Inter Parfums, Inc. IPAR released sales numbers for third-quarter 2020. Though net sales declined year over year, Inter Parfums’ sales have improved sequentially every month when compared with the early days of the coronavirus outbreak. In fact, better-than-anticipated turnaround also led Inter Parfums to raise 2020 guidance.
For 2020, management now expects net sales in the range of $495-$500 million. Earlier, it anticipated the metric to be nearly $442 million. Further, management envisions 2020 earnings per share in the band of 80-84 cents that suggests an improvement from 46 cents anticipated earlier.
Sales Numbers in Detail
For the three months ended Sep 30, 2020, net sales amounted to $160.6 million, down 16% (down 18.3% at constant currency) from $191.2 million reported in the year-ago quarter. The company’s Europe-based operations registered net sales of $129.7 million in the third quarter, which declined 9.6% year over year. In U.S.-based operations, net sales slumped 35.1% to $30.9 million during the quarter.
Markedly, third-quarter sales in Europe-based operations declined at a significantly lower pace when compared to a 68.6% year over year slump in the second quarter. Sales in general benefitted from favorable rebound in various markets including Asia and North America. Also, Coach and Lanvin fragrance sales increased 7.9% and 1.8%, respectively, during the third quarter. Notably, Coach brand sales were driven by benefits stemming from the debut of Coach Dreams at the start of 2020. Further, Lanvin brand saw robust growth in key markets including Asia and Eastern Europe. Montblanc and Jimmy Choo brand sales fell 11.3% and 31.0%, respectively, during the third quarter.
Talking about U.S.-based operations, the company saw significant improvement sequentially in the third quarter. However, absence of new product launches during 2020 put pressure on sales during the third quarter. Notably, the launch of Guess?’s GES Bella Vita as well as Anna Sui Sky have been postponed. Nevertheless, management is optimistic about its product pipeline for 2021 that includes debut of products for the Kate Spade and MCM brands.
Management stated that it saw strong business momentum and better-than-expected rebound. The upside is caused by reopening of stores as pandemic-led restrictions were relaxed as well as solid e-commerce business of its retail customers.
Taking a look at Inter Parfums’ results for the nine months ended Sep 30, net sales amounted to $355 million. The figure declined 33.7% from $535.7 million reported in the year-ago period. Sales in the Europe and U.S.-based operations declined 31.4% and 41.6%, respectively, during nine months ended Sep 30. We note that shares of this Zacks Rank #4 (Sell) have tumbled 45.9% year to date compared with the industry’s decline of 22%.
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