Guess and Hilton drive huge jump in Parlux profits

By Simon Pitman

- Last updated on GMT

Related tags: Paris hilton, Generally accepted accounting principles, Macy's

Parlux Fragrance has reported a 74 per cent jump in profits on the
back of the continued roll out of Paris Hilton branded goods
together with the success of new fragrances such as Guess? for
women.

Net sales for the quarter increased by 47 per cent to reach $33.8 million, compared to almost $23 million in the same quarter a year earlier. This figure helped to increase net profit from $3.8 million compared to $2.2 million a year earlier.

Operating income grew by 74 per in the quarter to reach $6.1 milion reflecting the continued strong performance of the company's established fragrances and Paris Hilton accessories such as handbags, watches and cosmetics. Reflecting this, sales and distribution costs rose by just 33 per cent to reach $2.3 million.

As well as the continued increase of its leading brands and the new roll out, the company also said that its core business had remained strong, with licensing agreements for the Ocean Pacific, XOXO and Andy Roddick brands continuing to be a driving force.

Ilia Lekach, Parlux​ CEO said: "Our Paris Hilton production introductions continue to be very well received, and our Guess? product has surpassed all expectations. We have effectively achieved our guidance for the first quarter of fiscal 2006, and remain confident that we will achieve our full fiscal year guidance of $190-$210 million in sales… assuming the continued acceptance of our new product launches and stable economic conditions."

Parlux's most recent launch has been its Guess? fragrance, which is being distributed in 2,025 department store doors in the US from July to September. According to the company it has achieved top ten ranking across all accounts launched to date, including the number one spot at Robinsons-May, Foley's and Macy's Florida.

The line also launched in 90 Guess? free-standing retail stores in the US and its success in those locations which Parlux says has prompted an expansion to the full chain of approximately 190 retail doors.

Lekach said that the launch was the most successful the company had ever experienced, even topping the phenomenal success of the Paris Hilton brands. This, he said, is expected to be further boosted by the international roll-out of the fragrance as well as the introduction of the men's Guess? line in spring next year.

Paul Marciano, Co-CEO at Guess?, commented: "The initial success of the launch has taken us somewhat by surprise, as we achieved Top Ten rankings even before the advertising and promotion commenced. In our own stores, we virtually sold out of the initial product purchases within three days, prompting us to place reorders as well as expand distribution to all of our retail stores."

Related topics: Business & Financial, Fragrance

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