08.08.08
For the three months ended June 30, 2008, net sales declined 26% to $23.3 million at Parlux Fragrances, Inc.
According to the company, the decline in sales was due to the inability to fill customer orders timely as increased demand for certain key products exceeded expected production. Additionally, unanticipated delays in obtaining critical components—particularly plastics and glass—restricted production capabilities, further delaying shipments. Net loss was $4.8 million, compared to a loss of $97,628 in the same period of the prior year.
Mr. Neil J. Katz, chairman and chief executive officer, said in a statement to the press, "Our shortfall in sales this quarter was due to our inability to ship approximately $8 million in orders due to unavailable inventory. We had strategically reduced inventory levels during our last fiscal year expecting that our suppliers could timely replenish components, which they were not able to do. This problem was compounded by our strong sales performance in our fourth quarter of fiscal 2008 for certain key products. We, however, expect to recover the sales shortfall over the next quarter."
He added, "Our sales shortfall is not an indication of the demand for our products and U.S. department store retail sell-through, which remains strong and far ahead of last fiscal year despite the difficult retail environment. Our promotional spending during the first quarter increased sell-through of our Paris Hilton and Guess brands, which we believe will result in higher orders for the important upcoming holiday season. The inventory shortage will not affect the initial orders for Jessica Simpson's 'Fancy,' which recently commenced shipping, nor for our new Paris Hilton fragrance 'Fairy Dust' which will ship in September.
"In spite of our first quarter production difficulties, it is our expectation that sales for the current quarter and sales and profit for the full fiscal year will significantly exceed those of the prior year comparable periods.”
According to the company, the decline in sales was due to the inability to fill customer orders timely as increased demand for certain key products exceeded expected production. Additionally, unanticipated delays in obtaining critical components—particularly plastics and glass—restricted production capabilities, further delaying shipments. Net loss was $4.8 million, compared to a loss of $97,628 in the same period of the prior year.
Mr. Neil J. Katz, chairman and chief executive officer, said in a statement to the press, "Our shortfall in sales this quarter was due to our inability to ship approximately $8 million in orders due to unavailable inventory. We had strategically reduced inventory levels during our last fiscal year expecting that our suppliers could timely replenish components, which they were not able to do. This problem was compounded by our strong sales performance in our fourth quarter of fiscal 2008 for certain key products. We, however, expect to recover the sales shortfall over the next quarter."
He added, "Our sales shortfall is not an indication of the demand for our products and U.S. department store retail sell-through, which remains strong and far ahead of last fiscal year despite the difficult retail environment. Our promotional spending during the first quarter increased sell-through of our Paris Hilton and Guess brands, which we believe will result in higher orders for the important upcoming holiday season. The inventory shortage will not affect the initial orders for Jessica Simpson's 'Fancy,' which recently commenced shipping, nor for our new Paris Hilton fragrance 'Fairy Dust' which will ship in September.
"In spite of our first quarter production difficulties, it is our expectation that sales for the current quarter and sales and profit for the full fiscal year will significantly exceed those of the prior year comparable periods.”