10.25.22
Inter Parfums, Inc. announced that for the three months ended September 30, 2022, net sales rose to a record $280 million, a 7% increase from $263 million in the third quarter of 2021, for a year-to-date sales increase of 16%.
At comparable foreign currency exchange rates, third quarter net sales increased 12%. The average dollar/euro exchange rate for the current third quarter was 1.01 compared to 1.18 in the third quarter of 2021 leading to a negative 5% foreign exchange impact.
For the first nine months of 2022, the average dollar/euro exchange rate was 1.06 and 1.19 for the same period in 2021, representing an adverse foreign exchange impact of 5%.
According to CEO and Chairman Jean Madar, the company’s newer brands, Ferragamo, Donna Karan and DKNY accounted for 41% of the gains while organic growth from established brands, including GUESS, Oscar de la Renta, Hollister and Abercrombie & Fitch comprised more of the balance.
In Euro, European operations grew sales by 12%, he added; the company’s three largest brands, Montblanc, Jimmy Choo and Coach, outperformed last year’s third quarter by 11%, 32% and 3%, respectively. Its mid-sized brands, including Kate Spade, Rochas, Boucheron, Van Cleef & Arpels and Karl Lagerfeld achieved comparable quarter sales growth as well. The 17% decrease in the average euro-to-dollar exchange rate masked those sales gains. Accordingly, the company reported a 4% decline in third quarter European based product sales in dollars.
“While our growth was modest in comparison to previous quarters, we are up against significant comparables since Q3 ’21 was up 64%, and we continue to have supply chain challenges which pushed the delivery of certain holiday gifts sets into the fourth quarter,” said Michel Atwood, CFO. “On the good news front, our Italian operations are fully operational and highly effective; in fact, Ferragamo is on track to be our second largest brand under the US operations banner this year. We also continue to see strong momentum in our travel retail business and our small but growing travel amenities operation has begun to show real promise.”
He continued, “On a consolidated basis, the 7% sales gain in the third quarter factors in organic sales growth of 3%, 9% due to new brands, and a negative 5% impact of currency translation. Year-to-date, the 16% top line improvement reflects 13% of organic sales growth, 8% attributable to new brands and a negative 5% impact of currency translation. While the strength of the dollar has obscured the growth of our European operations, on the upside, our gross margin should continue to benefit as almost 50% of net sales by our European based operations are denominated in US dollars, while most of its costs are incurred in euro. Finally, we remain on track to achieve our 2022 goal of approximately $1 billion in net sales, resulting in diluted net income per share of $3.25. Guidance assumes that the average dollar/euro exchange rate remains at current levels, and there is no significant resurgence of the COVID-19 pandemic.”