Sales Rise 3% at Physicians Formula

Physicians Formula Holdings reported net sales for the full year 2011 rose 3.1% to $80.9 million. The net sales growth was driven by an increase in gross sales of color cosmetics, launch of the skin care line and a reduction to the returns provision.

The Company also stated that its products achieved 9% point-of-sale growth for the 52 weeks ended December 24, 2011 versus the prior year period, whereas the overall masstige color cosmetics category only grew 3%, both per AC Nielsen food, drug and mass dollar sales data. During the same time period, Physicians Formula was the fastest-growing masstige color cosmetics brand in dollar sales among the major five brands in food, drug and mass.

Ingrid Jackel, Chairwoman and CEO stated, “We are pleased with the execution and results of our 2011 brand investment strategy. The carefully planned spending allowed us to successfully build upon our existing brand awareness and expand our market share of the masstige category. For the year, we were the brand with the greatest increase in dollar market share among the top five brands.”

Gross margin for 2011 improved to 47.2% of net sales versus 45.4% in the prior year period primarily driven by favorable product mix, lower usage of air freight to bring in raw materials and components, and positive manufacturing variances.