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Inter Parfums (IPAR) Gains on Solid Brands & Partnerships
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Focus on strategic partnerships and effective product launches is favoring Inter Parfums, Inc. (IPAR - Free Report) . The provider of fragrances and related products is benefiting from solid brand performance.
These abovementioned upsides have boosted third-quarter 2022 results, with the top and bottom lines increasing year over year. The solid performance prompted management to raise its 2022 view. Impressively, the Zacks Rank #1 (Strong Buy) company’s stock has rallied 28.3% in the past three months compared with the industry’s 8.4% growth.
Let’s discuss this in detail.
Brand Strength Boosts Growth
In the third quarter of 2022, Inter Parfums’ U.S.-based product sales amounted to $82 million, increasing 45% year over year. 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.
Quarterly sales of its European operations increased 12% in euros, 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.
Image Source: Zacks Investment Research
Bright View
The company is optimistic about its business prospects and continues investing to gain 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 are anticipated to come in at $3.40, higher than the earlier guidance of $3.25.
For 2023, management anticipates net sales of $1.11 billion, which will likely result in earnings per diluted share of $3.70. This indicates net sales and earnings per diluted share growth of 8% and 9%, respectively, from the 2022 guided figures of $1.025 billion (net sales) and $3.40 (earnings per diluted share). Excluding certain one-time items, management is likely to expect 12% earnings per diluted share growth in 2023.
Inter Parfums is likely to expect growth in 2023, driven by its solid brand portfolio and global distribution network. Further, sales growth will likely be backed by product launches. Management expects to gain from sustained travel retail business growth, a more streamlined supply-chain structure and modest pricing actions (which are likely to be undertaken in 2023 beginning).
Strategic Partnerships Hold Promise
Inter Parfums is on track to expand its business through new licenses or acquisitions. Recently, its majority-owned Paris-based subsidiary, Interparfums SA, signed a license agreement with Lacoste — a well-known fashion sports brand. Both parties have entered a worldwide exclusive 15-year fragrance license agreement, effective Jan 1, 2024. The company is optimistic about the partnership with well-established fragrance brands like Donna Karan and DKNY.
In December 2021, Inter Parfums, through its subsidiary Interparfums Italia signed a 10-year exclusive global licensing agreement with Emanuel Ungaro. In October 2021, Inter Parfums finalized the agreement with Salvatore Ferragamo S.p.A. Per the agreement, Inter Parfums holds the exclusive worldwide license for the production and distribution of Salvatore Ferragamo brand perfumes.
Product Launches on Track
Inter Parfums is well-positioned to cater to elevated demand in the fragrance space. During 2022, the company introduced several scents, namely Montblanc Legend Red, CoachWild Rose, Coach Dreams Sunset, Coach Open Road, GUESS Uomo and Kate Spade Sparkle, among others. 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. 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.
Certainly, focusing on effective product launches along with the aforementioned upsides will keep IPAR in investors’ good books.
Conagra Brands, operating as a consumer-packaged goods food company, currently carries a Zacks Rank of 2 (Buy). CAG has a trailing four-quarter earnings surprise of 1.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra Brands’ current financial year sales and earnings suggests growth of 5.8% and 3.8%, respectively, from the corresponding year-ago reported figures.
Campbell Soup, which manufactures and markets food and beverage products, currently carries a Zacks Rank of 2. CPB has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Campbell Soup’s current financial-year sales and earnings suggests growth of 8.2% and 4.9%, respectively, from the corresponding year-ago reported figures.
Mondelez International, which manufactures, markets, and sells snack food and beverage products, carries a Zacks Rank 2. MDLZ has a trailing four-quarter earnings surprise of 6.4%, on average.
The Zacks Consensus Estimate for Mondelez’s current financial-year sales and earnings suggests growth of 8.7% and 2.4%, respectively, from the corresponding year-ago reported figures.
