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Inter Parfums Q1 Sales Soft, Launches Delayed Amid Coronavirus
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Inter Parfums, Inc. (IPAR - Free Report) released sales numbers for first-quarter 2020. For the three months ended Mar 31, 2020, net sales amounted to $144.8 million, down 18.7% (down 17.8% at constant currency) from $178.2 million reported in the year-ago quarter.
The company’s Europe-based operations registered net sales of $114.1 million in the first quarter, which declined 20.6% year over year.In U.S.-based operations, net sales dropped 10.9% to $30.7 million during the first quarter.
The company’s two largest brands Coach and GUESS? (GES - Free Report) witnessed solid sales growth during the quarter under review. Earlier this year, Inter Parfums launched Coach Dreams thatdrove the brands sales by 35.9%. Further, the already existing products and brand extensions under GUESS? helped the brand to register a 28.9% sales growth in the first quarter.
However, growth in the above mentioned brands were more than offset by declines in majority of the company’s other brands. Incidentally, comparable sales declined for other major brands due to closures of almost all points of sale worldwide due to the coronavirus pandemic. Moreover, the company reported robust growth in brands like Montblanc and Jimmy Choo in the year-ago quarter, which now serves as a high benchmark in 2020 for Inter Parfums.
Apart from this, Inter Parfums has been undertaking several cost-control measures to preserve its cash flow amid the coronavirus crisis. Keeping in these lines, the company postponed various plans including product launches under bands like Kate Spade New York, Jimmy Choo, Anna Sui and GUESS? until 2021. Also, advertising and promotion costs related to such events have been postponed to 2021. Going ahead, management believes that such stringent cost-containment efforts will reduce the impact of lower sales on the company’s profits.
Due to the unpredictable impact of the coronavirus outbreak, the company has decided to temporarily suspend its quarterly cash dividend to maintain a sound financial position amid this crisis. Nevertheless, Inter Parfums is seeing some rebound in its Asia business.
Coronavirus has wreaked havoc in the global market. Companies in the cosmetics space are bearing the brunt of soft traffic and restricted travel 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 are delaying product launches, given the current situation and its chances to persist in the near term at least.
In an earlier press release, the company stated that due to the outbreak and its impact on revenues and costs, it has withdrawn full-year 2020 guidance that was issued along with its fourth-quarter earnings results on Mar 3. In fact, coronavirus-induced worries also put pressure on the guidance of cosmetic players like The Estee Lauder Companies Inc. (EL - Free Report) and Nu Skin Enterprises, Inc. (NUS - Free Report) when they reported quarterly results. Moreover, Ulta Beauty withdrew its recently provided guidance for fiscal 2020 amid the growing spread of COVID-19.
Coming back to Inter Parfums, we note that shares of this Zacks Rank #3 (Hold) company have plunged 37.2% in the past three months compared with the industry’s decline of 27.8%.
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Inter Parfums Q1 Sales Soft, Launches Delayed Amid Coronavirus
Inter Parfums, Inc. (IPAR - Free Report) released sales numbers for first-quarter 2020. For the three months ended Mar 31, 2020, net sales amounted to $144.8 million, down 18.7% (down 17.8% at constant currency) from $178.2 million reported in the year-ago quarter.
The company’s Europe-based operations registered net sales of $114.1 million in the first quarter, which declined 20.6% year over year.In U.S.-based operations, net sales dropped 10.9% to $30.7 million during the first quarter.
The company’s two largest brands Coach and GUESS? (GES - Free Report) witnessed solid sales growth during the quarter under review. Earlier this year, Inter Parfums launched Coach Dreams thatdrove the brands sales by 35.9%. Further, the already existing products and brand extensions under GUESS? helped the brand to register a 28.9% sales growth in the first quarter.
However, growth in the above mentioned brands were more than offset by declines in majority of the company’s other brands. Incidentally, comparable sales declined for other major brands due to closures of almost all points of sale worldwide due to the coronavirus pandemic. Moreover, the company reported robust growth in brands like Montblanc and Jimmy Choo in the year-ago quarter, which now serves as a high benchmark in 2020 for Inter Parfums.
Apart from this, Inter Parfums has been undertaking several cost-control measures to preserve its cash flow amid the coronavirus crisis. Keeping in these lines, the company postponed various plans including product launches under bands like Kate Spade New York, Jimmy Choo, Anna Sui and GUESS? until 2021. Also, advertising and promotion costs related to such events have been postponed to 2021. Going ahead, management believes that such stringent cost-containment efforts will reduce the impact of lower sales on the company’s profits.
Due to the unpredictable impact of the coronavirus outbreak, the company has decided to temporarily suspend its quarterly cash dividend to maintain a sound financial position amid this crisis. Nevertheless, Inter Parfums is seeing some rebound in its Asia business.
Coronavirus has wreaked havoc in the global market. Companies in the cosmetics space are bearing the brunt of soft traffic and restricted travel 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 are delaying product launches, given the current situation and its chances to persist in the near term at least.
In an earlier press release, the company stated that due to the outbreak and its impact on revenues and costs, it has withdrawn full-year 2020 guidance that was issued along with its fourth-quarter earnings results on Mar 3. In fact, coronavirus-induced worries also put pressure on the guidance of cosmetic players like The Estee Lauder Companies Inc. (EL - Free Report) and Nu Skin Enterprises, Inc. (NUS - Free Report) when they reported quarterly results. Moreover, Ulta Beauty withdrew its recently provided guidance for fiscal 2020 amid the growing spread of COVID-19.
Coming back to Inter Parfums, we note that shares of this Zacks Rank #3 (Hold) company have plunged 37.2% in the past three months compared with the industry’s decline of 27.8%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>