |                    |        
|(Loss) Income Before Income Taxes |  | $                  | (15,888
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        



|(1)   In May 2008, the Company entered into an exclusive long-term global licensing agreement for the Liz Claiborne fragrance brands, which became effective on June 9, 2008.  Amounts shown reflect $19.1 million of expenses ($15.4 million of which did not require the use of cash in the current period) related to the Liz Claiborne license agreement, due to Liz Claiborne inventory that was purchased at a higher cost prior to the June 2008 effective date of the license agreement and transition expenses.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 21 -



---



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, 2008.  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 with an extensive portfolio of prestige fragrance, skin care and cosmetics brands. Our branded products include the Elizabeth Arden fragrances:  Red Door, Elizabeth Arden 5th Avenue, Elizabeth Arden Provocative Woman, Elizabeth Arden green tea,andElizabeth Arden Mediterranean; the Elizabeth Arden skin care brands: Ceramide, Intervene and PREVAGE®; and the Elizabeth Arden branded lipstick, foundation and other color cosmetics products.  Our prestige fragrance portfolio also includes the following celebrity, lifestyle and designer fragrances:



|Celebrity Fragrances | Elizabeth Taylor's White Diamonds and Passion, curious Britney Spears, fantasy Britney Spears and Britney Spears believe, with Love...Hilary Duff, Danielle by Danielle Steel, M by Mariah Carey, Usher
|-------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |                                                                                                                                                                                                        
|Lifestyle Fragrances | Curve, Giorgio Beverly Hills, Lucky, PS Fine Cologne for Men, DesignandWhite Shoulders                                                                                                                 
|                     |                                                                                                                                                                                                        
|Designer Fragrances  | Juicy Couture, Badgley Mischka, Rocawear, Alberta Ferretti, Alfred Sung, Nannette Lepore, Geoffrey Beene, Halston, Bob Mackie,and GANT                                                                 

In addition to our owned and licensed fragrance brands, we distribute over 400 additional prestige fragrance brands, primarily in the United States, through distribution agreements and other purchasing arrangements.

Our business strategy is to increase net sales, operating margins and earnings by (a) growing the sales of our existing brand portfolio, including the Elizabeth Arden brand, through new product innovation and targeting additional demographics and geographic markets, (b) acquiring prestige beauty brands through licensing opportunities and acquisitions, (c) expanding the prestige fragrance category at mass retail customers in the U.S., and (d) implementing initiatives to improve our cost structure and working capital efficiencies.  We manage our business by evaluating net sales, EBITDA (as defined later in this discussion), EBITDA margin, segment profit 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 that should be considered as described in Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended June 30, 2008 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."

Effective June 9, 2008, we became the exclusive, global licensee for the sale, manufacture, distribution and marketing of the Liz Claiborne fragrance brands under a long-term license agreement with Liz Claiborne, Inc. and certain of its affiliates.  The Liz Claiborne fragrance portfolio consists of the Juicy Couture, Curveby Liz Claiborne, Lucky, Liz, Realities, Bora Boraand Mambo fragrances. In connection with the Liz Claiborne license agreement we also assumed a license for the Usher celebrity fragrances.  We anticipate that the Liz Claiborne licensing arrangement will allow us to (i) increase our market share in our North America Fragrance segment, (ii) gain efficiencies from a larger fragrance business, particularly by leveraging our supply chain, logistics and sales organizations, (iii) increase our gross margins by converting existing North America mass customer sales from distribution margins to owned/licensed margins, and (iv) provide additional sales volume for our International segment.



- 22 -



---





During fiscal 2009, we expect to incur transition expenses relating to the Liz Claiborne license agreement of approximately $3.5 to $4.5 million, before taxes, of which $3.7 million were recorded during the quarter ended September 30, 2008.  In addition, we anticipate that our gross margins for the first half of fiscal 2009 will be impacted by expenses relating to Liz Claiborne inventory that we purchased at a higher cost prior to the effective date of the license agreement.  We expect this charge to be approximately $19.0 million, before taxes, $15.4 million of which was recorded but did not require the use of cash during the quarter ended September 30, 2008.



