Interparfums: profits up 16% at the start of the year

Interparfums, a developer and distributor of branded perfumes (mainly under licence, for brands such as Jimmy Choo, Montblanc, and Coach) has reported slightly better results than expected for the first half of the year, however, it has not increased it global profit targets.


Coach, with its men's fragrance Coach Platinium (pictured), is part of Interparfums' portfolio - Interparfums-Coach

In a public statement released on Thursday, the business reported a net profit of €25.2 million, a 16 percent year-on-year increase for the first half, while analysts at Factset had penned their estimates at €23 million.

Interparfums explained that it was able to take advantage of lower tax rates in the US, facilitated by the tax reform that came into effect on January 1. Moreover, the return to a euro/ dollar exchange rate of less than 1.20 from May onwards allowed the business to obtain “latent exchange gain” which helped the net profit to increase.

The business’ operating income was also slightly higher than expected and rose by five percent to €34.8 million over the half-year period. There was an operating margin of 15.9 percent for revenue which was up from 15.8 percent the same time a year before. The business had stated in July that its operating margin over the period was expected to exceed 15 percent.

However, with the basis of €1 at $1.20, the business’ strong performance is unlikely to be replicated in the second half of the year. One reason for this is advertising expenses which are “more important in the second half of the year”, according to Philippe Santi, the business’ deputy chief executive.

As a result, the group has decided not to raise its operating margins target of between 13 and 13.5 percent for the entire year.

The group’s half year revenue, which was published in July, totalled €218.7 million ( up 4.5 percent or 11 percent at constant exchange rates). Despite this high total, sales had stagnated somewhat during the second quarter, due in part to unfavourable exchange rates and a lack of new product launches.

Interparfums has a revenue target of €430 million this year which is slightly higher than the business’ target for last year.
 

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