Parlux continues run of strong growth
experts after reporting a 38 per cent rise in net profits for its
fourth quarter earnings on the back of a 32 per cent hike in sales
- thus proving that major licensing agreements with the likes of
Paris Hilton are not just a fad, reports Simon Pitman.
For the quarter ending March 31 Parlux reported net income rose to $3.4 million from $2.5 million in the corresponding quarter for 2004, while sales for the same period rose from $19.6 million to $25.9 million.
The figures represent some of the company's strongest growth to date, and with other licensing agreements with names such as XOXO, Ocean Pacific and the Guess brand coming to fruition during the course of the year, the company is predicting that is well on course to exceed its financial predictions for the year ahead.
Net sales for the full year to March 31, 2005 reached $100.3 million compared to $80.5 million for the prior year, an increase of 25 per cent. Net income increased 73 per cent to $10.8 million, compared to $6.2 million, for the prior year.
Before the financial results were published analysts had already rated Parlux shares as a buy in view of the company's continued strong performance and its current portfolio of licensing agreements. Wedbush Morgan Securities recommended the shares as a buy on May 24, after which shares jumped over 13 per cent.
Ilia Lekach, chairman and CEO said of the results, "We view our attainment of the $100 million sales level as a first step to significantly increase revenues for fiscal 2006. The success of our Paris Hilton fragrance, the continued growth of our core Perry Ellis brand, and the recent addition of the XOXO brand have provided a solid platform for our new GUESS? fragrance launch in July and the launch of our Maria Sharapova fragrance scheduled for September."
Last June Parlux penned a deal that tied Paris Hilton into promote perfumes and luxury goods bearing her name for the next four years. The deal was certainly a wise move. Of its $100 million sales last year, $11 million was derived from Paris Hilton lines. As part of the deal Hilton receives 5 per cent of the royalties from all of the sales.
Lekach also commented on the continued growth of its endorsement of branded goods, which marks a shift away from its core fragrance focus. Luxury handbags and watches bearing the Paris Hilton name were said to have proved particularly successful during the course of the last two quarters.
"I continue to be optimitistic that our previous guidance of $190-210 million and earnings per share between $2.00 and $2.20 for the entire year will be achieved assuming the implementation of our planned launches and stable economic conditions," he added.