Physicians Formula Holdings Inc. reported a fourth-quarter loss of $24.5 million, or $1.80 a diluted share, compared with profits of $4.9 million, or 33 cents a share, in the year-ago period, citing retailers’ ongoing grip on inventory control — and shoppers’ grip on their wallets.
This story first appeared in the April 1, 2009 issue of WWD. Subscribe Today.
During the quarter, the company recorded noncash goodwill and intangible asset impairment charges of $32.7 million as of Dec. 31, or $1.93 per diluted share, net of tax, which dragged down earnings somewhat. Excluding these charges, adjusted net income per diluted common share was 13 cents for the fourth quarter.
The mass-market cosmetics firm, a leader in mineral makeup, reported sales slid 16.8 percent to $28.2 million during the quarter ended Dec. 31, from $33.9 million in the year-earlier period.
For the full year, Physicians Formula reported a loss of $19.8 million, or $1.41 a diluted share, compared with income of $8.7 million, or 60 cents a share, in 2007. Annual sales increased 2.2 percent to $114 million from $111.5 million.
Citing ACNielsen retail sales data, Physicians Formula said it held an 8 percent market share of the masstige market for the year ended Feb. 21, a category the firm defines as premium-priced products sold in the mass market. For the same period ended a year ago, the firm noted, its share of masstige was 7.9 percent.
“During the first quarter of the year, retailers continue to operate under unprecedented tight inventory control programs and, in addition, we are experiencing smaller pipeline orders compared to last year’s larger pipelines from space gains,” noted Ingrid Jackel, the firm’s chairman and chief executive officer. “We expect 2009 will continue to be a very challenging retail environment for our industry. To weather the current economic turmoil, our low-cost business model, coupled with prudent cash management, has provided the financial ability to sustain some of our core 2009 initiatives while developing, presenting and executing on our 2010 plans.”