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Why Is Inter Parfums (IPAR) Up 18.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Inter Parfums (IPAR - Free Report) . Shares have added about 18.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Inter Parfums due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Inter Parfums Q3 Earnings Beat Estimates, 2022 View Up
Inter Parfums 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. 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.
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. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -55.18% due to these changes.
VGM Scores
Currently, Inter Parfums has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Inter Parfums has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Inter Parfums is part of the Zacks Cosmetics industry. Over the past month, Estee Lauder (EL - Free Report) , a stock from the same industry, has gained 10.8%. The company reported its results for the quarter ended September 2022 more than a month ago.
Estee Lauder reported revenues of $3.93 billion in the last reported quarter, representing a year-over-year change of -10.5%. EPS of $1.37 for the same period compares with $1.89 a year ago.
Estee Lauder is expected to post earnings of $1.29 per share for the current quarter, representing a year-over-year change of -57.1%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Estee Lauder. Also, the stock has a VGM Score of F.
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Why Is Inter Parfums (IPAR) Up 18.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Inter Parfums (IPAR - Free Report) . Shares have added about 18.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Inter Parfums due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Inter Parfums Q3 Earnings Beat Estimates, 2022 View Up
Inter Parfums 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. 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.
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. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -55.18% due to these changes.
VGM Scores
Currently, Inter Parfums has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Inter Parfums has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Inter Parfums is part of the Zacks Cosmetics industry. Over the past month, Estee Lauder (EL - Free Report) , a stock from the same industry, has gained 10.8%. The company reported its results for the quarter ended September 2022 more than a month ago.
Estee Lauder reported revenues of $3.93 billion in the last reported quarter, representing a year-over-year change of -10.5%. EPS of $1.37 for the same period compares with $1.89 a year ago.
Estee Lauder is expected to post earnings of $1.29 per share for the current quarter, representing a year-over-year change of -57.1%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Estee Lauder. Also, the stock has a VGM Score of F.