Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Dividend, Conference Call, Webcast

Inter Parfums, Inc. Reports Record 2022 Second Quarter Results


Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported record results for the second quarter and six months ended June 30, 2022.

Second Quarter Highlights:

($ in millions, except per share data)

2022

2021

% Change

Net Sales

$244.7

$207.6

18%

Net Income attributable to IP

$27.6

$22.7

22%

Diluted EPS

$0.86

$0.71

21%

Of note, the average dollar/euro exchange rate for the current second quarter was 1.06 compared to 1.20 in the second quarter of 2021 while for the first half of 2022, the average dollar/euro exchange rate was 1.09 compared to 1.20 in the first half of 2021. A strong U.S. dollar has a negative impact on our net sales. However, earnings are positively affected by a strong dollar, because almost 50% of net sales of our European operations are denominated in U.S. dollars, while almost all their costs are incurred in euro.

Jean Madar, Chairman & CEO of Inter Parfums, Inc. noted, "Business continues to be very strong. Year-to-date, all regions outperformed last year with the understandable exception of Eastern Europe. Sales in North America, Western Europe, and Asia, our three largest markets, rose 8%, 40% and 39%, respectively. Similarly, our smaller markets performed very well with sales growth of 31% in the Middle East and 35% in Central and South America. Through the first half, our U.S. distribution subsidiary for European based products encountered shipping related issues following a change in the distribution software by its logistics partner which helps explain why North American sales grew at a more modest pace."

Through the first half, our largest brands, Montblanc, Jimmy Choo, Coach and GUESS have performed exceptionally well with sales up 14% (25% in euro), 6% (16% in euro), 17% (29% in euro) and 37%, respectively. In the current first half, we booked sales of our first Moncler fragrance along with Ferragamo and Ungaro legacy fragrance sales that were not included in our 2021 reported first half sales. Sales of several brands within our U.S. operations have surged, notably Abercrombie & Fitch, Hollister and Oscar de la Renta which produced year-to-date sales gains of 50%, 35% and 26%, respectively. MCM, which debuted its first ever scent in the second quarter of last year, has outperformed our best expectations and as of mid-year 2022, ranks third in sales among our U.S. based brands. Thus far this year, we brought Montblanc Legend Red, Coach Wild Rose and Coach Dreams Sunset, GUESS Uomo, Kate Spade Sparkle, Jimmy Choo Man Aqua and Lanvin Mon Éclat to market. Additional flankers and brand extensions are planned for the second half, along with important new men's fragrance pillars for Coach and Boucheron. Furthermore, effective July 1, 2022, the Donna Karan and DKNY fragrance business, joins our portfolio."

Russell Greenberg, Executive Vice President and CFO noted, "Throughout 2021, our sales far exceeded expectations and as a result, our promotion and advertising expenses, which are an integral part of our success, didn't keep pace. This year, we have stepped up our investment in promotion and advertising to support new product launches and to build brand awareness to more accurately reflect our quarterly and expected annual sales. Promotion and advertising approximated 19% and 16% of net sales for the three and six months ended June 30, 2022, respectively, as compared to 16% and 14% for the corresponding periods of the prior year. For the full year, we continue to budget aggregate promotion and advertising expense of 21% of net sales with the greatest amount spent in the fourth quarter which serves as a sales catalyst for the coming year."

Mr. Greenberg also noted, "Our 2022 year-to-date bottom lines benefitted from a positive swing in ?other income' dominated by gains foreign currency. Our consolidated effective tax rate was 24% for the current first half, as compared to 30.0% for the corresponding periods of the prior year."

Mr. Greenberg continued, "We closed the second quarter with working capital of $445 million, including approximately $196 million in cash, cash equivalents and short-term investments, and a working capital ratio of 2.9 to 1. The $117 million of long-term debt primarily relates to the acquisition of the new headquarters of Interparfums SA, our 73% owned Paris based subsidiary, which was financed by a 10-year ?120 million (approximately $125 million) bank loan. Approximately ?80 million of the variable rate debt was swapped for fixed interest rate debt with a maximum rate of 2% per annum."

Affirms 2022 Guidance

Mr. Greenberg concluded, "Record year-to-date sales combined with orders scheduled for shipment in the second half of the year point to 2022 net sales of approximately $1 billion, resulting in diluted net income per share of $3.25. Guidance assumes that the average dollar/euro exchange rate remains at current levels, and there is no significant resurgence of the COVID-19 pandemic."

Dividend

The Company's regular quarterly cash dividend of $0.50 per share will be paid on September 30, 2022 to shareholders of record on September 15, 2022.

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 AM ET on Wednesday, August 10, 2022. Interested parties may participate in the call by dialing (201) 493-6749; please call in 10 minutes before the conference call is scheduled to begin and ask for the Inter Parfums call. The conference call will also be broadcast live over the Internet. To listen to the live call, please go to www.interparfumsinc.com and click on the Investor Relations section. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days at Inter Parfums' website.

Founded in 1982, Inter Parfums, Inc. develops, manufactures and distributes prestige perfumes and cosmetics as the exclusive worldwide licensee for Abercrombie & Fitch, Anna Sui, Boucheron, Coach, Donna Karan, DKNY, Ferragamo, Graff, GUESS, Hollister, Jimmy Choo, Karl Lagerfeld, Kate Spade, MCM, Moncler, Montblanc, Oscar de la Renta, S.T. Dupont, Ungaro and Van Cleef & Arpels. Inter Parfums is also the owner of Lanvin fragrances and the Rochas brand. Through its global distribution network, the Company's products are sold in over 120 countries.

