Inter Parfums Dollars and Scents

Inter Parfums, Inc.’s (IPAR - Snapshot Report) growth strategy of acquiring exclusive worldwide licenses and developing new prestige fragrances under those brand names has resulted in a 19.5% sales growth rate.

The management has aggressively pursued additional license agreements -- Gap (GPS - Analyst Report) and Quiksilver (ZQK - Snapshot Report) -- and has also entered the skincare category. Earnings guidance has been increased after each of the last five quarterly earnings reports except the most recent in August. The stock is rated a Hold.

The company’s new product pipeline continues to be strong and robust in fragrances. Most recently, the company entered into a 12-year agreement with Van Cleef & Arpels to manufacture and distribute perfumes and related products under the Van Cleef & Arpels brand name. Under the Van Cleef & Arpels brand, the company plans to roll out a new women’s scent during the fall of 2008 and Rumeur 2 Rose under the Lanvin brand.

Also in 2008, management plans to roll out Roxy Love for women, a Quicksilver fragrance for men and a Quicksilver sun care collection. In addition, the management plans to introduce limited edition men’s and women’s fragrances for Paul Smith and S.T. Dupont.

In September 2008, the company plans to globally launch the Jean Lanvin brand of fragrance. In addition, the company plans to launch the new fragrance Passenger for ST Dupont during the fall of 2008. Also, the Paul Smith license, which was due to expire in 2010, has been extended through December 31, 2017.

The company has exhibited an above-average sales growth rate, but earnings growth has lagged sales growth due to the inherent risks associated with new products development that is dependent on renewable licensing agreements. The target price of $16.25 is based on a 19 P/E on 12-month trailing earnings.

Read the full analyst report on IPAR