Parlux Posts 6% Gain in Recent Quarter

Parlux Fragrances, Inc.’s preliminary net sales for the quarter ended December 31, 2008 rose 6% to $47.3 million. Preliminary net sales for the nine months ended December 31, 2008 increased 9% to $123.0 million.

Domestic department store net sales for the quarter exceeded net sales for the same period of the prior year by approximately 82%, while sales to international customers decreased approximately 34% during the quarter.

For the nine months ended December 31, 2008, domestic department store and international distributor sales increased by approximately 81% and 20%, respectively.

Domestic department store sales during the nine months ended December 31, 2008 includes approximately $14.9 million in sales of the new Jessica Simpson fragrance, Fancy, which launched during August 2008, and approximately $7.5 million in sales of the new Paris Hilton fragrance, Fairy Dust, which began shipping in late September 2008.

Sales to its related party, Perfumania, for the nine months ended December 31, 2008 are down by approximately 39% from the comparable prior year period, decreasing from $47.8 million to $29.1 million.

“During this last quarter we anticipated significantly higher sales and committed our spending accordingly. However, we were not immune to the current global economic climate,” said Neil J. Katz, chairman and CEO. “During the past five weeks of the quarter, retailers experienced a significant drop in consumer business and re-orders were negatively affected. In the domestic market, we benefitted from the investments we made with our promotional activities and in our domestic sales force, increasing our market share and achieving an 82% increase in sales to domestic retailers, coupled with excellent sell-through despite the difficult conditions.

“However, on the international front, recessionary economic conditions and the volatile U.S. dollar led to a significant decrease in our international sales,” he continued.” On a positive note, shipments and sell-through of the new Jessica Simpson line, Fancy, and the new Paris Hilton Fairy Dust fragrance have strengthened our position in the U.S. department stores.”

Due to the decline in sales during the last few weeks of the quarter, Parlux has implemented steps to reduce costs, and continues to review all areas of operation for fiscal 2010, while focusing on the long-term growth of the company.

“The benefit of these cost reductions will be realized during our fourth quarter and into our next fiscal year,” concluded Mr. Katz.