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It has been about a month since the last earnings report for Inter Parfums (IPAR). Shares have lost about 3.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Inter Parfums due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Inter Parfums Q4 Loss Narrower Than Estimates, Sales Up
Inter Parfums delivered fourth-quarter 2021 results, with the top line increasing year over year. The bottom line came ahead of the Zacks Consensus Estimate but deteriorated from the year-ago quarter’s levels.
Results in Detail
Inter Parfums’ fourth-quarter bottom line came in at a loss of 4 cents per share, narrower than the Zacks Consensus Estimate of a loss of 16 cents. The metric deteriorated from earnings of 47 cents per share reported in the year-ago quarter.
Quarterly net sales came in at $210.7 million, up from $184 million reported in the year-ago quarter.
In an earlier press release, the company highlighted that fourth-quarter 2021 sales rose 19% (up 14% at cc) from fourth-quarter 2019 figures. The company’s Europe-based product sales came in at $136.2 million in the fourth quarter, up 6% from 2019 levels. U.S.-based product sales amounted to $74.6 million, surging 53% from fourth-quarter 2019 levels.
Inter Parfums’ 2021 sales amounted to $879.6 million, up 63% year over year and 23% from 2019 levels. Sales in Europe and U.S.-based operations during 2021 increased 22% and 26%, respectively, from 2019 levels. Inter Parfums’ four largest brands, Montblanc, Jimmy Choo, Coach and GUESS, increased 7%, 34%, 41% and 41%, respectively, from 2019 tallies. The company’s mid-sized brands like Hollister, Abercrombie & Fitch, Oscar de la Renta, Van Cleef& Arpels and Karl Lagerfeld performed well during 2021. IPAR’s new additions, including Kate Spade, MCM, Ferragamo and Moncler, also contributed to sales. Inter Parfums’ largest market — North America — registered sales growth of 50% from 2019 levels. Sales across Western Europe, Asia, Latin America and Eastern Europe increased 9%, 15%, 22% and 26%, respectively. The Middle East region registered a sales decline from the 2019 level.
Inter Parfums’ fourth-quarter gross margin was $131.9 million, up from $117.6 million. SG&A expenses amounted to $144.1 million, up from $91.2 million reported in the year-ago quarter. The company reported operating loss from operations of $12.2 million against income of $26.5 million reported in the year-ago quarter.
Other Financial Aspects
Inter Parfums ended the quarter with cash and cash equivalents of $159.6 million, long-term debt (excluding current portion) of $132.9 million and total equity of $738.3 million. Cash provided by operating activities amounted to $120 million for the year ended Dec 31, 2021.
Inter Parfums announced a 100% hike in its annual dividend to $2.00 per share, which will be paid quarterly. The company announced a quarterly dividend of 50 cents per share, payable on Mar 31, 2022, to shareholders of record as of Mar 15, 2022.
The company’s debut scents from Moncler, Moncler Pour Homme and Moncler Pour Femme, which was previewed in 2021, is now launching atnearly 3,000 doors. Inter Parfums is adding a new flanker to the Montblanc Legend line. Management highlighted that the Jimmy Choo Man line and I Want Choo will be joined by a sister scent. Inter Parfums is on track to debut new men’s pillars for GUESS, Coach and Boucheron in 2022. The company’s other brands like Ferragamo and Ungaro will expand through flankers and extensions. Management is keen on undertaking new licensing and acquisition.
The company reiterated its guidance for 2022. The company anticipates 2022 net sales of roughly $975 and EPS are expected to be $3.00.
The guidance is based on the assumption of no major resurgence in coronavirus cases and the current level of the average dollar/euro exchange rate. The guidance also excludes any impact of the geopolitical situation in Eastern Europe.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 22.22% due to these changes.
At this time, Inter Parfums has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Inter Parfums has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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