Parlux forecasts quarterly drop, share prices fall further

By Simon Pitman

- Last updated on GMT

Related tags Parlux ceo ilia Company Stock market

Fragrance player Parlux Fragrances has delayed the filing of its
first quarter results following its planned share flotation, but
has warned of a big dip in its sales for the period sending share
prices falling.

Parlux filed its quarterly results through an SEC filing on Thursday, causing shares to fall 37 per cent. Since then they have been hovering at around the $5 mark- a figure that contrasts sharply with a share price peak of $19.24 back in February.

Having said that it is delaying its 10-Q filing, the company warned that it was expecting to pay a share dividend of 4 - 5 cents per share, against market expectations of around 20 cents a share.

The company had originally blamed the late filing of its quarterly results on administration work that had to be put in to produce its annual report on time.

Evidently the company's administration team had not been able to keep up with the company's rapid expansion over the course of the last year.

Parlux published its annual report on July 28, which showed that net sales for the year had more than doubled from $47.44m in 2005, to reach $111.77 in the corresponding year up to March 31 2006.

But with the profit warning the company is giving for the most recent quarter, it seems that it is about to experience an about turn in its fortunes.

The company said the lower sales were attributable primarily to weak sales at department sales and other associated outlets.

News of the company's slowing performance follows an announcement back in June that company executives wanted to privatize the business.

In mid-June Parlux CEO Ilia Lekach made an unsolicited offer to buy back the company shares at $29 in a bid to fend of the threat of short-term investors.

The announcement followed what Lekach termed 'disruptions' from short sellers, which he claims had damaged the company's investment potential. A month later Lekach withdrew his share buyout offer on the back of pressure from shareholders, causing share prices to plummet still further.

Market analysts and observer now believe that the company may be sold off brand-by-brand, a move that would undoubtedly lead to a flurry of interest in its flagship Paris Hilton fragrances.

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