In fiscal 2007, we commenced a comprehensive review of our global business processes to re-engineer our extended supply chain, logistics and transaction processing systems.  We call this initiative our Global Efficiency Re-engineering initiative.  In May 2008, we announced that we had decided to accelerate the re-engineering of our extended supply chain functions as well as the realignment of other parts of our organization to better support our new business processes.

In connection with our Global Efficiency Re-engineering initiative, we are also migrating to an Oracle financial accounting and order processing system to improve key transaction processes and accommodate anticipated growth of our business.  We expect this infrastructure investment to simplify our transaction processing by utilizing a common platform to centralize all of our global transaction processing functions.



As a result of the acceleration of the re-engineering of our extended supply chain functions and the implementation of the Oracle financial accounting and order processing system, we are implementing a restructuring plan that will result in restructuring and one-time expenses, including severance, relocation, recruiting and temporary staffing expenditures.  We expect these expenses to be incurred primarily in fiscal years 2009 and 2010 and currently estimate that they will total $12.0 million to $14.0 million before taxes, of which $2.0million has been incurred to date and $1.1 million was incurred during the quarter ended September 30, 2008.



Seasonality



Our operations have historically been seasonal, with higher sales generally occurring in 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, 2008, approximately 61% of our net sales were made during the first half of the fiscal year.  Due to product innovation and new product launches, the size and timing of certain orders from our customers and additions or losses of brand distribution rights, 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 normally from July to October and peak receivable balances normally from September to December.  Our working capital borrowings are also seasonal and are normally highest in the months of September, October and November.  During the months of December, January, February of each year, cash is normally generated 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, 2008, 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, 2008, other than the adoption of Statement of Financial Accounting Standards No.157, Fair Value Measurements, as described below, there have been no significant changes to the assumptions and estimates related to those critical accounting policies.





- 23 -



---



In September 2006, the Financial Accounting Standards Board (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 FASB Staff Position 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 became effective for us on July 1, 2008.  For nonfinancial assets and nonfinancial liabilities, SFAS 157 will be effective for us on July 1, 2009.  The adoption of SFAS 157 did not have a material impact on our consolidated financial statements.  See Note 12 to the Notes to Unaudited Consolidated Financial Statements.



Results of Operations

The following discussion compares the historical results of operations for the three months ended September 30, 2008 and September 30, 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 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | -------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                   |                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                   | September 30, 
2008
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                   |                    
|Net sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                   | $                  
|Cost of sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                   |                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Gross profit                      |                    
|Selling, general and administrative expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                   |                    
|Depreciation and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                   |                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (Loss) income from operations     |                    
|Interest expense, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                   |                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (Loss) income before income taxes |                    
|(Benefit from) provision for income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                   |                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Net (loss) income                 |                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                   |                    
|Other data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                   |                    
|EBITDA and EBITDA margin (1) (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                   | $                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                   |                    
|(1)   For a definition of EBITDA and a reconciliation of net (loss) income to EBITDA, see "EBITDA" under Results of Operations -- Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007.  EBITDA margin represents EBITDA divided by net sales.
(2)   The three months ended September 30, 2008 include $19.1 million of expenses ($15.4 million of which did not require the use of cash) related to the Liz Claiborne license agreement due to Liz Claiborne inventory that was purchased at a higher cost prior to the June 2008 effective date of the license agreement and transition expenses, and $1.1 million of expenses related to our Global Efficiency Re-engineering initiative and restructuring expenses.  The three months ended September 30, 2007 include $0.9 million of restructuring expenses.  For the three months ended September 30, 2008 and 2007, these expenses reduced EBITDA margin by 7.1% and 0.4%, respectively.

