Q3 Sales Fall at Inter Parfums

Inter Parfums reported that third quarte sales fell 3.2% to $166.3 million European-based operations generated sales of $148.6 million, down 4%, while sales by U.S.-based operations rose 4% to $17.7 million. Meanwhile, gross margin slipped to 60.8% from 62.5% a year ago, and net income fell from $10.4 million to $10 million.


Through the first nine months of 2012, net sales rose 12% to $477.2 million and net income increased 11.8% to $31.5 million or $1.03 per basic and diluted share from $28.2 million or $0.92 per basic and diluted share.


Russell Greenberg, executive vice president & chief financial officer blamed the Q3 declines on unfavorable exchange rates.


“The strength of the U.S. dollar has had a significant effect on sales and gross margin as the average dollar/euro exchange rate for the three and nine months ended September 30, 2012 was 1.25 and 1.28, respectively, as compared to 1.41 for both corresponding periods of the prior year,” he observed. “Over 40% of European-based net sales are denominated in dollars, while corresponding costs are incurred in euro.Thus, while a stronger U.S. dollar has a positive effect on gross margin during the current third quarter, gross margin declined slightly due to product mix and the sale of certain slow moving goods at a discount.”


According to Jean Madar, chairman & CEO of Inter Parfums, sales were helped by the strong gains made by Lanvin, which added 12%; Montblanc, which rose 67%, and Jimmy Choo fragrance sales were 44% ahead of the same period last year.However, last year’s third quarter net sales included the global launch of Burberry Body, making for a difficult year-over-year sales comparison.With respectto U.S.-based operations, the 2012 third quarter was favorably impacted by the inclusion of Anna Sui fragrance sales, international distribution of U.S. specialty retail brands, and fragrance launches for namesake stores earlier in the year.


Madar added the Burberry transition will be completed by March 31, 2013.And that there are several new product launches planned for many brands including Jimmy Choo, Lanvin, Van Cleef & Arpels, Boucheron and the first Repetto fragrance.