Physicians Formula looks to top-line growth in 2010
AZUSA, Calif. Physicians Formula, whose beauty products are sold in 23,700 stores operated by Walmart, Target, CVS and Rite Aid, narrowed its fourth quarter net loss and is optimistic about 2010 as it has rationalized 28% of its SKUs and has a “strong product mix” in the pipeline.
“Although our overall market share decreased as expected versus last year, mainly impacted by the loss of a major customer, we saw an increase in dollar sales for our strategic platforms, including our bronzers, Mineral Wear face powders, and natural and organic products,” stated Ingrid Jackel, chairwoman and CEO. “Having rationalized 28% of our SKUs and with the promising start of our 2010 new products, we believe that we have a strong product mix as we begin 2010 that will enable us to increase both the efficiency of our product set and our market share in our core categories. In fact, after seeing our early 2010 new product sales, we believe we are in a good position to grow our top-line in 2010.”
Net sales for the quarter ended Dec. 31 totaled $22.3 million compared with $28.2 million in the year-ago period. The decrease is primarily due to the previously announced loss of a major customer and lackluster retail POS trends for the masstige cosmetics market in both the United States and Canada.
Net loss for the quarter totaled $2.5 million, or a loss of 18 cents per share, versus a loss of $24.5 million, or $1.80 per share, in the year-ago period.
The current quarter’s net loss includes a $4 million charge from the company’s implementation of a SKU rationalization initiative designed to discontinue slower-selling products. The initiative, which concluded in late December after 2010 plan-o-grams were finalized with its retail partners, resulted in the discontinuation of about 28% of the beauty company’s products as of Dec. 31.
“We believe we adapted well to the challenges we experienced in 2009. Although our top line was negatively impacted during the year, we made significant progress on our business model redefinition by improving our manufacturing efficiencies and diligently managing our general and administrative costs,” stated Jackel. “As a result, we generated $9.4 million of net cash from operating activities for the full year and $3.6 million for the back half.”
Walmart customers get Hard Candy for spring
BENTONVILLE, Ark. Walmart is gearing up for spring with a collection of new Hard Candy beauty products slated to be on shelf the first week of May.
The new Hard Candy makeup products include:
- Hot Smudge: A duo cream eyeliner/smudge shadow housed in a long case with a brush and smudger. The price is $6.
- Meteor Eyes: This is a high-pigment, baked eye shadow that is buildable to create endless looks. It can be used “dry” for a sheer color or “wet” for an intense, dramatic look. The price is $6.
- Powder Keg: These powdery-fine, silky-soft shadows promise to deliver more intense color than pressed or cream eye shadows. The formula is made from pearlized powders. The price is $6.
- Welcome Matte: This is a micro-pigmented pressed powder that promises to eliminate unwanted shine. It includes a mirror and sponge and is priced at $8.
- Moon Glow: This is a multi-tasking translucent powder infused with illuminating gold powder. It includes a mirror and sponge and is priced at $8.
- Take Me Out Liner (glitter): This is a micro glitter-infused eyeliner pencil priced at $5.
- Take Me Out Liner (molten metal): The molten metal eye pencils are available in a rainbow of shades. The color glides on smooth and stays soft and creamy for blending (about 30 seconds), then dries for a long-lasting finish. The price is $5.
In addition to the new makeup, beauty mavens can also buy a 100% nylon Train Case accented with the signature Hard Candy art and customer zipper pulls ($9) or a cosmetic bag that also features the signature Hard Candy styling and zipper pulls ($4).
Solazyme, Unilever pen R&D deal
SOUTH SAN FRANCISCO, Calif. Solazyme, a renewable oil and bioproducts company, has inked a research and development agreement with Unilever to develop oil derived from algae for use in soaps and other personal care products, Solazyme has announced.
“Algal oil provides important benefits in personal care applications,” explained Jonathan Wolfson, CEO of Solazyme. “Solazyme’s algal oils can help meet the growing demand for completely renewable, natural and sustainable personal care products. Unilever is an acknowledged world leader in sustainability and we are honored to be working with them to develop this new renewable source of natural oils for their world class consumer products.”
Solazyme and Unilever are working to demonstrate a process to incorporate targeted algal oils into personal care products at a commercially relevant scale. The work will further develop Solazyme’s technology platform, which allows algae to produce oil and biomaterials in standard fermentation facilities quickly, efficiently and at large scale.
Among other sustainability initiatives, Unilever is exploring various next-generation sources of renewable oil for use in its products. Unilever’s collaboration with Solazyme represents a step in the company’s exploration of algae as a source of renewable oil.
“Unilever is committed to the highest sustainability and environmental practices and is working to drive industry change and set new standards,” added Peter Gallagher, VP global skin R&D, for Unilever. “Exploring sources of alternative natural oils is one of the most important aspects of our greater sustainable sourcing strategy and working with Solazyme’s algal oils is an excellent fit.”