Our operations are organized into the following reportable segments:





| | North America Fragrance - Our North America Fragrance segment sells our portfolio of owned, licensed and distributed fragrance brands to department stores, mass retailers and distributors in the United States, Canada and Puerto Rico.  This segment also sells our Elizabeth Arden products in prestige department stores in Canada and Puerto Rico and to other selected retailers.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                         
| | International - Our International segment sells our portfolio of owned and licensed brands, including our Elizabeth Arden products, in approximately 90 countries outside of North America through perfumeries, boutiques, department stores and travel retail outlets worldwide.                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                                                         
| | Other- The Other reportable segment sells our Elizabeth Arden products in prestige department stores in the United States and through the Red Door beauty salons, which are owned and operated by an unrelated third party.                                                                                                                                                             

- 24 -



---



Our segment reporting has been revised in accordance with the FASB Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information.  Prior to June 30, 2008, we reported our operations under one reporting segment.  Effective June 30, 2008, we changed our segment reporting and, accordingly, amounts shown for the quarter ended September 30, 2007, have been revised to conform to the current period presentation.  See Note 14 to the Notes to Unaudited Consolidated Financial Statements.



Segment profit excludes depreciation and amortization, interest expense and unallocated corporate expenses, which are shown in the table below reconciling segment profit to consolidated (loss) income before income taxes.  Included in unallocated corporate expenses are (i) adjustments to eliminate intercompany mark-up, (ii) employee incentive costs, and (iii) restructuring charges.  Unallocated corporate expenses for the three months ended September 30, 2008, include $19.1 million of expenses ($15.4 million of which did not require the use of cash in the current period) related to our recent Liz Claiborne license agreement due to inventory that we purchased at a higher cost prior to the June 2008 effective date of the license agreement and transition expenses.  We do not have intersegment sales.

The following table is a comparative summary of our net sales and segment profit by reportable segment for the three months ended September 30, 2008 and 2007 and reflects the basis of presentation described in Note 14 -- "Segment Data and Related Information" to the Notes to Unaudited Consolidated Financial Statements for all periods presented.





|(Amounts in thousands)            |  | Three Months Ended |        
|--------------------------------- |  | ------------------ | -------
|                                  |  |                    |        
|                                  |  | September 30,
2008 |        
|                                  |  |                    |        
|Segment Net Sales:                |  |                    |        
|North America Fragrance           |  | $                  | 177,560
|International                     |  |                    | 94,426 
|Other                             |  |                    | 12,201 
|                                  |  |                    |        
|Total                             |  | $                  | 284,187
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        
|Segment Profit:                   |  |                    |        
|North America Fragrance           |  | $                  | 31,899 
|International                     |  |                    | (6,588 
|Other                             |  |                    | (880   
|                                  |  |                    |        
|Total                             |  | $                  | 24,431 
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        
|Reconciliation:                   |  |                    |        
|Segment Profit                    |  | $                  | 24,431 
|Less:                             |  |                    |        
|Depreciation and Amortization     |  |                    | 6,339  
|Interest expense                  |  |                    | 6,575  
|Unallocated Corporate Expenses    |  |                    | 27,405 
|                                  |  |                    |        
|(Loss) Income Before Income Taxes |  | $                  | (15,888
|                                  |  |                    |        
|                                  |  |                    |        
|                                  |  |                    |        



|(1)   In May 2008, we entered into an exclusive long-term global licensing agreement for the Liz Claiborne fragrance brands, which became effective on June 9, 2008.  Amounts shown reflect $19.1 million of expenses ($15.4 million of which did not require the use of cash in the current period) related to the Liz Claiborne license agreement due to Liz Claiborne inventory that was purchased at a higher cost prior to the June 2008 effective date of the license agreement and transition expenses.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007

Net Sales.    Net sales increased 4.6%, or $12.4 million, for the three months ended September 30, 2008, compared to the three months ended September 30, 2007.  The higher net sales are primarily due to (i) $23.5 million of increased sales of the Liz Claiborne fragrance brands that we distributed in the prior year period, and of the Mariah Carey and Usher fragrance brands, (ii) $10.9 million of sales of fragrances launched since the prior year period, including theJuicy Couture fragrances, Viva La Juicy and Dirty English and the 9IX Rocawear fragrance, and (iii) $2.9 million of increased sales of skin care products.  These increases were partially offset by a decline in sales of distributed and certain owned or licensed fragrance brands.  Pricing changes and foreign currency translation had an immaterial effect on net sales.



