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Inter Parfums (IPAR) Q3 Earnings Top Estimates, Sales up Y/Y

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Inter Parfums, Inc. IPAR delivered third-quarter 2021 results, with the top and the bottom line increasing year over year. Earnings surpassed the Zacks Consensus Estimate, while net sales came in line with the same.

Quarter in Detail

Inter Parfums posted earnings per share (EPS) of $1.20, which surpassed the Zacks Consensus Estimate of 83 cents. The metric increased from 52 cents per share reported in the year-ago quarter. Earnings also increased 82% from third-quarter 2019’s levels.

Net sales came in at $263 million, which increased from $161 million reported in the year-ago quarter. The metric came in line with the Zacks Consensus Estimate. Net sales rallied 37% from third-quarter 2019’s levels.

In an earlier press release, the company highlighted that at comparable foreign currency exchange rates, third-quarter consolidated net sales rallied 72% from 2020’s levels and increased 37% from third-quarter 2019 levels. Europe-based product sales increased 43.5% to $206.1 million, whereas U.S.-based product sales rose 18.9% to $56.6 million from third-quarter 2019 levels.

Compared with 2019’s level, the company’s largest brands performed better than expected with Montblanc, Jimmy Choo, Coach, GUESS and Lanvin sales coming ahead by 26%, 40%, 98%, 27% and 37%, respectively. The upside can be attributed to impressive growth in the fragrance pillars and brand extensions. The launch of new scents like I Want Choo for Jimmy Choo and Bella Vita for GUESS contributed to the upside. Sales from the company’s new brand addition Kate Spade and MCM also drove the top line. Management also highlighted that it achieved impressive sales in the reported quarter despite almost no travel retail business and significant supply chain disruptions leading to challenges related to procurement of components, transporting goods as well as cost increases.

Inter Parfums, Inc. Price, Consensus and EPS Surprise

Inter Parfums, Inc. Price, Consensus and EPS Surprise
Inter Parfums, Inc. Price, Consensus and EPS Surprise

Inter Parfums, Inc. price-consensus-eps-surprise-chart | Inter Parfums, Inc. Quote

Inter Parfums’ gross margin was 64%, up from 61% reported in the year-ago quarter. The metric expanded 400 basis points (bps) from 2019 levels.

SG&A expenses amounted to $99.8 million, up from $65.8 million reported in the year-ago quarter. Operating income came in at $68 million, up from $31 million reported in the year-ago quarter. In third-quarter 2019, the company posted an operating income of $37 million. Operating margin was 26%, up from 20% reported in the year-ago quarter. The metric expanded 700 bps from 2019’s levels.

Other Financial Aspects

Inter Parfums ended the quarter with cash and cash equivalents of $174.8 million, long-term debt (excluding current portion) of $126.6 million and total equity of $759.8 million. Cash provided by operating activities amounted to $101.3 million in the nine months ended Sep 30, 2021.

The company announced a quarterly dividend of 25 cents per share, to be paid out on Dec 31, 2021, to shareholders of record as of Dec 15.

Other Updates

Inter Parfums is on track to rollout products in the coming year. The company’s debuting scents for Moncler, Moncler Pour Homme and Moncler Pour Femme will launch in the beginning of 2022. Recently, Inter Parfums previewed the perfumes in various doors and management is impressed by the robust sell-through. The company will launch the latest men’s fragrance pillars for Coach, GUESS and Boucheron.

In 2022, management will introduce flankers for Montblanc Legend, the Coach women’s signature scent andJimmy Choo’s I Want Choo among others. Inter Parfums is encourage by the recently-signed license for Ferragamo, effective Oct 1,2021. The introduction of Donna Karan and DKNY fragrance brands starting next July bodes well.

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Zacks Investment Research

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Guidance

The company reiterated its recently updated guidance for 2021. Management projects net sales of nearly $810 million for 2021. EPS for the same period are envisioned to be $2.35. Management had earlier anticipated 2021 net sales to be $750 million, while net income per share was expected to be $1.95. 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 company is heavily investing in promotion and advertising through the fourth quarter with significant campaigns worldwide. Through such investments management expects big scale reorders in 2022 coupled with major market share gains.

The Zacks Rank #1 (Strong Buy) stock has rallied 55.7% so far this year compared with the industry’s growth of 0.4%.

Solid Staple Bets

United Natural Foods, Inc. UNFI, currently sporting a Zacks Rank #1, has a trailing four-quarter earnings surprise of 13.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Chef's Warehouse CHEF, currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 279%, on average.

The Hain Celestial Group, Inc. HAIN, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 21.2%, on average.


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