“Masstige” brand Physicians Formula Holdings, Inc. posted a drop its preliminary net sales for the three months and fiscal year ended Dec. 31, 2008. The company noted that since early November 2008, the consumer environment has weakened at a faster pace than previously anticipated and tight inventory control by retailers reduced the expected pipeline orders for new products.

As a result, shipments lagged retail sales for the fourth quarter of 2008. Net sales for the fourth quarter of 2008 are currently estimated to be between $27.1 million and $29.1 million, compared to net sales of $33.9 million for the same period in 2007.

Net sales for the full year 2008 are estimated to be between $112.9 million and $114.9 million, compared to net sales of $111.5 million for the fiscal year 2007. The company’s previous fiscal year 2008 outlook for net sales was in the range of $120 million and $123 million.

The company also noted that for fiscal year 2008, net cash provided by operating activities is estimated to be between $11.5 million and $13.0 million, compared to $1.2 million for fiscal year 2007.

“Despite an extremely challenging environment in 2008, industry point-of-sale data shows that our retail sales continued to grow when compared to 2007 and we expect to report an increase in net sales for the full year 2008,” stated Ingrid Jackel, company chairwoman and chief executive officer of Physicians Formula.

Based on retail sales data provided by ACNielsen, the company’s approximate share of the masstige market was 8.1% for the 52 weeks ended Dec. 27, 2008 compared to 7.9% for the same period in the prior year. This represents a 2.5% increase in Physicians Formula’s share of the masstige market, or a 7% increase in dollar sales, compared to growth of 4% for the overall masstige market during this period.