NEW YORK — Net income of fragrance marketer Parlux fell 20 percent to $3.5 million in the second quarter ended Sept. 30, from $4.4 million in the same period a year ago, due to lower gross margins and expenses such as royalties, warehousing and interest, the firm said this week.
The company’s recent sale of the Perry Ellis fragrance business to Perry Ellis International Inc. for more than $60 million, however, “leaves Parlux well positioned to enhance value for shareholders,” chairman and chief executive officer Ilia Lekach said in a statement.
Meanwhile, Perry Ellis said it was close to finding a new licensee — citing “several parties” — for its fragrance, skin care toiletries and cosmetics business. It added, however, that “further details” would not be discussed until agreements are signed. Perry Ellis projects a new fragrance licensing agreement will be accretive starting in fiscal 2008.
Parlux’s second-quarter expenses were partly offset by its $1.8 million gain from the sale of an investment in E Com Ventures Inc., the fragrance firm noted. Sales in the second quarter reached $39.1 million, a 1 percent dip from $39.3 million in the year-ago period. The company markets fragrances under such brands as Paris Hilton, Guess, XOXO, Ocean Pacific, Maria Sharapova, Andy Roddick, Baby Gund and Fred Hayman Beverly Hills.
Parlux, which reported selected financial results Tuesday, said it experienced a net loss of $10.6 million for the first half, compared with net profits of $8.3 million in the same period a year ago. It attributed the loss to a share-based compensation charge of about $16.2 million relating to a stock split in June of last year.
Sales in the first six months rose 9 percent to $79.8 million from $73.1 million in the year-ago period.
Parlux added that it is investigating a class action suit filed against the company, which it claimed delayed a financial filing for the second quarter ended Sept. 30. The delayed 10-Q filing resulted in a notice in November from the Nasdaq stock exchange that Parlux shares were subject to delisting. The firm dismissed the lawsuit as “without merit.”
Shares of Parlux traded in the $5.90 to $6.16 range Wednesday, and were up 1.16 percent to close at $6.10.
Beiersdorf Operating Profits Increase
BERLIN — Beiersdorf Group reported strong operating profits for 2006.
With the release of preliminary figures Tuesday, the Hamburg-based firm announced aftertax profits of 385 million euros, or $485.1 million at average exchange, or about 7.5 percent of sales, from 335 million euros, or $422.1 million, or 7 percent of sales, the year before.
Beiersdorf’s sales rose by 7.2 percent and earnings before interest and taxes reached 590 million euros, or $743.4 million, last year, from 531 million euros, or $669.1 million, in 2005.
The consumer division, which includes body and facial care under the Nivea, Labello, Juvena, Florena, La Prairie and Eucerin brands, saw sales growth of 7.1 percent to 4.33 billion euros, or $5.46 billion. The consumer division’s EBIT reached 520 million euros, or $655.2 million, compared to 470 million euros, or $592.2 million, in 2005.
Beiersdorf trumpeted success from all regions, in particular in Eastern Europe, Latin America and Africa/Asia/Australia, where double-digit growth was recorded.
The company plans to confirm final figures at the end of February. The group’s chief executive, Thomas-Bernd Quaas, welcomed the 2006 results.
“The extremely successful end-of-year results for 2006 have given us a solid basis for continuing our consumer business strategy,” he said.— Damien McGuinness
CVS Addresses Merger Dispute
NEW YORK — CVS Corp., which expects its merger with pharmacy benefits manager Caremark Rx Inc. to close later in the first quarter, responded to a lawsuit filed Wednesday by Express Scripts, the hostile bidder attempting to break up the merger.
“This is just another desperate attempt by Express Scripts to derail a merger that not only has the complete support of both the CVS and Caremark boards, but also has received strong support from customers and employees of both companies,” CVS said in a statement Wednesday afternoon.
Express Scripts filed suit in Delaware court in an effort to void a $675 million breakup fee in Caremark’s merger agreement with the drugstore chain, according to media reports.