Parlux underlines lower sales expectations

By Simon Pitman

- Last updated on GMT

Related tags: Generally accepted accounting principles

Fragrance giant Parlux has clarified comments made by its CEO
in a recent conference call, stressing that sales expectations for
the quarter ending June 30 will be lower.

In the original conference call on June 6, Parlux CEO Neil Katz had said that the outlook for the company was likely to deteriorate mainly due to the fact that the company's inventory levels would have to be adjusted. "We might see a flattening [of sales] from year to year… in trying to get the inventory [levels] down considerably, we over-corrected and we are short on a lot of items that are by requested of us by our business partners,"​ he said. Inventory shortages a temporary problem​ The most recent announcement aims to clear up what the company describes as ambiguities derived from the interpretation of this original quote from the conference. In its latest statement, the company reiterated that inventory shortages were likely to affect its latest quarter, but also underlined that the company does have a significant level of orders on hand. This means that its lower sales expectations are not because demand is falling, but because it is unable to keep up with current demand due to low inventory levels. However, the company says that those sales should be made up for in the second quarter of fiscal 2009, when the inventory shortages are expected to be corrected. Sales for full year still set to climb ​ The company believes that because of this gain in sales for the forthcoming quarter its sales and net income for the full financial year will still 'significantly exceed that of the prior year'. "During our conference call, we expressed our concern about inventory production to meet demand for the fiscal quarter ending June 30, 2008,"​ said Katz. "It has now become apparent that, although production continues at full capacity at our contract fillers, sufficient product will not be available to fulfill all orders within requested ship dates of June 30 or prior." ​ The company says that demand for its flagship fragrances Paris Hilton and Guess? remain very strong and that future orders will be shipped early in the second quarter.

Related topics: Business & Financial, Fragrance

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