Inter Parfums reports strong Q2 off the back of big US gains
Net sales for the period increased by 20 percent to $145.6m, compared to $121.1m for the corresponding period last year, a figure that was negatively impacted by foreign currency exchange rates by around 9 percent.
The increase in sales was also reflected in the net income figure, which rose by 20 percent to $6.0m, compared to a figure of $5.0m in the corresponding period last year.
US division drives sales growth
The sales figures reflected a particularly successful quarter for the company’s smaller but fast-growing US division, with sales increasing by 37 percent to reach $20.0m.
Sales for the company’s European-based operations were up by 18 percent, to reach $125.6m, compared to $106.5m in the corresponding period last year.
First half sales were up 22 percent to $310.9m – up by 27 percent without the negative impact of currency exchange, whereas net income for the period was up 21 percent to $21.5m.
Ann Sui fragrance sales boost revenues
Company CEO Russell Greenberg pointed that the strong gains during the second quarter in the US market were largely down to the inclusion of the Anna Sui fragrance sales, while also stressing the fact that some of the gains had been counterbalanced by the strength of the US dollar.
He also pointed out that past results have traditionally had a positive impact from the dollar/euro exchange rate, which had significantly impacted the results for the current quarter on account of the fact that European sales are mitigated in US dollars.
“Based upon results year-to-date, assuming that the dollar remains at current levels, we stand by our recently updated 2012 guidance calling for net sales of approximately $632.0 million, with resulting net income attributable to Inter Parfums, of approximately $35.9 million,” Greenberg said.
Loss of Burberry license leaves challenge ahead
The company is currently facing up to the fact that at the end of this financial year its Burberry branding license, which currently represents the biggest slice of its revenues, will be terminated.
CEO Jean Madar said that the company had planned for this eventuality and that it was planning to reinvest the expected $220m it would gain from the selling back the license to Burberry in to new revenue generating business.
“We remain confident that 2013 net sales can reach approximately $400 million, generating a better than 10 percent operating margin with the remaining brands in our portfolio,” said Madar.
“We expect to issue more precise 2013 guidance as the new year approaches and we have greater visibility on the timing of new product launches.”