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Inter Parfums (IPAR) Q1 Earnings Top Estimates, Sales Rise Y/Y

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Inter Parfums, Inc. (IPAR - Free Report) delivered impressive first-quarter 2022 results, with the top and the bottom line increasing year over year. Quarterly earnings beat the Zacks Consensus Estimate. Results gained from sales growth across the company’s European and U.S.-based operations. Its largest and mid-sized brands delivered impressive growth in the quarter.

That said, management highlighted that it is operating amid a tough business environment, thanks to the resurgence of coronavirus in certain regions like China. Apart from this, the after-effects of the pandemic are putting pressure on retail traffic, travel, inventory sourcing and costs and supply chain, transportation and logistics in other regions. Also, the war across Eastern Europe is a headwind.

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

 

Results in Detail

Inter Parfums’ first-quarter earnings came in at $1.10 per share, which surpassed the Zacks Consensus Estimate of 94 cents. The metric increased from 87 cents per share reported in the year-ago quarter.

Quarterly net sales came in at $250.7 million, up 26% from $198.5 million reported in the year-ago quarter.

In an earlier press release, Inter Parfums highlighted that first-quarter net sales rallied 30% at comparable foreign currency rates. The company’s Europe-based product sales came in at $182.2 million, up 14% from 2021 levels. U.S.-based product sales amounted to $68.5 million, surging 77% from first-quarter 2021 levels.

Inter Parfums’ largest brands delivered solid sales performance. Montblanc, Jimmy Choo, Coach and GUESS brand sales increased 22%, 7%, 22% and 36%, respectively, during the first quarter of 2022. Management debuted Montblanc Legend Red, a new Coach signature scent extension and GUESS Uomo during this time. These debutants contributed to the double-digit brand sales gains. The company’s mid-sized brands like Abercrombie & Fitch, Kate Spade, Oscar de la Renta and Van Cleef & Arpels also delivered double-digit sales gains. Additional sales from initial product rollouts from MCM and Moncler brand were also an upside. Initial sales of Ferragamo and Ungaro legacy scents also drove the quarterly sales.

Quarterly sales increased 12% in North America, while the same increased 41% across the Western Europe and Asia/Pacific markets. Sales in the Middle East, Central and South America and Eastern Europe increased 27%, 38% and 13%, respectively. Management highlighted that the travel retail business is starting to pick up the pace. The strong dollar against the euro dampened sales generated by European brands. The company’s U.S. distribution subsidiary for European-based products witnessed issues associated with shipping. These factors affected Inter Parfums’ U.S. sales of European brands in the quarter under review.

Inter Parfums’ first-quarter gross margin was $158.7 million, up from $125.2 million reported in the year-ago quarter. The gross margin for the company’s European operations came in at almost 66.8%, up from 65.5% reported in the year-ago quarter. The upside can mainly be attributed to a stronger U.S. dollar. In the United States operations, the gross profit margin stood at 53.9%, up from 53.2% in 2021.

SG&A expenses amounted to $97.4 million, up 30% from $74.9 million reported in the year-ago quarter. SG&A expense as a percentage of net sales expanded 100 basis points to 39%.

The company reported an operating income of $61.2 million, up from $48 million reported in the year-ago quarter. The operating margin remained unchanged year over year at 24%.

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Image Source: Zacks Investment Research

Other Financial Aspects

Inter Parfums ended the quarter with cash and cash equivalents of $110.1 million, long-term debt (excluding the current portion) of $125.2 million and total equity of $758.2 million.

Inter Parfums announced a quarterly dividend of 50 cents per share, payable on Jun 30, 2022, to shareholders of record as of Jun 15, 2022.

Other Updates

Inter Parfums is benefitting from an impressive fragrance industry worldwide. Management is on track to officially rollout the Moncler in the second quarter. The company’s new Jimmy Choo Man Aqua and Lanvin Mon Éclat also debut in the second quarter. Through the year management will unveil many extensions and flankers in many of the company’s brands. Inter Parfums expects Donna Karan and DKNY fragrances to join its brand portfolio in July.

Guidance

The company reiterated its guidance for 2022. The company anticipates 2022 net sales of roughly $975 and earnings per share (EPS) are expected to be $3.00. Management highlighted that it witnessed record sales in April, a trend that is continuing into May.The guidance is based on the assumption of no resurgence in coronavirus cases and the current level of the average dollar/euro exchange rate.

The Zacks Rank #2 (Buy) stock has increased 9.9% in the past year against the industry’s of 39.8% decline.

3 Hot Staple Bets

Some better-ranked stocks are Olaplex Holdings, Inc. (OLPX - Free Report) , Sysco Corporation (SYY - Free Report) and McCormick & Company, Incorporated (MKC - Free Report) .

Olaplex, which manufactures and sells hair care products, carries a Zacks Rank #2, at present. OLPX’s earnings per share matched the Zacks Consensus Estimate in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Olaplex’s current financial year sales and EPS suggests growth of 37.2% and 35%, respectively, from the year-ago period’s reported figures.

Sysco, which engages in the marketing and distribution of various food and related products, carries a Zacks Rank #2 at present. SYY has a trailing four-quarter earnings surprise of 3.7%, on average.

The Zacks Consensus Estimate for Sysco’s current financial-year sales and EPS suggests growth of 28.9% and 111.1%, respectively, from the year-ago reported number.  

McCormick, the manufacturer, marketer and distributor of spices, seasoning mixes and condiments, currently carries a Zacks Rank #2. MKC has a trailing four-quarter earnings surprise of 7.3%, on average.

The Zacks Consensus Estimate for McCormick’s current financial-year sales and EPS suggests growth of nearly 5% and 3.9%, respectively, from the year-ago reported figure.