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With retail, image is very important for revenues. J.C. Penney (NYSE:JCP) is losing market share to Macy's (NYSE:M) because Macy's has a classy image as opposed to bargain priced clothing. Skechers (NYSE:SKX) is losing market share to Nike (NYSE:NKE) because cutting corners when it comes to working out is a lazy image. And Aeropostale (NYSE:ARO) is losing market share to Abercrombie & Fitch (NYSE:ANF) because it's a tacky image to sport a huge 11 letter French name across your shirt.

Looking at the big picture regarding potential for a company's products is a great way to predict future success. Investors who only look at recent financial numbers are sometimes missing the forest for the trees. Look at what happened to Research In Motion (RIMM) because the Blackberry couldn't compete.

Investors can be confident that Parlux Fragrances (NASDAQ:PARL) has winning products for long term success.

As I wrote in my previous article on PARL, it has a great balance sheet and price/book ratio. All an investor needs to know is if it can be profitable with its current products and book decent earnings in the next year or two for it to be a great investment.

Parlux Fragrances will be taking market share from other celebrity perfume makers because the company's top three celebrity brands: Rihanna, Paris Hilton and Jessica Simpson, all have a better image than most other celebrity perfumes.

Not all women like perfumes with a celebrity representing them. Many women prefer to just wear a perfume with a reputable brand name like Christian Dior or Estee Lauder. But there is still a huge market for celebrity perfumes.

To buy a celebrity perfume, a woman has to want to take on a little of the personality of that celebrity, and also has to believe that it will make her feel more attractive.

I don't care if a woman looks attractive or not. If she takes on a little of the personality of Rihanna, Paris Hilton or Jessica Simpson, it will increase her attractiveness to men. Therefore, the purchase and use of these perfumes will improve a woman's attitude and sex appeal.

Rihanna is a great one especially for black women. She exudes an image of being powerful and sexually free. Paris Hilton's perfumes have always been top sellers because she has the image of confidence and playfulness and of an elite socialite. Jessica Simpson has a bubbly and carefree country-girl image.

As stated in the Q4 fiscal year 2011 (ended March 31, 2011) conference call, Parlux Fragrances is going full speed ahead promoting these three celebrity fragrances this quarter, especially for Rihanna. Rihanna's Reb'l Fleur perfume debuted last quarter and was very successful. These three perfumes became the top three selling celebrity fragrances at Macys last quarter. Macys is Parlux' biggest customer.

Some of Parlux' marketing tactics are creative and unconventional. The company is showing Rihanna ads in hundreds of movie theaters throughout the country and in some of them will be handing out scent samples. On American Idol, Parlux is doing three commercials per episode, one for Rihanna, one for Paris, and one for Jessica. The company is putting up billboards in selected places in big cities.

Rihana is also popular in other countries. Rihanna is currently doing a world tour and promoting her perfume along the way.

As stated in the Q4 2011 conference call, because of PARL's massive promotional expenses of Reb'l Fleur this quarter, the company is expecting a loss since much of the revenues generated from this campaign won't be realized until later on in the year. However, the company is expecting a breakeven first half of the year, and a profitable total year. It's expecting the second half to produce a gain of $0.30 a share which would be for the year, and total annual revenues of $150 million.

Next year's guidance is higher, as Reb'l Fleur will be sold in more countries, and Kayne West's cologne comes out in the first half of calendar year 2012.. West has a great image for being the type of guy who gets the ladies, and that will ensure good cologne sales.

Since Parlux's celebrity perfumes have image that beats the competition, I expect guidance will be reached.

12 month target price: $4.25.

Disclosure: I am long PARL.

Source: Parlux Fragrances: Popular Perfume Products for a Promising Future