Inter Parfums reports increased ongoing brand sales, ups forecast
The company reported that net sales for the period were down by 23.8% to $126.8m, compared to $166.3m, a figure that was very slightly impacted by currency translations.
However, the all-important sales from ongoing brands shows that the company is fairing much better, with sales in Europe up 41.2% to $98.1m and sales from US-based operations rising by 62.3% to reach $28.7m.
No Burberry license means lower costs
Meanwhile expenditure on selling, general and administrative costs as a percentage of net sales was 43.7%, compared to 47.5% in the corresponding period last year.
“The decline in gross margin was the result of the discontinuance of Burberry product sales in the third quarter. Similarly, the decline in S, G & A expense as a percent of net sales was due to the absence of promotion and advertising costs associated with Burberry product sales, together with lower royalty expense and lower service fees as compared to the prior year third quarter,” said Russell Greenberg, Executive Vice President & CFO.
Sales in the mainstay European operations have proved robust, despite economic woos in that region, with additional marketing and advertising resources giving a boost to the figures.
European sales buck general trend
“Our ongoing brands, especially our three largest, Montblanc, Jimmy Choo and Lanvin, produced another quarter of very strong growth,” said Jean Madar, Chairman & CEO of Inter Parfums, with specific reference to the European brands.
Sales for Jimmy Choo were led by new fragrance launch Flash, while Montblanc Legend recorded the biggest brand sales increase, up by 57% compared to the same period last year.
But the biggest sales increases were seen in the U.S. division, where Anna Sui sales were boosted by the rollout of La Vie de Bohemein the summer, together with stronger brand sales in Asia.
The stronger ongoing brand sales, together with a number of new license acquisitions, including that of Alfred Dunhill, means the company is feeling more positive about its outlook for next year, leading it to raise its 2014.
“We now expect net sales of approximately $495 million, which represents 15% growth in sales of our ongoing brands,” said Greenberg, who pointed out that previous guidance for 2014 had been estimated at $475m.
