11.09.22
For the first nine months of 2022, net sales for Inter Parfums rose 16% to $776 million from $669 million. At comparable foreign currency exchange rates, nine months net sales increased 21%. Year-to-date net income attributable to Inter Parfums, Inc. rose 18% to $104 million compared to 2021’s $89 million while diluted earnings per share rose 17% to $3.26 from $2.79.
“In constant euro, European operations grew sales by 3% with gains by both our largest and mid-sized brands,” said Jean Madar, chairman and CEO of Inter Parfums, Inc. “However, in dollars, there was a 4% decline in net sales as a result of the 15% decrease in the average euro to dollar exchange rate. Also in 2021, our pipeline of new product launches was exceptionally large encompassing those postponed from 2020 as well as those scheduled for that year. As we noted last month, a significant quantity of holiday gift sets that we planned to ship in the third quarter rolled into the fourth quarter.”
New Brands Drive Sales Growth
On the subject of the 45% increase in sales by US operations, Madar pointed to the contribution of new brands, including Ferragamo, Donna Karan and DKNY, which accounted for 41% of the gains while organic growth from established brands, including Guess, Oscar de la Renta, Hollister and Abercrombie & Fitch made up much of the balance.
“The bar set in 2021 was unusually high when North American sales rose 140% through the first nine months both behind the strength of our brands and the desire for retailers to increase stocks in the third quarter of 2021 ahead of the holiday season,” said Madar. “As a result of this impact, sales in our largest market, North America, rose only 4%. Our other markets achieved very healthy growth. In Western Europe and Asia year-to-date sales rose 34% and 23%, respectively. Sales in the Middle East, and Central and South America, were also robust, up 41% and 28%, respectively. Only sales in Eastern Europe declined owing to the war in Ukraine.”
“In 2022, Montblanc Legend Red, Coach Wild Rose, Coach Dreams Sunset, Coach Open Road, Guess Uomo, Kate Spade Sparkle, Jimmy Choo Man Aqua, Jimmy Choo I Want Choo Forever, Lanvin Mon Éclat, and Boucheron Singulier were introduced along with brand extensions and flankers for many of its other brands. The company also unveiled its Moncler debut scents earlier in the year. In the coming year, its new product pipeline for US brands includes new pillars for the Hollister and MCM brands, but for the most part, is dominated by brand extensions and flankers. With work well underway, major launches for Ferragamo, Donna Karan and DKNY are planned for 2024. For European operations, in 2023, there will be a new fragrance for Kate Spade.
With the exception of China, the company’s travel retail business grew in all regions through the first nine months of the year as business and vacation travel resumed in earnest. Despite subject to global supply chain issues— namely, shortages of glass and pumps— the company turned in record sales year-to-date with record sales projected for the full year.
“For European based operations, gross profit margin was 69.5% and 67.8% for the current three- and nine-month periods, respectively, as compared to 66.6% and 66.3% for the corresponding periods of the prior year,” said CFO Michel Atwood. “The margin gains for the current three- and nine-month periods in 2022 are primarily the result of the stronger US dollar in 2022, favorable mix and our pricing actions. That said, increased transportation and component costs partially mitigated some of the exchange rate benefit. For US operations, gross margin was 53.8% and 54.0% for the current third quarter and nine-month periods, respectively, as compared to 53.1% and 53.2% for the corresponding periods of the prior year. Gross margin benefited from our scale benefits, pricing actions as well as a favorable brand and giftset mix.”