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Perfumania Holdings Inc. Reports Operating Results (10-Q)

September 13, 2010 | About:
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10qk

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Perfumania Holdings Inc. (PERF) filed Quarterly Report for the period ended 2010-07-31.

Perfumania Holdings Inc. has a market cap of $69.13 million; its shares were traded at around $7.71 with and P/S ratio of 0.14. Perfumania Holdings Inc. had an annual average earning growth of 3.4% over the past 10 years.

Highlight of Business Operations:

Retail sales decreased by 1.5% from $72.8 million in the thirteen weeks ended August 1, 2009 to $71.7 million in the thirteen weeks ended July 31, 2010. The decrease was due to a decrease in Perfumanias retail sales of $1.0 million and a decrease in SOWs consignment sales of $0.1 million.

Selling, general and administrative expenses include payroll and related benefits for our distribution center, sales, store operations, field management, purchasing and other corporate office and administrative personnel; rent, common area maintenance, real estate taxes and utilities for our stores, distribution center and corporate office; advertising, consignment fees, sales promotion, insurance, supplies, freight out, and other administrative expenses. Selling, general and administrative expenses decreased by $0.2 million from $38.7 million in the thirteen weeks ended August 1, 2009 to $38.5 million in the thirteen weeks ended July 31, 2010. Included in selling, general and administrative expenses are expenses charged by Quality King, which were $0.8 million for both the thirteen weeks ended July 31, 2010 and August 1, 2009.

Retail sales increased by 1.2% from $135.9 million in the twenty-six weeks ended August 1, 2009 to $137.6 million in the twenty-six weeks ended July 31, 2010. The increase was due to an increase in Perfumanias retail sales of $4.3 million offset by a decrease in SOWs consignment sales of $2.6 million.

Net cash used in operating activities during the twenty-six weeks ended July 31, 2010 was approximately $26.3 million compared with approximately $49.0 million provided by operating activities during the twenty-six weeks ended August 1, 2009. The $75.3 million decrease in cash flows from operating activities in the current year-to-date period from the prior years comparable period resulted primarily from increases in inventory to build for this years holiday season. Accounts payable-affiliates decreased due to the timing of payments to our affiliates. The seasonality of our operations may lead to significant fluctuations in certain asset and liability accounts between fiscal year-end and subsequent interim periods.

Net cash used in investing activities was approximately $1.3 million in the twenty-six weeks ended July 31, 2010 compared to $4.9 million in the twenty-six weeks ended August 1, 2009. The current periods investing activities primarily represented spending for renovation of existing stores and new stores that either opened or were under construction during the twenty-six weeks ended July 31, 2010 as well as information technology enhancements. During the twenty-six weeks ended July 31, 2010, Perfumania opened two new stores and closed five stores compared with 13 new store openings and three store closings during the comparable period last year. In addition, during the twenty-six week period ended August 1, 2009, we purchased three retail stores from an unrelated party for $1.5 million. We plan to open approximately two stores and six seasonal locations for the remainder of fiscal 2010 and plan to close approximately three stores.

Net cash provided by financing activities during the twenty-six weeks ended July 31, 2010 was approximately $27.2 million, primarily from net borrowings under our credit facility, compared with approximately $45.7 million used in financing activities for the twenty-six weeks ended August 1, 2009. The $72.9 million in cash flows from financing activities in the current year-to-date period from the prior years comparable period resulted from increases in net borrowings to fund the increase in inventory for this years holiday season.

Read the The complete Report

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