Fragrance player Inter Parfums says its first quarter performance underlines increased sales of ongoing brands, but the company is still struggling to plug the gap a year after losing the Burberry license.
Net sales for the quarter came in at $121.7m, which represented an increase of 17% in terms of ongoing brands, but a fall of 43% when factoring in the Burberry sales that saw the corresponding quarter of 2013 record total revenues of $213.8m.
The second quarter of 2014 will be the first where the comparison with the Burberry sales will not be recorded, but nevertheless the comparison does underline the fact that the company is still a long way short of rebounding back to last year’s figures.
Profits given a boost by lower promotional costs
“The 2013 first quarter was exceptionally profitable as we continued to operate certain aspects of the business for the brand including distribution, but we incurred essentially no associated advertising and promotion expense,” said Inter Parfums CFO and executive VP Russell Greenberg.
The company said that the results for the current quarter reflected significant gains in ongoing brand sales in Europe, where sales were up 20% to $102.3m, while in the US sales were up 4% to $18.7m.
“Top line growth was especially strong in North America, South America and Western Europe, which more than offset the decline in Eastern Europe,” said Jean Madar, chairman and CEO of Inter Parfums.
“We are especially pleased by the initial response to our first scents for the Karl Lagerfeld brand which debuted in March and contributed more than $13 million in incremental sales.”
Jimmy Choo sales down, but outlook is stronger
Sales of Jimmy Choo licensed fragrances and cosmetics declined by 25% during the quarter. The brand has continued to be one of its strongest, but also compares to an unprecedented 50% increase in sales for the brand during the corresponding period in 2013.
Madar underlined his belief that full year Jimmy Choo sales would show a marked recovery, particularly in view of better than expected back orders for Jimmy Choo Man, which will be launching in the fall.
“With respect to our 2014 outlook, we are maintaining our guidance for net sales of approximately $495 million, which represents nearly 15% growth of our ongoing brands,” said Greenberg.