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Inter Parfums (IPAR) Q3 Earnings Beat Estimates, 2022 View Up
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Inter Parfums, Inc. (IPAR - Free Report) delivered impressive third-quarter 2022 results, with the top and the bottom line increasing year over year. Quarterly earnings surpassed the Zacks Consensus Estimate. Management raised its 2022 guidance.
Results in Detail
Inter Parfums’ third-quarter earnings came in at $1.30 per share, which surpassed the Zacks Consensus Estimate of 99 cents. The metric increased 8% from $1.20 per share reported in the year-ago quarter.
Quarterly net sales increased 7% to $280 million compared with $263 million reported in the year-ago quarter.
In an earlier press release, management highlighted that third-quarter net sales rose 12% at comparable foreign currency rates. Inter Parfums’ Europe-based product sales came in at $198 million, down 4% from 2021 levels. U.S.-based product sales amounted to $82 million, surging 45% from third-quarter 2021.
Inter Parfums, Inc. Price, Consensus and EPS Surprise
In the company’s U.S. operations, new brands like Ferragamo, Donna Karan and DKNY generated 41% of the gains. Apart from this, organic growth from established brands like GUESS?, Oscar de la Renta, Hollister, and Abercrombie & Fitch also contributed to the upside.
Management highlighted that sales of its European operations increased 12% in euro, with the three largest brands Montblanc, Jimmy Choo and Coach, outperforming by 11%, 32% and 3% year over year, respectively. Several mid-sized brands, namely Kate Spade, Rochas, Boucheron, Van Cleef & Arpels and Karl Lagerfeld also witnessed comparable quarter sales growth. That being said, a 17% decline in the average euro-to-dollar exchange rate masked such an upside resulting in a 4% drop in the quarterly European-based product sales in dollars.
Inter Parfums stated that it witnessed modest growth in the third quarter compared with the year-ago quarter. The company continued to face some supply chain-related issues, which pushed the delivery of some holiday gift sets into the next quarter. That said, the company’s Italian operations are running, with Ferragamo on track to become the second-largest brand under the U.S. operations banner during the year. Inter Parfums continues to see solid momentum in its travel retail business. The company’s travel amenities operation has started to experience growth.
Inter Parfums’ third-quarter gross profit margin was 64.9%, up 120 basis points from 63.7% reported in the year-ago quarter. For European-based operations, the gross profit margin was 69.5%, up from 66.6% posted in the year-ago quarter. The upside can be attributed to a stronger U.S. dollar during 2022 and a favorable impact from mix and pricing actions. However, higher transportation and component costs were a concern for the metric. For U.S. operations, the gross margin stood at 53.8%, up from 53.1% reported in the year-ago quarter. Gains from scale, pricing actions and favorable brand and giftset mix contributed to the upside.
SG&A expenses amounted to $117.4 million, up from $99.8 million reported in the year-ago quarter. For European operations, SG&A expenses increased to 42.1% of net sales from 38.8% reported in the year-ago quarter. The rise in such costs can largely be attributed to a return to promotional and advertising levels commensurate with sales. For U.S. operations, SG&A, as a percent of net sales, rose to 41.4% from 35.1% reported in the year-ago quarter. Apart from the abovementioned reason, rising salaries and benefits to expand the organization to support the startup of new brands were a downside.
Image Source: Zacks Investment Research
Other Financial Aspects
Inter Parfums ended the quarter with cash and cash equivalents of $41.3 million, long-term debt (excluding the current portion) of $107.9 million and total equity of $730.1 million.
Inter Parfums announced a quarterly dividend of 50 cents per share, payable on Dec 30, 2022, to shareholders of record as of Dec 15, 2022.
Other Updates
During 2022, the company introduced several scents, namely Montblanc Legend Red, CoachWild Rose, Coach Dreams Sunset, Coach Open Road, GUESS Uomo, Kate Spade Sparkle, Jimmy Choo ManAqua, Jimmy Choo I Want Choo Forever, Lanvin Mon Éclat and Boucheron Singulier. The company also launched brand extensions and flankers for several brands. In addition, the company unveiled Moncler’s debut scents at the beginning of 2022.
