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Inter Parfums (IPAR) Gains on Solid Brands & Partnerships

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A robust brand portfolio is working well for Inter Parfums, Inc. (IPAR - Free Report) . The company is benefiting from solid growth across European and U.S. operations. These upsides have boosted first-quarter 2022 results, with the top and the bottom line increasing year over year. Quarterly earnings beat the Zacks Consensus Estimate.

Besides, management is committed to effective product launches and strategic partnerships to boost growth.

Let’s discuss in detail.

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Solid Performance & Bright View

During the first quarter of 2022, Inter Parfums’ net sales came in at $250.7 million, up 26% year over year. The 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. Its 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 an upside. Initial sales of Ferragamo and Ungaro legacy scents also drove the quarterly sales. Inter Parfums’ earnings came in at $1.10 per share, up from 87 cents per share reported in the year-ago quarter.

The company’s 2022 view suggests year-over-year top-and bottom-line growth. For 2022, Inter Parfums anticipates net sales of approximately $975 million. The metric reflects growth from $879.5 million reported in 2021. Management expects earnings per share (EPS) of $3.00 for 2022. The company reported an EPS of $2.75 in 2021.

Product Launches & Strategic Partnership

Inter Parfums’ focus on product launches to boost assortment strength is impressive. The company 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. Throughout 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. Management is keen on undertaking new licensing and acquisitions.

Inter Parfums is on track to expand its business through new licenses or acquisitions. In December 2021, Inter Parfums, through its subsidiary Interparfums Italia, signed a 10-year exclusive global licensing agreement with Emanuel Ungaro. The partnership aims to create, develop and distribute fragrances and fragrance-related products under the Emanuel Ungaro brand. In October 2021, Inter Parfums finalized the agreement with Salvatore Ferragamo S.p.A. Per the agreement, Inter Parfums now holds the exclusive worldwide license for the production and distribution of Salvatore Ferragamo brand perfumes.

Is All Rosy for Inter Parfums?

Inter Parfums is battling inflation with rising prices of components like glass, cardboard, wood and aluminum. A significant increase in energy and shipping costs is a major hurdle. Management noted that the Russian invasion of Ukraine has adversely impacted its operations across both countries. Apart from these, temporary China lockdowns and supply chain obstacles were a downside for first-quarter 2022 results.

Additionally, Inter Parfums’ has been grappling with higher selling, general and administrative (SG&A) expenses for a while. During the quarter, SG&A expenses amounted to $97.4 million, up 30% from $74.9 million reported in the year-ago quarter.

That being said, we believe that the abovementioned upsides are likely to keep this Zacks Rank #3 (Hold) company’s growth story going. IPAR’s stock has gained 1.8% in the past year against the industry’s 42.2% decline.

Looking for Better-Ranked Staple Bets? Check These

Some better-ranked stocks are Sysco Corporation (SYY - Free Report) , United Natural Foods (UNFI - Free Report) and Pilgrim’s Pride (PPC - Free Report) .

Sysco, which markets and distributes various food and related products, sports a Zacks Rank #1 (Strong Buy). SYY has a trailing four-quarter earnings surprise of 9.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Sysco’s current financial year sales and EPS suggests growth of 32.6% and 124.3%, respectively, from the year-ago reported number.

United Natural Foods distributes natural, organic, specialty, produce and conventional grocery and non-food products. UNFI currently sports a Zacks Rank #1.

The Zacks Consensus Estimate for UNFI’s current financial year sales and EPS suggests growth of 7.2% and 4.9%, respectively, from the year-ago period’s reported figures. United Natural Foods has a trailing four-quarter earnings surprise of 29.9%, on average.

Pilgrim’s Pride, which produces, processes, markets and distributes fresh, frozen and value-added chicken and pork products, carries a Zacks Rank #2 (Buy). PPC has a trailing four-quarter earnings surprise of 31.4%, on average.

The Zacks Consensus Estimate for Pilgrim’s Pride’s current financial year EPS suggests growth of 63.2% from the year-ago reported number.