North America Fragrance

Net sales increased by 9.0%, or $14.7 million.  The higher net sales were primarily due to (i) $21.8 million of increased sales of the Liz Claiborne, Mariah Carey and Usher fragrance brands, (ii) $10.1 million of sales resulting from sales of fragrances launched since the prior year period, including theJuicy Couture fragrances, Viva La Juicy and Dirty English and the 9IX Rocawear fragrance, and (iii) $2.4 million of increased sales of skin care products.  This increase was partially offset by a decline in sales of distributed and certain owned or licensed fragrance brands.

International

Net sales increased by 0.7%, or $0.6 million.  Higher fragrance sales in our travel retail business and higher skin care product sales in China were mostly offset by lower fragrance sales in Europe, particularly in the United Kingdom, and in Australia.  Excluding the unfavorable impact of foreign currency translation, International net sales increased 1.3%.

Gross Margin.    For the three months ended September 30, 2008 and 2007, gross margins were 37.4% and 39.1%, respectively.  The lower gross margin in the current year period is primarily due to $16.4 million of charges ($15.4 million of which did not require the use of cash) incurred in the three months ended September 30, 2008, related to the high cost Liz Claiborne inventory purchased prior to the June 2008 effective date of the recent Liz Claiborne license agreement and Liz Claiborne-related transition expenses, partially offset by current period sales of the Liz Claiborne fragrance brands that are now licensed brands.  Our owned and licensed brands carry higher gross margins than our distributed brands.  Prior to the effectiveness of the Liz Claiborne license agreement, sales of the Liz Claiborne fragrance brands were recorded as distributed brand sales.



SG&A.Selling, general and administrative expenses increased 18.3%, or $16.9 million, for the three months ended September 30, 2008, compared to the three months ended September 30, 2007.  The increase was principally due to higher advertising, promotional and royalty costs of $10.9 million and transition expenses of $2.7 million related to the recently licensed Liz Claiborne fragrance brands. We also incurred costs of $1.1 million related to our Global Efficiency Re-engineering initiative and restructuring expenses, which mostly offset prior period restructuring expenses.



Segment Profit

North America Fragrance



Segment profit increased 55.5%, or $11.4 million, primarily due to the higher sales volumes and improved gross margins attributed to the recently licensed Liz Claiborne fragrance brands, which carry higher gross margins than our distributed fragrance brands. These increases were partially offset by $8.4 million of higher advertising, promotional and royalty costs to support the Liz Claiborne fragrance brands and the 9IX Rocawear fragrance launch.

International

Segment profit decreased $10.8 million, primarily due to lower gross margins mostly related to customer mix particularly in the United Kingdom and Australia, as well as higher distribution and freight costs.  Also contributing to the decrease were increased sales overhead costs and the unfavorable impact of foreign currency translation.





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Interest Expense.    Interest expense, net of interest income, decreased 12.2%, or $1.0 million, for the three months ended September 30, 2008, compared to the three months ended September 30, 2007. The decrease is due to lower interest rates under our revolving bank credit facility, partially offset by higher average borrowings under such credit facility.



(Benefit from) Provision for Income Taxes.    A benefit from income taxes of $3.4 million was recorded for the three months ended September 30, 2008, compared to a provision for income taxes of $0.1 million for the three months ended September 30, 2007 primarily due to lower income from operations, which was mainly driven by the high cost inventory charges and transition expenses related to the Liz Claiborne license agreement.  The estimated annual effective tax rate calculated as a percentage of income before income taxes used for the three months ended September 30, 2008 was 21.2%, compared to 24.9% for the three months ended September 30, 2007.  The decrease in the estimated annual effective tax rate is mainly due to anticipated changes in earnings contributions from our worldwide affiliates as our worldwide affiliates generally have lower tax rates than our U.S. operations.