For the next year, the company’s new product pipeline for U.S. brands consists of new pillars for the Hollister and MCM brands. Moreover, the product pipeline is dominated by brand extensions and flankers. Management is on track with major launches for Ferragamo, Donna Karan and DKNY brands for 2024. In European operations, the company will launch a new fragrance for Kate Spade in 2023.
Guidance
The company continues to battle inflation, supply chain disruptions, COVID-19 restrictions in China, the strengthening of the U.S. dollar and fears of recession worldwide. Despite that, management is raising its 2022 guidance considering solid year-to-date performance and robust projections for the rest of the year. The company is optimistic about its business prospects and continues to invest to keep gaining market share and long-term growth.
Management now expects 2022 net sales of $1.025 billion, up from previous guidance of $1 billion. Earnings per share (EPS) are anticipated to come in at $3.40, higher than the earlier guidance of $3.25. The company expects to spend 21% of annual net sales on advertising and promotion in 2022.
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 Zacks Rank #3 (Hold) stock has increased 16.1% in the past six months against the industry’s 15.3% decline.
e.l.f. Beauty, a cosmetic company, currently sports a Zacks Rank #1 (Strong Buy). ELF has a trailing four-quarter earnings surprise of 92.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for e.l.f. Beauty’s current financial-year sales and EPS suggests growth of 24.5% and almost 31%, respectively, from the year-ago period’s reported figures.
Lamb Weston, a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 47.3%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 14.6% and 45.7%, respectively, from the year-ago reported numbers.
TreeHouse Foods, which manufactures and distributes private-label foods and beverages, carries a Zacks Rank #2 (Buy) at present. TreeHouse Foods has a trailing four-quarter earnings surprise of 56.3%, on average.
The Zacks Consensus Estimate for THS’ current financial-year sales and EPS suggests growth of 16.8% and 15.1%, respectively, from the year-ago reported numbers.
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Inter Parfums (IPAR) Q3 Earnings Beat Estimates, 2022 View Up
Inter Parfums, Inc. (IPAR - Free Report) delivered impressive third-quarter 2022 results, with the top and the bottom line increasing year over year. Quarterly earnings surpassed the Zacks Consensus Estimate. Management raised its 2022 guidance.
Results in Detail
Inter Parfums’ third-quarter earnings came in at $1.30 per share, which surpassed the Zacks Consensus Estimate of 99 cents. The metric increased 8% from $1.20 per share reported in the year-ago quarter.
Quarterly net sales increased 7% to $280 million compared with $263 million reported in the year-ago quarter.
In an earlier press release, management highlighted that third-quarter net sales rose 12% at comparable foreign currency rates. Inter Parfums’ Europe-based product sales came in at $198 million, down 4% from 2021 levels. U.S.-based product sales amounted to $82 million, surging 45% from third-quarter 2021.
Inter Parfums, Inc. Price, Consensus and EPS Surprise
Inter Parfums, Inc. price-consensus-eps-surprise-chart | Inter Parfums, Inc. Quote
In the company’s U.S. operations, new brands like Ferragamo, Donna Karan and DKNY generated 41% of the gains. Apart from this, organic growth from established brands like GUESS?, Oscar de la Renta, Hollister, and Abercrombie & Fitch also contributed to the upside.
Management highlighted that sales of its European operations increased 12% in euro, with the three largest brands Montblanc, Jimmy Choo and Coach, outperforming by 11%, 32% and 3% year over year, respectively. Several mid-sized brands, namely Kate Spade, Rochas, Boucheron, Van Cleef & Arpels and Karl Lagerfeld also witnessed comparable quarter sales growth. That being said, a 17% decline in the average euro-to-dollar exchange rate masked such an upside resulting in a 4% drop in the quarterly European-based product sales in dollars.
Inter Parfums stated that it witnessed modest growth in the third quarter compared with the year-ago quarter. The company continued to face some supply chain-related issues, which pushed the delivery of some holiday gift sets into the next quarter. That said, the company’s Italian operations are running, with Ferragamo on track to become the second-largest brand under the U.S. operations banner during the year. Inter Parfums continues to see solid momentum in its travel retail business. The company’s travel amenities operation has started to experience growth.