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Inter Parfums (IPAR) Gains on Solid Brands & Partnerships
Focus on strategic partnerships and effective product launches is favoring Inter Parfums, Inc. (IPAR - Free Report) . The provider of fragrances and related products is benefiting from solid brand performance.
These abovementioned upsides have boosted third-quarter 2022 results, with the top and bottom lines increasing year over year. The solid performance prompted management to raise its 2022 view. Impressively, the Zacks Rank #1 (Strong Buy) company’s stock has rallied 28.3% in the past three months compared with the industry’s 8.4% growth.
Let’s discuss this in detail.
Brand Strength Boosts Growth
In the third quarter of 2022, Inter Parfums’ U.S.-based product sales amounted to $82 million, increasing 45% year over year. 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.
Quarterly sales of its European operations increased 12% in euros, 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.
Image Source: Zacks Investment Research
Bright View
The company is optimistic about its business prospects and continues investing to gain 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 are anticipated to come in at $3.40, higher than the earlier guidance of $3.25.
For 2023, management anticipates net sales of $1.11 billion, which will likely result in earnings per diluted share of $3.70. This indicates net sales and earnings per diluted share growth of 8% and 9%, respectively, from the 2022 guided figures of $1.025 billion (net sales) and $3.40 (earnings per diluted share). Excluding certain one-time items, management is likely to expect 12% earnings per diluted share growth in 2023.
Inter Parfums is likely to expect growth in 2023, driven by its solid brand portfolio and global distribution network. Further, sales growth will likely be backed by product launches. Management expects to gain from sustained travel retail business growth, a more streamlined supply-chain structure and modest pricing actions (which are likely to be undertaken in 2023 beginning).
Strategic Partnerships Hold Promise
Inter Parfums is on track to expand its business through new licenses or acquisitions. Recently, its majority-owned Paris-based subsidiary, Interparfums SA, signed a license agreement with Lacoste — a well-known fashion sports brand. Both parties have entered a worldwide exclusive 15-year fragrance license agreement, effective Jan 1, 2024. The company is optimistic about the partnership with well-established fragrance brands like Donna Karan and DKNY.
In December 2021, Inter Parfums, through its subsidiary Interparfums Italia signed a 10-year exclusive global licensing agreement with Emanuel Ungaro. In October 2021, Inter Parfums finalized the agreement with Salvatore Ferragamo S.p.A. Per the agreement, Inter Parfums holds the exclusive worldwide license for the production and distribution of Salvatore Ferragamo brand perfumes.
Product Launches on Track
Inter Parfums is well-positioned to cater to elevated demand in the fragrance space. During 2022, the company introduced several scents, namely Montblanc Legend Red, CoachWild Rose, Coach Dreams Sunset, Coach Open Road, GUESS Uomo and Kate Spade Sparkle, among others. 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. 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.
Certainly, focusing on effective product launches along with the aforementioned upsides will keep IPAR in investors’ good books.
3 Solid Staple Picks
Some other top-ranked stocks are Conagra Brands (CAG - Free Report) , Campbell Soup (CPB - Free Report) and Mondelez International, Inc. (MDLZ - Free Report) .
Conagra Brands, operating as a consumer-packaged goods food company, currently carries a Zacks Rank of 2 (Buy). CAG has a trailing four-quarter earnings surprise of 1.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra Brands’ current financial year sales and earnings suggests growth of 5.8% and 3.8%, respectively, from the corresponding year-ago reported figures.
Campbell Soup, which manufactures and markets food and beverage products, currently carries a Zacks Rank of 2. CPB has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Campbell Soup’s current financial-year sales and earnings suggests growth of 8.2% and 4.9%, respectively, from the corresponding year-ago reported figures.
Mondelez International, which manufactures, markets, and sells snack food and beverage products, carries a Zacks Rank 2. MDLZ has a trailing four-quarter earnings surprise of 6.4%, on average.
The Zacks Consensus Estimate for Mondelez’s current financial-year sales and earnings suggests growth of 8.7% and 2.4%, respectively, from the corresponding year-ago reported figures.