Physicians Formula plummets on guidance downgrades for Q2 and FY07
Physicians Formula Holdings, Inc. (Nasdaq: FACE) tumbled to a 52-week low Tuesday after the personal care products maker cut its guidance for the second quarter of 2007 and the full fiscal year.
Shares fell 25.3%, or $4.02, to close at $11.88, before establishing a low for the year of $11.88.
For the second quarter ended June 30, 2007, Physicians Formula now expects to book net sales in the range of approximately $21 million to $22 million, a decrease of 5% to 9% from $23.1 million for the same period last year. This compares with the previous net sales outlook of approximately $24.5 million to $25.5 million.
The California-based company expects to record a net loss per diluted common share for the second quarter in range of $0.07 to $0.04, compared with the previous outlook of a loss in the range of $0.04 to $0.01 per diluted common share. Three analysts polled by Thomson Financial expected $0.00 per share for the second quarter.
"Even though we achieved gross sales growth … for the first six months of 2007 and we continue to expand our market share in the masstige market, our updated outlook for net sales and earnings in the second quarter of 2007 is lower than we previously expected,” said Physicians Formula CEO Ingrid Jackel.
Jackel cited waning industry growth on account of softer consumer spending, a decline in promotional pre-packs purchases from a top retailer, and a reduction in sales from a shift in “plan-o-gram” set ups as the main reasons for the company’s dreary outlook.
The company also gave guidance for the fiscal year. For the fiscal year ended Dec. 31, 2007, Physicians Formula anticipates net sales to be in the range of $110 million to $115 million compared with previously forecasted net sales of between $113 million and $116 million. The company expects net income per diluted common share to be in the range of $0.58 to $0.67 compared with previous estimates of between $0.67 and $0.72. Four analysts polled by Thomson Financial expected EPS of $0.71 per share for the fiscal year.
Physicians Formula manufactures and distributes cosmetics including face powders, bronzers, concealers, blushes, foundations, eye shadows, eye liners, brow makeup, and mascaras to various retailers in the food retail, drug chain, mass volume, specialty retail, and wholesale channels.