Net (Loss) Income.    Net loss for the three months ended September 30, 2008 was approximately $12.5 million compared to net income of $0.4 million for the three months ended September 30, 2007.  The decrease in net income was mainly driven by $19.1 million of high cost inventory charges and transition expenses related to the recent Liz Claiborne license agreement.



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 $16.9 million, to ($3.0) million for the three months ended September  30, 2008 compared to $13.9 million for the three months ended September 30, 2007.  The decrease in EBITDA was primarily the result of $19.1 million of high cost inventory charges and transition expenses related to the Liz Claiborne license agreement as discussed above.

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                        |        
|---------------------- | ----------------------------------------- | -------
|                       |                                           |        
|                       | September 30,
2008                        |        
|                       |                                           |        
|Net (loss) income      | $                                         | (12,516
|Plus:                  |                                           |        
|                       | (Benefit from) provision for income taxes |        
|                       | Interest expense, net                     |        
|                       | Depreciation and amortization             |        
|                       |                                           |        
|                       |                                           | EBITDA 
|                       |                                           |        
|                       |                                           |        
|                       |                                           |        

Liquidity and Capital Resources



|(Amounts in thousands)                               | Three Months Ended |        
|---------------------------------------------------- | ------------------ | -------
|                                                     |                    |        
|                                                     | September 30,
2008 |        
|                                                     |                    |        
|Net cash used in operating activities                | $                  | (94,539
|Net cash used in investing activities                |                    | (12,888
|Net cash provided by financing activities            |                    | 109,431
|Net increase (decrease) in cash and cash equivalents |                    | 1,122  



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Cash Flows.    For the three months ended September 30, 2008, net cash used in operating activities was $94.5 million, as compared to $116.4 million of net cash used in operating activities for the three months ended September 30, 2007.  This decrease in cash used in operating activities was primarily due to (i) inventory purchases made in June 2008 in connection with the Liz Claiborne license agreement that resulted in reduced inventory purchases in the quarter ended September 30, 2008, (ii) an increase in accounts payable for the three months ended September 30, 2008 mostly due to higher expenses to support the Liz Claiborne fragrance brands and the timing of payments to vendors, and (iii) management incentive costs related to the year ended June 30, 2007 that were paid during the three months ended September 30, 2007.



For the three months ended September 30, 2008, net cash used in investing activities of $12.9 million was comprised of $7.6 million of capital expenditures and the $5.3 million payment of the second installment of contingent consideration associated with our acquisition of the fragrance business of Sovereign Sales, LLC.  For the three months ended September 30, 2007, net cash used in investing activities of $13.6 million was comprised of $7.2 million of capital expenditures and the $6.4 million payment of the first installment of such contingent consideration.  The remaining contingent consideration of $0.3 million is expected to be paid in September 2009.



For the three months ended September 30, 2008, net cash provided by financing activities was $109.4 million, as compared to $126.5 million for the three months ended September 30, 2007.  During the three months ended September 30, 2008, borrowings under our credit facility increased by $110.5 million to $229.5 million at September 30, 2008.  During the three months ended September 30, 2007, borrowings under our credit facility increased by $125.4 million to $223.0 million at September 30, 2007.



Interest paid during the three months ended September 30, 2008, included $8.7 million of interest payments on the 7 3/4% senior subordinated notes due 2014 and $1.8 million of interest paid on the borrowings under our credit facility.  Interest paid during the three months ended September 30, 2007, included $8.7 million of interest payments on the 7 3/4% senior subordinated notes due 2014 and $2.6 million of interest 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. In order to accommodate the increased working capital requirements associated with the growth of our business, on July 21, 2008, the credit facility was amended to increase its size from $250 million to $325 million, with a $25 million sub-limit for letters of credit.  Under the terms of the credit facility, as amended by the July 2008 amendment, we may, at any time, increase the size of the credit facility up to $375 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.

