Q2 Sales Fall 5.2% At Inter Parfums

Inter Parfums, Inc. reported second quarter sales decreased 5.2% to $102.0 million; however, sales by US-based operations rose 5.7% to $24.9 million.

Chairman and CEO Jean Madar noted that sales for European-based operations fell due to currency fluctuations, difficult comparisons and weakness in certain markets. The greatest headwind came from the 19% depreciation of the euro versus the dollar, which served to mask sales growth for some brands, and exacerbate declines for others. Additionally, some brands had challenging comparisons against very strong new product launches in the second quarter of 2014.

“For example, our largest brand, Montblanc, experienced a 23% decline in local currency and a 38% reduction in dollars due largely to the high bar set by the launch of Emblem in the second quarter of last year,” said Madar. “Lastly, the economic environments in some of our markets, particularly Eastern Europe and China, have weakened in 2015.“

He also noted that sales of Lanvin, one of its biggest brands, fell 9% and 27% in local currency and dollars, respectively, largely due to weak demand in Eastern Europe, where the brand is especially popular. Partially offsetting these declines, Jimmy Choo once again delivered positive results.

“Our US-based operations delivered solid growth in the second quarter,” continued Madar. “The 6% increase in sales during the period reflects the successful launches of Extraordinary by Oscar de la Renta and Icon by Dunhill earlier this year. Mitigating some of these gains was the decline in Anna Sui brand sales, due to continued negative market conditions in China.

“Looking ahead through this year and next, we remain optimistic about our prospects. One reason for our optimism relates to the launch of several new fragrances, including this month’s debut of Jimmy Choo Illicit. For Montblanc, our plans call for the unveiling of Lady Emblem during the second half of 2015. Lanvin sales should also benefit from new launch activity in the coming months, with the introduction of a new scent for women, Éclat de Fleurs. For our US brands, this October we will be launching Romantica, a new women’s scent from Anna Sui. In addition, we are continuing the global roll out of new products introduced under the Oscar de la Renta and Dunhill labels earlier this year.

Madar concluded, “With respect to growth drivers for 2016, in early June of this year, we closed on our acquisition of the Rochas brand, and have begun work on developing new fragrances and marketing programs to capitalize on the potential of this brand. We are doing the same with Abercrombie & Fitch, Hollister and Coach, and expect them to spur growth for Inter Parfums in the coming year and beyond.”

The firm expects 2015 net sales to come in at a range of $460 to $470 million.