Statements in this release which are not historical in nature are forward-looking statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. In some cases you can identify forward-looking statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would," or similar words. You should not rely on forward-looking statements, because actual events or results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors. These factors include, but are not limited to, the risks and uncertainties discussed under the headings "Forward Looking Statements" and "Risk Factors" in Inter Parfums' annual report on Form 10-K for the fiscal year ended December 31, 2021 and the reports Inter Parfums files from time to time with the Securities and Exchange Commission. Inter Parfums does not intend to and undertakes no duty to update the information contained in this press release.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Net sales

 

$

244,725

 

 

$

207,573

 

 

$

495,403

 

 

$

406,101

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

90,943

 

 

 

75,223

 

 

 

182,963

 

 

 

148,502

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

153,782

 

 

 

132,350

 

 

 

312,440

 

 

 

257,599

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

108,385

 

 

 

87,695

 

 

 

205,825

 

 

 

162,591

 

 

 

 

 

 

 

 

 

 

Impairment loss

 

 

--

 

 

 

--

 

 

 

--

 

 

 

2,394

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

45,397

 

 

 

44,655

 

 

 

106,615

 

 

 

92,614

 

 

 

 

 

 

 

 

 

 

Other expenses (income):

 

 

 

 

 

 

 

 

Interest expense

 

 

1,023

 

 

 

1,270

 

 

 

1,907

 

 

 

1,647

 

(Gain) loss on foreign currency

 

 

(279

)

 

 

309

 

 

 

(2,518

)

 

 

(1,557

)

Interest and investment (income) loss

 

 

(464

)

 

 

(768

)

 

 

1,002

 

 

 

(1,155

)

Other (income) expense

 

 

(328

)

 

 

93

 

 

 

(444

)

 

 

(98

)

 

 

 

 

 

 

 

 

 

 

 

 

(48

)

 

 

904

 

 

 

(53

)

 

 

(1,163

)

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

45,445

 

 

 

43,751

 

 

 

106,668

 

 

 

93,777

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

10,925

 

 

 

14,715

 

 

 

25,857

 

 

 

28,115

 

 

 

 

 

 

 

 

 

 

Net income

 

 

34,520

 

 

 

29,036

 

 

 

80,811

 

 

 

65,662

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to the noncontrolling interest

6,903

6,379

 

17,895

15,343

 

 

 

 

 

 

 

 

 

Net income attributable to Inter Parfums, Inc.

 

$

27,617

$

22,657

 

$

62,916

 

$

50,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Inter Parfums, Inc. common shareholders:

 

 

 

 

 

 

 

 

Basic

 

$

0.87

 

 

$

0.72

 

 

$

1.98

 

 

$

1.59

 

Diluted

 

$

0.86

 

 

$

0.71

 

 

$

1.97

 

 

$

1.58

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

31,845

 

 

 

31,653

 

 

 

31,843

 

 

 

31,642

 

Diluted

 

 

31,952

 

 

 

31,799

 

 

 

31,981

 

 

 

31,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.50

 

 

$

0.25

 

 

$

1.00

 

 

$

0.50

 

 

 CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

 

ASSETS

 

 

June 30,
2022

 

December 31,
2021

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

52,235

 

 

$

159,613

 

Short-term investments

 

 

143,642

 

 

 

160,014

 

Accounts receivable, net

 

 

192,547

 

 

 

159,281

 

Inventories

 

 

265,835

 

 

 

198,914

 

Receivables, other

 

 

7,441

 

 

 

10,308

 

Other current assets

 

 

18,304

 

 

 

21,375

 

Income taxes receivable

 

 

223

 

 

 

210

 

Total current assets

 

 

680,227

 

 

 

709,715

 

Property, equipment and leasehold improvements, net

 

 

162,447

 

 

 

149,352

 

Right-of-use assets, net

 

 

29,792

 

 

 

33,728

 

Trademarks, licenses and other intangible assets, net

 

 

196,211

 

 

 

214,047

 

Deferred tax assets

 

 

9,836

 

 

 

7,936

 

Other assets

 

 

23,939

 

 

 

30,586

 

Total assets

 

$

1,102,452

 

 

$

1,145,364

 

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

 

Current portion of long-term debt

 

$

13,342

 

 

$

15,911

 

Current portion of lease liabilities

 

 

4,850

 

 

 

6,014

 

Accounts payable ? trade

 

 

83,409

 

 

 

81,980

 

Accrued expenses

 

 

122,061

 

 

 

136,677

 

Income taxes payable

 

 

11,837

 

 

 

4,328

 

Total current liabilities

 

 

235,499

 

 

 

244,910

 

 

 

 

 

 

Long?term debt, less current portion

 

 

117,354

 

 

 

132,902

 

Lease liabilities, less current portion

 

 

26,594

 

 

 

29,220

 

Equity:

 

 

 

 

Inter Parfums, Inc. shareholders' equity:

 

 

 

 

Preferred stock, $.001 par; authorized 1,000,000 shares; none issued

 

 

--

 

 

 

--

 

Common stock, $.001 par; authorized 100,000,000 shares; outstanding 31,845,965 and 31,830,420 shares at June 30, 2022 and December 31, 2021, respectively

 

32

 

 

 

32

 

Additional paid-in capital

 

 

84,316

 

 

 

87,132

 

Retained earnings

 

 

593,367

 

 

 

560,663

 

Accumulated other comprehensive loss

 

 

(70,426

)

 

 

(38,432

)

Treasury stock, at cost, 9,864,805 shares at June 30, 2022 and December 31, 2021

 

 

(37,475

)

 

 

(37,475

)

Total Inter Parfums, Inc. shareholders' equity

 

 

569,814

 

 

 

571,920

 

Noncontrolling interest

 

 

153,191

 

 

 

166,412

 

Total equity

 

 

723,005

 

 

 

738,332

 

Total liabilities and equity

 

$

1,102,452

 

 

$

1,145,364

 

 


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