Inter Parfums (IPAR) Posts Sales Numbers for Q4 & 2019

Inter Parfums, Inc. IPAR released sales numbers for the fourth quarter and 2019. For the three months ended Dec 31, 2019, net sales amounted to $177.8 million, up 0.3% (1.5% at constant currency) from $177.2 million reported in the year-ago quarter. This indicates a slowdown from the third quarter, wherein net sales increased 7.9%.

Sales in 2019 came in at $713.5 million, up 5.6% (or 7.8% at cc) from $675.6 million reported in 2018. Notably, the company reported record high sales in 2019 amid strong dollar and relatively fewer launches compared with prior years.

Further, management was encouraged about the addition of Kate Spade New York and MCM in its brand portfolio. Also, Inter Parfums was issued an extended license for the Oscar de la Renta brand.

Regional Sales Data

The company’s European-based operations registered net sales of 542.1 million in 2019, which inched up 0.8% year over year. During fourth-quarter 2019, sales in the segment declined 4.2% to $129.1 million. Growth across brands such as Montblanc, Karl Lagerfeld and Van Cleef & Arpels has been supporting growth in the European-based operations through the year. On the contrary, brands like Coach and Jimmy Choo witnessed some softness.

In U.S.-based operations, net sales rallied 24.3% to $171.4 million in 2019. During the fourth quarter, sales in the segment increased 14.7% to $48.7 million. The GUESS? (GES) brand continues to be one of the key growth catalysts in the segment. Other brand banners depicting growth are The Oscar de La Renta, Abercrombie & Fitch and Hollister.

Outlook

Inter Parfums continues to envision 2019 earnings per share (EPS) to be approximately $1.9, in line with the current Zacks Consensus Estimate.

Further, the company reaffirmed its guidance for 2020, which was first issued in November 2019. Net sales are expected to be roughly $742 million. For 2020, EPS are expected to be nearly $2.00 per share.

Management expects sales growth to be buoyed by fragrance launches at key brands. The company plans to launch new fragrance under the GUESS, Hollister and Montblanc brands sometime this spring. Additionally, it has fragrance launches lined up for Jimmy Choo and Coach brands in 2020. Moreover, Inter Parfums is optimistic about the debut of a number scents from brands like Anna Sui, Graff and Kate Spade New York.

However, this Zacks Rank #4 (Sell) company has been witnessing rising selling, general and administrative expenses. Earlier, management stated that it expects expenses related to promotion and advertising programs to amount to $150 million for 2019. Such factors may exert pressure on the company’s bottom line.

Inter Parfums’ shares have gained 7.2% in the past year compared with the industry’s growth of 13.7%.

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