Inter Parfums, Inc. reported record results for the first quarter ended March 31, 2012. Net sales for the quarter increased 24% to $165.4 million, up from Q1 2011’s $133.4 million; at comparable foreign currency exchange rates, net sales rose 26% for the period. European-based operations generated sales of $145.2 million, up 19% from $121.6 million in Q1 2011, and sales of U.S.-based operations were up 71% to $20.2 million from $11.8 million in Q1 2011. Net income attributable to Inter Parfums, Inc. increased 21.5% to $15.5 millio,n and diluted earnings per share increased 24% to $0.51 from $0.41.
Discussing European-based operations in local currency, Jean Madar, chairman and CEO of Inter Parfums, reiterated, “Burberry brand sales were up 12% with our new Burberry Body line plus the brand’s more established collections contributing to the top line growth. Lanvin fragrance sales also increased 12% reflecting gains by the Eclat d’Arpege line, the staying power of Jeanne Lanvin and Marry Me! and the February limited distribution launch of a new men’s scent, Avant Garde. As we reported last month, Jimmy Choo and Montblanc brand sales rose 68% and 77%, respectively over last year’s first quarter spurred by 2011 product introductions. Sales of Boucheron brand products, which were not meaningful in the first half of 2011, also factored into the comparable quarter growth.”
Madar continued, “Later this month we will launch Jaïpur Bracelet, which pays tribute to the Boucheron brand’s jewelry heritage, and relaunch a Balmain heritage scent, Ivoire. We also have Montblanc Legend for women and a Lanvin brand extension called Jeanne Lanvin Couture debuting later this year.”
Madar also once again reported, “Discussions are being actively pursued with Burberry on the creation of a new operating structure for the Burberry fragrance and beauty business.”
With regard to U.S.-based operations, Madar noted, “The 71% increase in sales was due to several factors, including new product launches such as Love Fury by Nine West, Wildbloom Vert for Banana Republic and Gap Established 1969. The inclusion of Anna Sui fragrance sales effective January 1 was also an important contributor as were further gains by our U.S. specialty retail and designer fragrance brands in overseas markets. We have an ambitious new product line up in the works, which includes Wishes & Dreams for bebe, Miss Madison for Brooks Brothers, Wildbloom Blue for Banana Republic, and two flankers: Too Too Pretty for Betsey Johnson and Fairy Dance Secret Wish for Anna Sui.”
Russell Greenberg, Inter Parfums executive vice president and CFO, pointed out several items pertinent to the first quarter. “Now that more than a year has passed since taking over prestige product distribution in the U.S. by Interparfums Luxury Brands, Inc., gross margins for reporting periods in 2012 should be more comparable,” he said. “In the current first quarter, gains in gross margin from currency fluctuations were offset by changes in product mix. While we significantly increased our overall advertising budget for all brands to maintain the positive sales momentum and continue to grow our market share, SG&A expense as a percent of net sales was comparable to last year’s first quarter.”
Greenberg concluded, “We recognize that our first quarter performance was well above analysts’ expectations, however, such results were in line with management’s internal expectations. We intend to provide a guidance update when we announce a resolution regarding our Burberry license. Therefore at this point in time, we are reaffirming our current guidance, which calls for sales of approximately $625.0 million, with resulting net income attributable to Inter Parfums, Inc. of approximately $35.7 million or $1.16 per diluted share.”