Beauty Beat: Physicians Formula Posts Loss… Acqua di Parma for Men…
Physicians Formula Holdings Inc. experienced a net loss of $523,000, or 4 cents a diluted share, during the second quarter due to a noncash charge tied to after-tax, stock-based compensation and a onetime secondary equity rights offering.
NEW YORK — Physicians Formula Holdings Inc. experienced a net loss of $523,000, or 4 cents a diluted share, during the second quarter due to a noncash charge tied to after-tax, stock-based compensation and a onetime secondary equity rights offering. During the same period a year ago, net profits were $1.6 million, or 14 cents a diluted share.
Citing softness in consumer spending, the company reported that net sales dipped 4.2 percent to $22.1 million from $23.1 million in the year-earlier period, and were in line with the company's outlook. The Azusa, Calif.-based firm said the decrease in net sales was primarily due to an increase in cooperative advertising spending and markdowns related to planogram resets. The company's gross sales increased to $33 million from $30 million.
For the first half, net income decreased to $3.8 million, or 26 cents a diluted share, from $4 million, or 35 cents a share, in the prior year, on net sales that gained to $57.8 million from $50.8 million.
Physicians Formula chief executive officer Ingrid Jackel said the tightening of consumer purse strings, a decline in promotional prepack orders from a top retail customer and a collective move by retailers to trim inventory levels negatively impacted the beauty firm's second-quarter results. The company clarified that the change in inventory management did not impact the brand's in-store space.
Jackel declared, "The Physicians Formula brand continues to gain masstige market share and to outperform its peers." For the 52-week period ended July 14, sell-through data at food, drug and mass retailers indicated that Physicians Formula sales gained 15 percent over the year-earlier period, compared to 2 percent growth in the overall premium category, according to ACNielsen, as provided by Physicians Formula.
Jackel said that beginning in December, the company will begin to ship upcoming products, which are said to include a new line, to U.S. retailers. She also reported that the company's infomercial — which will feature a kit of Physicians Formula's Mineral Wear products along with a $5-off coupon redeemable at retail — will begin in early 2008 provided testing shows the 30-minute spot results in a sales lift at retail. "We think of it as a tool to drive retail sales," said Jackel, referring to the infomercial.Due to a change in inventory replenishment patterns and a pullback in consumer spending, the company lowered its full-year forecast. For the fiscal year ended Dec. 31, 2007, the company now anticipates net sales of about $107 million to $111 million, an increase of approximately 12 to 16 percent over the prior year.— Molly Prior
Acqua di Parma for Men
PARMA, Italy — Acqua di Parma, which is nine years shy of its 100th birthday, is set to launch Colonia Intensa, its first eau de cologne for men.
The brand, founded here in 1916, is owned by LVMH Moët Hennessy Louis Vuitton and the Acqua di Parma fragrance portfolio includes the classic unisex colognes Colonia and Colonia Assoluta, and Iris Nobile, a women's scent. Gabriella Scarpa, international president of Acqua di Parma, said Colonia Intensa rounds out the collection of fragrances marketed by the brand.
"We wanted to complete the offer by creating a cologne, its connotations being purely masculine," Scarpa said during an interview.
While Colonia Intensa will be launched in 1,500 doors beginning next month, selected doors will carry the new scent for an exclusive sales preview starting this month. Stores getting the scent this month include the Acqua di Parma boutique in Milan and Bergdorf Goodman in New York. Neiman Marcus stores in Florida will get the scent Aug. 19.
Industry sources estimate first-year retail sales of the scent could hit $20 million worldwide.
Scarpa said she expects the U.S. market to do well, following sales growth of 50 percent in the U.S. last year compared with 2005. Other key markets for the scent, she noted, will be Italy, the U.K., Germany, France and Spain.
Colonia Intensa was blended by perfumer François Demachy, who said he was inspired by the Mediterranean.
"We used a new scent molecule for leather that was recently developed, which has a smell that evokes memories of leather," Demachy said. The leather note is combined with cedar wood, gaiac wood and patchouli in the scent's base, while the heart of Colonia Intensa boasts a combination of myrtle, Artemisia and neroli. The scent has top notes of Calabrian bergamot, Sicilian lemon, cardamom and ginger.Colonia Intensa will be available in two sizes, a 50-ml. version for $71, and a 100-ml. flacon for $109. An accompanying bath-and-body line includes aftershave balm, 100 ml. for $67; shampoo and shower gel, 200 ml. for $43, and a deodorant spray, 150 ml. for $37.
The fragrance's flacon is a reinterpretation of the classic Colonia bottle. It is topped with a bronze-colored cap and bronze rectangular label bearing the fragrance house's name, emblem and the scent's moniker.
Acqua di Parma also has its eye on the spa sector for 2008. The brand will develop a spa line from its Blu Mediterraneo line, and will also dip its toe in the spa business. Together with Spa Chakra, Acqua di Parma plans to open spas in Italy and other yet-to-be-named locations in 2008. — Stephanie Epiro
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