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; provided, however, that pursuant to the terms of the July 2008 amendment, from August 15 to October 31 of each year our borrowing base is temporarily increased by $25 million.  Our obligations under the credit facility rank senior to our 7 3/4% senior subordinated notes due 2014.



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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 base capacity declines to less than $25 million ($35 million from December 1 through May 31).  No financial maintenance covenant was applicable for the three months ended September 30, 2008.  Under the terms of the credit facility, we may pay dividends or repurchase common stock if we maintain borrowing base capacity of at least $25 million from June 1 to November 30, and at least $35 million from December 1 to May 31, after making the applicable payment. 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, except that the Applicable Margin on the first $25 million of borrowings from August 15 to October 31 of each year, while the temporary increase in our borrowing base is in effect, is 1.00% higher. As of September 30, 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 three months ended September 30, 2008 and 2007, the weighted average annual interest rate on borrowings under our credit facility was 4.1% and 7.2%, respectively.

As of September 30, 2008, we had (i) $229.5 million in borrowings and $4.7 million in letters of credit outstanding under the credit facility, (ii) $323.5million of eligible accounts receivable and inventories available as collateral under the credit facility, and (iii) remaining borrowing availability of $88.8 million.

As of September 30, 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 8 to the 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 5, 2008, our board of directors authorized us to extend our existing $80 million common stock repurchase program through November 30, 2010.  The common stock repurchase program was set to expire November 30, 2008.  As of September 30, 2008, we had repurchased 2,273,038 shares of common stock on the open market under the stock repurchase program, at an average price of $18.18 per share, at a cost of $41.3 million, including sales commissions, leaving $38.7 million available for additional common stock repurchases under the program.  The acquisition of these shares by us was accounted for under the treasury method.  For the three months ended September 30, 2008, we did not repurchase any shares of Common Stock.





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New Accounting Standards



Hierarchy of Generally Accepted Accounting Principles



In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS 162).  SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles.  SFAS 162 is effective 60 days following the Securities and Exchange Commission's approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.  This statement will not have an impact on our consolidated financial statements.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued Statement of Financial Accounting Standards 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 will be effective for us in our fiscal quarter beginning January 1, 2009.  We are 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 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 FASB Staff Position 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 became effective for us on July 1, 2008.  For nonfinancial assets and nonfinancial liabilities, SFAS 157 will be effective for us on July 1, 2009.  The adoption of SFAS 157 did not have a material impact on our consolidated financial statements.  See Note 12 to the 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 became effective for us beginning July 1, 2008.  The adoption of SFAS 159 did not have a material impact on our consolidated financial statements as we did not elect to use the fair value option.





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Useful Life of Intangible Assets

In April 2008, the FASB issued FASB Staff Position No. 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3").  FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142, Goodwill and Other Intangible Assets.  FSP 142-3 is effective on a prospective basis to all intangible assets acquired and for disclosures on all intangible assets recognized on or after the beginning of the first annual period subsequent to December 15, 2008.  Early adoption is prohibited.  We are evaluating the impact, if any, of FSP 142-3 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, 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, 2008:





|* | 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 consumer confidence and demand, such as the current economic downturn;                                                                                                                                                                                                                                                         
|* | 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, such as the Liz Claiborne fragrance 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 Global Efficiency Re-engineering initiative and related 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 September 30, 2008, we had approximately $229.5 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 months ended September 30, 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 months ended September 30, 2008 would have increased or decreased by approximately $0.9 million.  See Note 8 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 months ended September 30, 2008, we derived approximately 37.7% 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  adversely affect our ability to meet our obligations and could adversely affect our results of operations and cash flows used to fund working capital.  Our competitors may or may not be subject to the same fluctuations in currency rates, and our competitive position could be affected by these changes.  The cumulative effect of translating balance sheet accounts from the functional currency into the U.S. dollar at current exchange rates is included in accumulated other comprehensive income (loss) in our consolidated balance sheets.



