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Inter Parfums reports sales down for all-important Q4

By Simon Pitman , 29-Jan-2013

Inter Parfums has reported a drop in Q4 sales, stating that the comparable figures to the previous year were set against a backdrop of unprecedented product launches and lower European sales.

The preliminary results show that Q4 figures were down 6.4 percent to $177.9m, which was further impacted by foreign currency to underline a net sales decline of 7.7 percent.

Breaking the figures down into European and US sales, the results also show the difficult financial climate in the European market, where sales dropped 10.1 percent during the quarter to reach $152.4m.

Sales in the US helped buoy the overal results

This figure was buoyed by a much healthier picture in the US market, where sales increased 25.9 percent to reach $176.9m.

However, for the full year, the company’s sales figures were far better, with sales gains in both geographies, although the performance was significantly better in the US market.

Sales for the full financial year were up 6.3 percent to $654.1m, which was ahead of the company’s own guidance at the beginning of the year, with forecast sales of $632.0m. The stronger performance was said to have been achieved thanks to a better than expected final quarter.

Some of the shine comes off Burberry sales

Although sales of brands such as Lanvin, Montblance and Jimmy Choo were all highlighted by CEO Jean Madar for performing well, the company’s eponymous Burberry brand had slower sales than previous quarters, registering 6 percent growth for the full year, compared to double-digit gains in previous years.

Madar also commented on regional sales growth during the full year, pointing to the fact that overall European sales grew at 5 percent, whereas sales in the US grew at 29 percent.

“The inclusion of Anna Sui fragrances in 2012 drove the 31 percent sales increase. International distribution of U.S. specialty retail brands, and several fragrance launches for namesake stores also factored into the top line growth," said Madar.

Looking ahead to 2013

Looking ahead to the full financial year, the big change for the company will be the end of the licensing agreement for the Burberry brand, which was terminated on 31st December 2012, resulting in an exit payment to the company of $239m – a figure that is expected to positively impact the soon-to-be-announced full year consolidated result.

Company CFO Russell Greenberg said he expects that strong momentum throughout the cause of the year, combined with the addition of the Alfred Dunhill fragrance license is expected to drive growth in its existing brand portfolio, although figures will be well down on that of 2012 because of the loss of the Burberry license.

“We are increasing our guidance for the year to approximately $480 million in net sales resulting in net income attributable to Inter Parfums,” said Greenberg.

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