Inter Parfums’ third-quarter gross profit margin was 64.9%, up 120 basis points from 63.7% reported in the year-ago quarter. For European-based operations, the gross profit margin was 69.5%, up from 66.6% posted in the year-ago quarter. The upside can be attributed to a stronger U.S. dollar during 2022 and a favorable impact from mix and pricing actions. However, higher transportation and component costs were a concern for the metric. For U.S. operations, the gross margin stood at 53.8%, up from 53.1% reported in the year-ago quarter. Gains from scale, pricing actions and favorable brand and giftset mix contributed to the upside.
SG&A expenses amounted to $117.4 million, up from $99.8 million reported in the year-ago quarter. For European operations, SG&A expenses increased to 42.1% of net sales from 38.8% reported in the year-ago quarter. The rise in such costs can largely be attributed to a return to promotional and advertising levels commensurate with sales. For U.S. operations, SG&A, as a percent of net sales, rose to 41.4% from 35.1% reported in the year-ago quarter. Apart from the abovementioned reason, rising salaries and benefits to expand the organization to support the startup of new brands were a downside.
Image Source: Zacks Investment Research
Other Financial Aspects
Inter Parfums ended the quarter with cash and cash equivalents of $41.3 million, long-term debt (excluding the current portion) of $107.9 million and total equity of $730.1 million.
Inter Parfums announced a quarterly dividend of 50 cents per share, payable on Dec 30, 2022, to shareholders of record as of Dec 15, 2022.
Other Updates
During 2022, the company introduced several scents, namely Montblanc Legend Red, CoachWild Rose, Coach Dreams Sunset, Coach Open Road, GUESS Uomo, Kate Spade Sparkle, Jimmy Choo ManAqua, Jimmy Choo I Want Choo Forever, Lanvin Mon Éclat and Boucheron Singulier. The company also launched brand extensions and flankers for several brands. In addition, the company unveiled Moncler’s debut scents at the beginning of 2022.
For the next year, the company’s new product pipeline for U.S. brands consists of new pillars for the Hollister and MCM brands. Moreover, the product pipeline is dominated by brand extensions and flankers. Management is on track with major launches for Ferragamo, Donna Karan and DKNY brands for 2024. In European operations, the company will launch a new fragrance for Kate Spade in 2023.
Guidance
The company continues to battle inflation, supply chain disruptions, COVID-19 restrictions in China, the strengthening of the U.S. dollar and fears of recession worldwide. Despite that, management is raising its 2022 guidance considering solid year-to-date performance and robust projections for the rest of the year. The company is optimistic about its business prospects and continues to invest to keep gaining market share and long-term growth.
Management now expects 2022 net sales of $1.025 billion, up from previous guidance of $1 billion. Earnings per share (EPS) are anticipated to come in at $3.40, higher than the earlier guidance of $3.25. The company expects to spend 21% of annual net sales on advertising and promotion in 2022.
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 Zacks Rank #3 (Hold) stock has increased 16.1% in the past six months against the industry’s 15.3% decline.
Stocks to Consider
Some better-ranked stocks are e.l.f. Beauty (ELF - Free Report) , Lamb Weston (LW - Free Report) and TreeHouse Foods (THS - Free Report) .
e.l.f. Beauty, a cosmetic company, currently sports a Zacks Rank #1 (Strong Buy). ELF has a trailing four-quarter earnings surprise of 92.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for e.l.f. Beauty’s current financial-year sales and EPS suggests growth of 24.5% and almost 31%, respectively, from the year-ago period’s reported figures.
Lamb Weston, a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 47.3%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 14.6% and 45.7%, respectively, from the year-ago reported numbers.
TreeHouse Foods, which manufactures and distributes private-label foods and beverages, carries a Zacks Rank #2 (Buy) at present. TreeHouse Foods has a trailing four-quarter earnings surprise of 56.3%, on average.
The Zacks Consensus Estimate for THS’ current financial-year sales and EPS suggests growth of 16.8% and 15.1%, respectively, from the year-ago reported numbers.