Gary Giblen, analyst with Brean Murray, downgraded the company's rating from a 'strong buy' to 'accumulate', while JPMorgan's Dara Mohesenian downgraded from 'neutral' to 'overweight'.
Murray said that the downgrade was attributable to the recent performance and market conditions, while Mohsenian cited a run-up on Arden's stock price, which has been steadily rising since the beginning on the year.
Since the analysts' made the downgrades last week, share prices have dipped around 4 per cent, but have since rallied and have recovered by a further 3 per cent to reach $22.38.
Elizabeth Arden has struck with a series of high profile launches in recent months, including a fragrance sponsored by Hilary Duff and an anti-aging line called Prevage - a physician-strength topical antioxidant containing 1 per cent idebenone.
The company had been hoping that the launch of these two new lines would do much to boost its position in an ultra-competitive market, particularly in the US, where both anti-aging and celebrity sponsored perfumes are two of the fastest growing sectors.
According to the latest market report from the Freedonia Group, this demand for anti-aging products in the US is likely to trigger an 8.7 per cent annual increase, which should give the category a total value of $30.7 billion by 2009, compared to an estimated value of $20.2 billion in 2004.
Likewise the market for celebrity fragrances is frantic, with the majority of Hollywood A-list seemingly involved in some sort of sponsorship right now. But with the popularity of such figures often changing rapidly, this category can also prove to be volatile.
Right now Elizabeth Arden has the rights to market Britney Spears fragrances, which have proved to be category leaders, but with the launch of a third fragrance bearing her name, analysts have said that this could ultimately jeopardise future sales.
Likewise, it seems that all the other majors players are chasing growth in both the celebrity fragrance and anti-aging categories, which is making carving out a slice of the sales an increasingly difficult job.
The unpredictability of these market categories suggests that, just as important as developing an appealing product, marketing it in the right way is an just as important.