Elizabeth Arden Inc. said Monday its board is exploring strategic alternatives, as the beauty products company reported steep sales declines and a wider loss.

Shares of New York-based Elizabeth Arden plunged 16% in after-hours trading, erasing gains chalked up after a South Korean cosmetics company in April said it was considering a takeover bid for the company, which makes and sells perfumes and cosmetics in a wide range of stores.

The shares ended up 66 cents at $35.63 on Monday before tumbling to $29.91 after Elizabeth Arden released its results following the market's close.

The company said it has hired Goldman Sachs Group Inc. help its board of directors explore options to improve shareholder value and grow its brands. Executives declined to say if the move was in response to an approach by LG Household & Healthcare Ltd., an LG Group affiliate, which had said it was considering a bid.

Elizabeth Arden has struggled in recent quarters to staunch sales declines following a slowdown in sales of celebrity fragrances in mass retailers such as Wal-Mart Stores Inc. The beauty company's pricier perfumes sold at its namesake counters in department stores have done better, though overall sales of its products at department stores were also down for the quarter.

Overall, Elizabeth Arden's sales for the three months to March slumped 20% to $210.8 million, and executives blamed weak store traffic in the U.S. and store closings that were the result of bad weather. Sales of celebrity fragrance brands named after Justin Bieber and Taylor Swift, which did well in previous years, were also weak.

Overseas sales of the company's products were also hurt, as Elizabeth Arden cut shipments to some international distributors to preserve its pricing and margins amid heavy promotional activity, Chief Executive E. Scott Beattie said.

Overall, Elizabeth Arden reported a net loss of $26.4 million, versus a year-earlier loss of $1.3 million.

Mr. Beattie said the quarterly results were "obviously disappointing" and the company is trying to turn its business around with the help of a restructuring plan and new product launches planned in the coming months.

Elizabeth Arden, whose products also include Prevage antiaging cream and its namesake brand of perfumes, earlier this year had tempered expectations for the fiscal year because of declining sales and deep discounting.

Write to Anna Prior at anna.prior@wsj.com and Serena Ng at serena.ng@wsj.com

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