Sales growth ebbs off for Inter Parfums during 2005
sales, highlighting another successful year for its licensing
agreement with Burberry, but the fourth quarter confirms slowing
growth.
The final quarter results meant that sales figures did not quite live up to the company's full-year estimates, as a strong start to the year slowly ebbed away in the last two quarters.
In October the company reported that its third quarter sales growth had come in at 12 per cent, against first nine month sales growth of 21 per cent.
The company said that it had been hit by increased expenses resulting from both advertising and royalty costs. Its premium Burberry fragrance has become a top seller, but in turn the British company has demanded a greater percentage of royalties from sales.
Inter Parfum also markets leading fragrances such as Cristian Lacroix, Celine, Paul Smith and has a controlling stake in men's skin care company Nickel.
For the full year, the company reported sales of $273.4 million, narrowly missing its $274 million estimate. However, for the fourth quarter, total sales only grew by just under 3 per cent to reach $65.5 million, compared to the same period in 2004.
The company said that at comparable foreign exchange rates the full-year figure represented a 17 per cent jump in revenues. It added that full operating results would be revealed in the first week of March, but stands by an estimated net income of $14.5 million.
In view of the results, the company said that it was able to reaffirm guidance for 2006, estimating that net sales will grow by 10 per cent to reach $301 million. This meant that estimated for net income in 2006 were reaffirmed at $16.9 million, representing a 16 per cent increase in predictions for 2005.
Independent financial analysts, Thomson Financial, has predicted that 2006 sales should rise to around $305 million in 2006, suggesting that the company's own estimates are conservative.
CEO Jean Madar, reiterated his hopes for an anniversary Burberry fragrance for men and women, due to be rolled out during the course of the year, as well as a new line of cosmetic and fragrance products for retailer Banana Republic, due in the last quarter of the year.
