Inter Parfums Reports Third Quarter Gains

Inter Parfums, Inc. said its third quarter net sales rose 7% to $27.6 million. Gross margin improved to 48% versus 46% for the same period last year and net income increased 18% to $1.9 million.

Net sales for the nine months increased 17% to $84.9 million. Net income was up 29% to $5.9 million.

“In light of no new major product launches during the third quarter and the 36% increase in third quarter 2000 sales, the 7% sales increase was better than we had earlier anticipated,” said Jean Madar, chairman and chief executive officer. “Even more gratifying was the 18% bottom line improvement achieved in this third quarter.”

Mr. Madar noted that new product introductions are an important catalyst to sales growth. In last year’s second half, the company launched Paul Smith and Burberry Touch, which boosted fourth quarter sales to $29 million. In comparison, for this year’s fourth quarter the company has one new product launch, a high-end Celine fragrance line for men and women, which debuted recently in the U.S., France and other select European and Asian markets.

“For this reason, as well as a slowdown in discretionary consumer spending, we are targeting $26 million in fourth quarter sales, and $111 million for all of 2001. At the same time, we are confident that $8.1 million in net income is clearly achievable,” he said.

Next year, the company will introduce FUBU and Mr. Madar said he is extremely enthusiastic about its prospects. Select specialty stores are scheduled to carry the men’s and women’s line beginning in January 2002, with broad distribution coming in the second quarter with department stores and international sales. “We are also readying a completely new line of Christian Lacroix fragrances for introduction for early 2002. Come March 2002, the roll-out of Celine Pour Femme and Celine Pour Homme will reach South America, the U.K. and other European markets,” said Mr. Madar. “We also plan to further leverage the incredible talents of designer Michael Kors, who deserves so much of the credit for reestablishing the 56 year old Celine brand’s association with luxury, high quality and allure, when our Celine bath line debuts in the second half of next year.”

In discussing the outlook for 2002, he noted that the company is not immune from economic downturns, but insisted that new product initiatives along with the continued popularity of more established fragrances and brands, gives Inter Parfums a high degree of confidence that it can build upon the accomplishements and financial performance of 2001.

“We also plan to continue to grow our health and beauty aids line, which has made a meaningful contribution to our business since its launch in the second quarter of this year,” said Mr. Madar. “Aziza cosmetics are and should continue to be an important avenue for our growth. These two mass market components offset the decline in low-end fragrance sales. Factoring in a slowing economy and consumer spending, we estimate that 2002 sales should approximate $120 million, producing net income of approximately $8.8 million.”