The coronavirus pandemic has rattled most sectors across the globe, with the cosmetics space being no exception. Incidentally,
Inter Parfums, Inc. ( IPAR - Free Report) has issued a business update, including the withdrawal of the guidance. Due to the outbreak and its impact on revenues and costs, management has withdrawn full-year 2020 guidance, which was issued along with its fourth-quarter earnings results on Mar 3. Management in its last earnings call stated that if the prevalence of the coronavirus impact is limited to the initial few months of 2020, it expects net sales and net income to be in line with 2019 numbers. In 2019, Inter Parfums had generated net sales of $713.5 million, whereas net income was $1.90 per share. Notably, coronavirus has wreaked havoc in the global market. Companies in the cosmetics space are bearing the brunt of soft traffic stemming from consumers in big cities staying indoors to contain further spread of the virus. Also, the pandemic has led to store closures and limited hours of operations. Apart from this, cosmetic companies like Inter Parfums are delaying product launches, given the current situation and its chances to persist in the near term at least. To top it, coronavirus and its deadly spread beyond China have reduced global travel. Certainly, this is a blow to the travel retail network, which plays a vital role in the sales of cosmetic players. VIDEO We note that coronavirus-led worries also weighed on the guidance of other cosmetic players like The Estee Lauder Companies Inc. ( EL - Free Report) and Nu Skin Enterprises, Inc. ( NUS - Free Report) , when they reported quarterly results recently. Moreover, beauty retailer, Ulta Beauty, Inc. ( ULTA - Free Report) , announced temporary store closure plans and withdrew its recently provided guidance for fiscal 2020 amid the growing spread of COVID-19. Meanwhile, Inter Parfums, in its latest release, informed its investors that they are taking enhanced precautionary measures, including implementation of work from home for several employees, among other moves. Moreover, management believes that Inter Parfums is financially and operationally sound to withstand the current crisis. The company entered 2020 with cash, cash equivalents and short-term investments of $253 million as well as the long-term debt of just $10.7 million. Also, Inter Parfums is on track with optimizing fixed expenses and protecting cash flow amid the COVID-19 crisis. However, the previously announced quarterly dividend of 33 cents per share will be paid out as per schedule. Well, Inter Parfums is already seeing some rebound in its Asia business. Of late, it has been witnessing a restart of normal sales in South Korea and China, with strong online sales in the region. In this view, the company is on track with rapidly filling the distribution channels to maintain a reasonable inventory level for the future.
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