Inter Parfums sales up but costs keep profits steady
for the fourth quarter and full year 2004. The company said that
favourable currency exchange and it Burberry branded fragrances
were the main reason for the result, but added costs meant that
profits should remain steady.
Fourth quarter net sales were reported to be better than expected at $63.4 million (€48.8m), raising net sales for the year to $235.6 million. This was a 29 per cent and 27 per cent increase over the $49.2 million and $185.6 million reported for the fourth quarter and full year in 2003.
The US-based company, which produces mass market fragrances, cosmetics and personal care products that are sold in 120 markets throughout the world, had previously projected 2004 sales to be $228 million. At comparable foreign currency exchange rates, net sales for the fourth quarter and year were up 24 per cent and 22 per cent, respectively.
The company also said that it did not expect to issue its operating results for the fourth quarter and full year until early March, but added that the figures were expected to meet projected net income goals for 2004 of approximately $15.8 million.
However, the company did also state that the higher than anticipated sales are not expected to produce a corresponding increase in net income. This is due to the fact that the increased sales are partially the result of changes in currency exchange rates, combined with the fact that the company incurred increased expenses in connection with compliance with the new Sarbanes-Oxley internal controls requirements.
These controls were introduced by the US government to ensure that all companies in the country comply with regulations on corporate governance, accounting practices and financial disclosures.
Jean Madar, CEO of Inter Parfums said, "Once again sales growth was primarily the result of an excellent performance by Burberry Fragrances. The success was driven both by gains from Burberry Brit, the brand's most significant line, and solid results from Burberry London, Burberry Weekend and Burberry Touch."
Looking to the future the company is pinning its hope on the continued success of the Burberry link up, combined with its new fragrance line, Celine.
"We have new fragrance lines for Celine coming in the spring of 2005, followed by a new Christian Lacroix fragrance family debuting in the summer. Additionally, we expect to introduce our first new Lanvin fragrance during the fall of 2005," Madar added.
The company also said that it was sticking to projected net sales of approximately $280 million for 2005, a 19 per cent increase compared with 2004. Net income for 2005 is expected to be approximately $15.8 million. The 2005 net income projection is expected to reflect the increased Burberry royalty rate that went into effect on July 1, 2004, as well as the increasing advertising and promotional expenditures that are required beginning January 1, 2005.
Inter Parfums develops, manufactures and distributes prestige perfumes and cosmetics as the exclusive worldwide licensee for Burberry, S.T. Dupont, Paul Smith, Christian Lacroix, Celine, Diane von Furstenberg and Lanvin. The Company also has controlling interest in Nickel S.A., a men's skin care company.
