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Inter Parfums results show company plugging the Burberry gap

By Simon Pitman+

13-Mar-2014

Luxury fragrance and cosmetics player Inter Parfums has posted fourth quarter and full year results showing that the company is continuing to fill the hole left by the loss of the Burberry license last year.

The company said that, excluding Burberry sales, net revenue for its all-important fourth quarter rose by 19% to reach $105.5m, although this figure was approximately 40% below the total sales of $176.9m for the same period last year, including Burberry sales.

Specializing in the licensing of cosmetics and fragrances for fashion houses, celebrities and luxury brands, the company has been looking to rebuild its revenues through new license agreement and focusing on developing its remaining core brands.

European sales grow at a faster rate

The results for the quarter also showed that the company is continuing to expand its business at a greater rate in Europe, where sales grew by 22% to reach $78.7m, whereas US sales grew by 11% to reach $27.1m.

The loss of the Burberry license has also impacted profitability, with the company posting a net loss of $4.2m for the quarter, which compared to a significant gain for the corresponding period last year of almost $200m following the termination of the license.

“Comparing like quarters has not been particularly meaningful since the fourth quarter of 2012,” said Russell Greenberg, executive vice president and CFO of Inter Parfums.

“This is due primarily to the termination of the Burberry license in December 2012 and its associated gain, which was immediately followed by a transitional 2013 first quarter when we sold off much of the remaining Burberry inventory and recorded exceptionally high levels of Burberry brand sales, but incurred virtually no associated advertising and promotion expenses.”

Sales from ongoing brands remain strong

For the full year 2013, net sales were down from $654.1m to $563.5m, whereas net income for the year was down from $176.9m in 2012, compared to $51m in 2013.

Excluding Burberry brand sales, the company said that net sales for 2013 increased nearly 23% to $433.0m from $352.7m in the previous year.

“Sales from ongoing brands are generating excellent growth; we have recently added several important high potential brands to our portfolio; our balance sheet remains very strong; we have a global distribution network reaching over 100 countries; and our new product pipeline for 2014 is one of the most ambitious in recent years,” said Inter Parfums CEO, Jean Madar.

Looking ahead to the end of financial year 2014, the company believes that a rash of new product launches, including new products under the Montblanc, Jimmy Choo and Balmain brands should help to drive significant organic growth during the course of the year.

“We continue to expect net sales of approximately $495 million for a nearly 15% year-over-year sales improvement by our ongoing brands,” said Greenberg, who did also stress that this result would depend on currency translations remaining consistent.

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