Inter Parfums (IPAR) Up More Than 40% in 6 Months: Here's Why
Focus on strategic partnerships and effective product launches are working well for Inter Parfums, Inc. IPAR. The company has been benefiting from solid growth across European as well as U.S. operations. These upsides have boosted third-quarter 2021 results, with the top and the bottom line increasing year over year.
Inter Parfums anticipates 2022 net sales in the range of $925-$950 million. Earnings per share (EPS) are expected between $2.80 and $2.85. The midrange of 2022 guidance projects 16% growth in net sales and 20% increase in EPS compared with 2021’s estimated levels. The company’s stock has surged 42.3% in the past six months against the industry’s 22.3% decline.
Let’s delve deeper.
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Strategic Partnership & Product Launches
Inter Parfums is on track to expand its business through new licenses. Recently, Inter Parfums — through its subsidiary Interparfums Italia — signed a 10-year exclusive global licensing agreement with Emanuel Ungaro. The partnership is aimed at creating, developing and distributing fragrances and fragrance-related products under the Emanuel Ungaro brand. In October 2021, Inter Parfums finalized the agreement with Salvatore Ferragamo S.p.A. Per the agreement, Inter Parfums now holds the exclusive worldwide license for the production and distribution of Salvatore Ferragamo brand perfumes. In September, Inter Parfums entered into a long-term global licensing agreement with G-III Apparel Group, Ltd. GIII to create, develop as well as distribute fragrances and related items under well-known brands like DKNY and Donna Karan.
G-III Apparel designs, sources and markets women's and men's apparel globally. The company continuously strengthens its power brands through innovations as well as partnerships and licensing agreements. GIII is steadily investing in data analytics capabilities to know the consumers across channels and boost their shopping experiences. Apart from this, G-III Apparel is also experiencing strength in its outerwear business.
Coming back to Inter Parfums, management expects 2022 net sales to be driven by the introduction of new brands like Ferragamo, Donna Karanand and DKNY. Product rollouts for Moncler, Moncler Pour Homme and Moncler Pour Femme in the starting of the year is likely to be an upside. New men’s fragrance pillars launching for Coach, GUESS and Boucheron, among other releases, bode well. Inter Parfums expects a restart in international travel to revive its duty-free/travel retail business. Management anticipates a reduction in supply chain disruptions. In addition, a modest rise in prices effective from 2022 will contribute to growth.
Wrapping Up
Inter Parfums has been grappling with higher selling, general and administrative (SG&A) expenses for a while. During third-quarter 2021, SG&A expenses amounted to $99.8 million, up from $65.8 million reported in the year-ago quarter.
That being said, we believe that the abovementioned upsides are likely to keep this Zacks Rank #3 (Hold) company’s growth story going.
2 Solid Cosmetic Picks
Some top-ranked cosmetics companies are The Estee Lauder Companies EL and Nu Skin Enterprises, Inc. NUS.
Nu Skin, which develops and distributes personal care and wellness products worldwide, currently carries a Zacks Rank #2 (Buy). Shares of NUS have gained 3.5% in the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Nu Skin’s current financial year’s sales suggests growth of 3.7% from the year-ago reported figure. NUS has a trailing four-quarter earnings surprise of 16.6%, on average.
The Estee Lauder Companies manufactures and sells skincare, makeup, fragrance and hair care products worldwide, currently carries a Zacks Rank #2. Shares of EL have gained 1.9% in the past six months.
The Zacks Consensus Estimate for The Estee Lauder Companies’ current financial year’s sales suggests growth of 15.4% from the year-ago reported figure. EL has a trailing four-quarter earnings surprise of 37%, on average.
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