Inter Parfums (IPAR) Surges More Than 60% in a Year: Here's Why
Inter Parfums (IPAR) has been focused on undertaking product launches to strengthen assortments. The company is expanding its business through strateg...
Inter Parfums, Inc. IPAR looks solid courtesy of focus on product launches to boost assortment strength. The company is on track to expand its business through strategic partnerships. These upsides aided its second-quarter 2021 results, with the top and the bottom line increasing year over year. Earnings surpassed the Zacks Consensus Estimate and sales were in line with the same.
The Zacks Rank #1 (Strong Buy) company’s shares have surged 63.9% in the past year compared with the industry’s 45.4% growth. The stock has comfortably outpaced the Zacks Consumer Staples sector’s growth of 11.3%.
Let’s take a closer look.
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Solid Performance Across Regions
During second-quarter 2021, earnings and net sales increased from 2019 level, which serves as a better base for comparison since second-quarter 2020 was majorly affected by pandemic-led barriers. Quarterly earnings increased 82% from second-quarter 2019 levels. Net sales rallied 25% same period’s tally.
Europe-based product sales increased 28.3% to $161.2 million, whereas U.S.-based product sales ascended 14.2% to $46.4 million from second-quarter 2019 levels. In European operations, Montblanc, Jimmy Choo and Coach brands registered sales growth of 27.3%, 64.9% and 22.4%, respectively. Apart from these, sales growth was backed by initial sales of the Kate Spade signature collection, which marked its debut in the first quarter. In U.S. operations, the jump in sales was majorly driven by the GUESS brand, which gained on continued legacy fragrance sales along with the new Bella Vita line. Contributions from the Abercrombie & Fitch brand and the launch of Oscar de la Renta’s Alibi also fueled sales growth.
Product Launches on Track
Inter Parfumsis on track to rollout products that were revealed in the first half of the year. The launches include Alibi for Oscar de la Renta, Bella Vita for GUESS, I Want Choo for Jimmy Choo, Coach Sunset Dreams, the Kate Spade signature scent and Rochas Girl among others. The company is impressed with the performance of MCM genderfluid fragrance that was introduced in first-quarter 2021. For the rest of the year, the company’s new product pipeline is dominated by brand extensions like the Oscar de la Renta Bella family, flankers for Jimmy Choo Urban Hero and the Hollister Wave collection. Recently, it debuted Effect, a full suite of men’s grooming and fragrance products, under the GUESS brand.
Strategic Partnership Holds Key to Growth
Inter Parfums is set to expand its business through new licenses or acquisitions. In July 2021, the company inked a deal with Salvatore Ferragamo S.p.A. The deal grants an exclusive worldwide license to Inter Parfums for the production and distribution of Ferragamo’s branded perfumes.
In July 2020, Inter Parfums’ majorly-owned subsidiary — Interparfums SA — acquired 25% of Divabox’s capital. Divabox is the owner of Origines-parfums, which is a renowned French company in the online beauty market. The deal will enhance Inter Parfums’ fragrance line and product range alongside pushing its digital development, courtesy of Origines-parfums’ solid customer expertise. During last earnings call, management highlighted that it is witnessing solid sales growth in the Origines-parfums business.
Prior to this, Interparfums SA signed an agreement with renowned luxury brand, MonclerSpA in June 2020. The deal gave Inter Parfums rights to fragrance-related items in Monclermono brand stores along with few other specialty shops, department stores and duty-free shops.
We believe that the abovementioned upsides are likely to keep working for Inter Parfums.
Top 3 Picks
Nu Skin Enterprises, Inc. NUS, currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 15.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pilgrim’s Pride Corporation PPC, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of almost 34%, on average.
Hormel Foods Corporation HRL, currently carrying a Zacks Rank #2, has a long-term earnings growth rate of 7.4%.
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