Inter Parfums reports Q1 2016 sales at $111.5 million, up 2% from $109.2 million; at comparable foreign currency exchange rates, net sales increased 3%.
European operations led the way with $92.1 million in sales, a 5% increase over last year’s first quarter, and US based operations declined 14% to $19.4 million from $22.5 million. Net income also decreased to $7.3 million, or $0.24 per diluted share, from $10.0 million, or $0.32 per diluted share.
Gross margin was 63.9% of net sales compared to 61.9 in the previous year’s first quarter; S,G&A expense as a percentage of net sales was 48.3% compared to 42.6%; operating income was $17.5 million versus $21.1 million and operating margin was 15.7% compared to 19.3%.
With regard to U.S. based operations, Jean Madar, Chairman & CEO of Inter Parfums, Inc. noted, “As the year progresses and we unveil our new fragrances for the Abercrombie & Fitch and Hollister brands, as well as the new scents for the Oscar de la Renta and Agent Provocateur brands, we expect year-over-year quarter sales comparisons to improve. As we reported last month, our U.S. based operations set a high bar in last year’s first quarter with two major launches, Extraordinary by Oscar de la Renta and Icon by Dunhill.”
The European business, on the other hand, achieved top line growth due to the success of Montblanc, which achieved $35 million, and the $6.4 million incremental sales from the Rochas brand. “Jimmy Choo brand sales of $21.4 million were on par with last year’s first quarter,” Mader mentioned due to the launch of Jimmy Choo’s Illicit.
Discussing factors impacting profitability, Russell Greenberg, Executive Vice President and CFO of Inter Parfums, Inc., stated, “The improvement in our blended gross profit margin is attributable to our European based operations where the gross profit margin rose to 67.3% in the current first quarter from 64.7% in the first quarter of 2015. Approximately 40% of the increase is related to currency fluctuation, while the balance is the result of a favorable product mix, thanks in great part to our Rochas brand, which generated gross profit margins in excess of 75%. We closed the quarter with working capital of $352 million, including approximately $247 million in cash, cash equivalents and short-term investments, and $97.8 million of long-term debt associated with the Rochas acquisition last year.”
The company projects its 2016 net sales to be range of $500 million and $510 million and for net income attributable to Inter Parfums, Inc. to be between $1.05 and $1.10 excluding the impact of the nonrecurring tax settlement.
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