As of September 30, 2008, we had notional amounts of 49.7 million Euros and 28.3 million British pounds under foreign currency contracts that expire between October 31, 2008 and June 30, 2009 to reduce the exposure of our foreign subsidiary revenues to fluctuations in currency rates.  As of September 30, 2008, we had notional amounts of 7.5 million Canadian dollars under foreign currency contracts that expire between October 31, 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 gain, net of taxes, recognized during the three months ended September 30, 2008 from the settlements of contracts, was approximately $0.3 million.  At September 30, 2008, the unrealized gain, net of taxes, associated with these contracts of approximately $3.9 million, is included in accumulated other comprehensive income (loss) in our consolidated balance sheets.



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 September 30, 2008, there were no such foreign currency contracts outstanding.  The realized gain, net of taxes, recognized during the three months ended September 30, 2008 was approximately $0.8million.



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 Company's 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 functioning effectively.

There have been no changes in the Company's internal control over financial reporting during the Company's most recent fiscal quarter that have materially affected, or are likely to materially affect, the Company's internal control over financial reporting.





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PART II.   OTHER INFORMATION

ITEM 1A.    RISK FACTORS



Risk factors describing the major risks to our business can be found under Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the fiscal year ended June 30, 2008.  There has been no material change in our risk factors from those previously discussed in that Annual Report on Form 10-K.

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, 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 4.6 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, 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 4.6 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, 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 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, JPMorgan Chase Bank, as administrative agent, Bank of America, N. A. (successor in interest by merger to 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, JPMorgan Chase Bank, as administrative agent, Bank of America, N. A. (successor in interest by merger to 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)).           





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|Exhibit
Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.7           |  | Sixth Amendment to Second Amended and Restated Credit Agreement dated as of August 15, 2007, among the Company, JPMorgan Chase Bank, as administrative agent, Bank of America, N. A. (successor in interest by merger to 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)).           
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.8           |  | Seventh Amendment to Second Amended and Restated Credit Agreement dated as of November 13, 2007, among the Company, JPMorgan Chase Bank, as administrative agent, Bank of America, N. A. (successor in interest by merger to 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           |  | Eighth Amendment to Second Amended and Restated Credit Agreement dated as of July 21, 2008, among the company, JPMorgan Chase Bank, as administrative agent, Bank of America, N. A. (successor in interest by merger to Fleet National Bank), as the collateral agent, and the banks listed on the signature pages thereto (incorporated herein by reference to Exhibit 10.1 filed as part of the Company's Form 8-K dated July 21, 2008 (Commission File No. 1-6370)).                          
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.10          |  | 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)).                                                                                                                                                                
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.11          |  | 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)).                                                                                                                                                                                                  
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.12 +        |  | 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)).                                                                                                                                                                                                                 





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---







|Exhibit
Number |  | Description                                                                                                                                                                                                                                                                                                       
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                                                                                                                                                                   
|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)).                                            
|               |  |                                                                                                                                                                                                                                                                                                                   
|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 +        |  | 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)).                                                                                                                
|               |  |                                                                                                                                                                                                                                                                                                                   
|10.31 +        |  | 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.





- 37 -



---





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:  November 7, 2008 |  | /s/ E. Scott Beattie                                
|                        |  |                                                     
|                        |  | E. Scott Beattie                                    
|                        |  | Chairman, President and Chief Executive Officer     
|                        |  | (Principal Executive Officer)                       
|                        |  |                                                     
|Date:  November 7, 2008 |  | /s/ Stephen J. Smith                                
|                        |  |                                                     
|                        |  | Stephen J. Smith                                    
|                        |  | Executive Vice President and Chief Financial Officer
|                        |  | (Principal Financial and Accounting Officer)        
|                        |  |                                                     



- 38 -



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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.





- 39 -



---