Inter Parfums achieves US and European business growth, updates fiscal outlook
Inter Parfums reported on Tuesday its full third quarter 2016 results. Brands Coach, Montblanc, Dunhill and Rochas performed well for the company in the US and Europe, while Abercrombie & Fitch scent ‘First Instinct’ and Hollister fragrance duo ‘Wave’ brought great success.
Jean Madar, Chairman & CEO of Inter Parfums, Inc. noted, “We achieved good growth from both our European and U.S. operations during the third quarter. For our European operations, sales of our first Coach scent for women exceeded expectations, generating $13.8 million in incremental sales. Montblanc, our largest brand, performed exceptionally well, generating sales of $32.9 million, an 11% increase compared with last year’s third quarter with most of the credit going to the enduring popularity of the Legend fragrance family. Rochas fragrance sales more than doubled to $7.0 million from last year’s third quarter thanks to the loyal following of the brand’s two legacy fragrances, Eau de Rochas and Rochas Man in Spain and France.”
Mader added that Van Cleef & Arpels Collection Extraordinaire “contributed to our top line growth” as well as Lanvin’s Modern Princess line, which was in limited distribution in France during the third quarter.
Jimmy Choo brand sales are on pace for its year-to-date numbers, but it struggled to match the 2015 launch of its Illicit scent. “Jimmy Choo, made for a difficult comparison with brand sales in the current third quarter,” Mader said. “However, year-to-date, brand sales are running about equal to those of the same period of last year.”
Net sales increased 13.4% to $157.6 million from $138.9 million in the previous third quarter, European based operations increased 12% to $123.4 million from $110.1 million and US based operations increased 19.0% to $34.2 million from $28.8 million. At comparable currency exchange rates, net sales increased 14.8% and European based operations increased 13.7%.
Net income attributable to Inter Parfums increased 14.2% to $16.2 million from $14.2 million in the prior year, and net income per diluted share rose 13.0% to $0.52 from $0.46.
Gross margin for European and US operations were 64% and 47%, respectively, and SG&A expenses were 40% of net sales compared to 42% in the prior year. Third quarter gross profit margin fell reflecting a higher concentration of sales of lower margin holiday giftsets.
Russell Greenberg, Executive Vice President and CFO, noted, “Based upon our expectations for the remainder of the year, we expect that our 2016 net sales will be at the high end of our guidance range of $500 million to $510 million. As a result, net income attributable to Inter Parfums, Inc. should also be closer to the top of our guidance range of $1.05 to $1.10 per diluted share excluding the impact of the previously reported tax settlement, and $1.01 and $1.06 per diluted inclusive of the tax settlement.”
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