Inter Parfums Q2 profits up on foreign currency gains
The company is registered in the US but earns most of its income from European markets, a situation that has been impacting results due to the continued strength of the dollar.
However, anticipating this the company set up forward exchange contracts that made gains of $2.5m (€1.76m) in the first quarter and $3.9m in the second quarter, contributing $1.2m and $1.9m respectively to earnings.
Helped by these gains, net income for the second quarter rose 12 per cent, up from $3.8m to $4.2m, a figure that also beat market expectations.
Sales decline on tough economic conditions
Overall net sales during the second quarter declined by 10.6 per cent for the second quarter, to reach $88.6m, compared to $99.1m last year.
Sales from its European operations were $79.4m, down 5 per cent, while sales from its US operations declined by 39 per cent to $9.2m.
“As we previously reported, about 6.5 per cent of the second quarter sales decline was due to the continued strength of the US dollar relative to the euro,” said Jean Madar, CEO for Inter Parfums.
Madar pointed out that the comparison with the corresponding second quarter in 2008 was difficult as the sales growth had been in excess of 20 per cent. He also said that ‘recessionary factors’ had affected both retailer inventory levels and sales.
New product launches
Sales for the first six months of the year were down 19.4 per cent to $222.2, while net income for the period was down to $9.7m.
The company says it is readying a significant new product pipeline for the second half of the year on both sides of the Atlantic, drawing particular attention to the launch of the new bebe fragrance, which is being promoted heavily.
The company says it anticipates that due to its new product launch schedule the second half of the year will be stronger, and reasserted its forecast for 2009 net sales of $390m and a net income of $21m.
