This morning I sent an e-mail to the top three executives at PARL. It was a follow-up to the one I sent to them a few weeks ago and was never answered by any of them.
In calendar year 2009, PARL management has made the following predictions about sales:
1. That 2010 sales would exceed 2009 FY sales by ten percent, putting them at roughly $165 million.
2. That FY 2010 second quarter sales would exceed those of the year before in real terms. They did.
3. That all annualized G? revenues lost after 12/31/09 would be replaced by those from new products launched during the current calendar year. This was stated in both this week's press release and yesterday's conference call.
4. That FY 2010 third quarter sales would exceed those of last year. This was said in yesterday's conference call.
PARL management continues to make vague estimates--at best--about the company's near to mid-term profitability. One would assume this is due to the uncertainties surrounding the economy.
But what item would be most hard to predict in an uncertain economy? Wouldn't it be sales revenues? Yet PARL management seems to have no problem predicting minimum amounts of revenue from sales in several areas.
PARL management should be able to predict profitablilty (and probably can with considerable accuracy)ASSUMING certain levels of sales. The fact that they choose not to make such predictions is troubling, at best.
Unless PARL has sales for the 2010 FY well in excess of $165 million, my guess is that it will not earn $.20 per share. Since PARL would do well to duplicate this year's sales in the 2011 fiscal year, it probably won't earn more than $.20 per share during that fiscal year.
PARL will have heavy advertising expenses this year and next associated with its new fragrance launches. PARL management alluded to this fact yesterday.
But PARL will also continue to have for the foreseeable future, heavy promotional expenses at department stores in the form of in-store sales representatives. THIS is why PARL's new fragrances get accepted by the department stores.
PARL serves three masters: its fragrance signees, department stores and its shareholders. The "A" in A&P is meant to fulfill obligations PARL has to fragrance signees. The "P" in A&P is for department stores to accept PARL's new fragrances. That's not leaving much for the shareholders.