Hit by department store discounting over US holidays
Parlux Fragrances, which creates scents for Paris Hilton, Jessica Simpson and Rihanna’s fragrance lines, has announced results for the third quarter and nine months ended 31 December, 2011. Net sales for the three month period were $31.9mn, compared to $31.4mn in the prior year period, an increase of 2%. Meanwhile, net sales for the nine month period amounted to $100.9mn, up 7% on the same period of 2010.
Results for the three and nine month periods include one time costs of approximately $1.0mn and $1.5mn, respectively, in connection with the proposed merger with Perfumania Holdings.
Commenting on the results, chairman and ceo Fred Purches said: "To counter what was expected to be a strong competitive environment, we entered the US holiday period with strong promotional gift set inventories at the retailer level. After Thanksgiving, department stores struggled to reach sales goals and countered by discounting virtually all products, with the exception of fragrances and cosmetics, by 40-60% and more, in some cases. As a result, our sell through did not meet expectations and we have made provisions in the third quarter to accept approximately $3.0mn in additional returns than originally estimated.”
He added: "In view of the continuing volatility of the US retail situation, we have reduced our net sales estimate for the fiscal year ending 31 March, 2012 to $135-$140mn, which would still mean double digit growth versus the prior year.”