Inter Parfums Reports Record Results for 3Q

Inter Parfums, Inc. today reported record third quarter 2006 results. European operations, which are conducted in France, primarily represent the sale of prestige brand name fragrances, and U.S. operations, primarily represent the sale of specialty retail products and mass-market products.

Net sales increased 19% to $89.7 million from $75.4 million. At comparable foreign currency exchange rates, third quarter net sales were 13% ahead of last year’s third quarter. Sales by European operations were $76.1 million, up 13% compared to $67.1 million. U.S. operations generated $13.6 million in sales, up 64% from $8.3 million. Gross margin was 54% of net sales as compared to 56% with the decline attributable to increased sales of lower margin U.S. product lines and increased point of purchase promotional activities during the period in support of the company’s aggressive 2006 prestige fragrance launch schedule. Net income increased to $4.6 million from $3.8 million.

Through the first nine months of 2006, net sales increased 11%  to $230.9 million. Year-to-date net income was $12.3 million compared to $11.4 million a year ago.

“The current third quarter demonstrates a number of our special strengths. One of these is our ability to take an established fragrance brand to the next level,” said Jean Madar, chairman and CEO of Inter Parfums. “That was especially the case with Lanvin, with comparable quarter sales up 56% (in local currency) due primarily to the launch of Rumeur and the continued strength of Eclat d’Arpege. The Lanvin model will be adapted in the new year for Van Cleef & Arpels fragrance, where we plan to build upon its approximately $20 million sales base by promoting the two strongest families, First and Tsar, and create an entirely new line for launch in 2008.”

He went on to say, “Another Inter Parfums strength is our ability to continue to grow the largest brand in the portfolio, Burberry, which achieved a 5% gain in comparable quarter sales. The successful introduction and rollout of Burberry London had a nominal impact on the other fragrance families within the brand.”

Mr. Madar continued, “We have also proven that we can establish and grow fragrance franchises for brands where there were none. That is best exemplified with Paul Smith, where we’ve gone from a license signing in 1999 to four fragrance families today. We look forward to similar success with the recent addition of the Quiksilver/Roxy license and the first new Roxy fragrance launch in 2007.”

With respect to our entry into the growing specialty retail market, Mr. Madar stated, “The Banana Republic Discover Collection, a line of five fragrances, was launched at Banana Republic’s North American stores in September 2006. The collection consists of three scents for women and two for men, each named after a luxurious, natural material that is both emotional and authentic. In addition, a full line of bath and body products as well as home fragrance products were created to complement the fragrance selection. A separate line of fragrance and personal care products is also in the works for Gap’s North American stores. That line is expected to launch in 2007.”