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Inter Parfums (IPAR) Raises 2021 View Again on Solid Q3 Sales

Inter Parfums (IPAR) reported record sales numbers for the third quarter of 2021, reflecting impressive brand performance. Also, management revises 2021 view upward.

This story originally appeared on Zacks

Inter Parfums, Inc. IPAR raised its 2021 guidance yet again, on record sales numbers for the third quarter of 2021. Prior to this, management had raised its view for the full year when it came out with second-quarter sales numbers.

Third-quarter 2021 sales surged 64% from the year-ago quarter’s levels to $262.7 and increased 37% from third-quarter 2019 figures. Courtesy of better-than-anticipated third quarter sales coupled with the initial modest sales related to Ferragamo fragrance, management projects net sales of $810 million for 2021. Earnings per share for the same period are envisioned to be $2.35. Management had earlier anticipated 2021 net sales to be $750 million, while net income per share was expected to be $1.95.

The company’s guidance is based on the assumption of no major resurgence in coronavirus cases and the current level of the average dollar/euro exchange rate. Considering the year-to-date sales, the company is taking a conservative approach for fourth-quarter sales owing to bottlenecks in the supply chain.

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Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s Take a Closer Look at Q3 Sales

At comparable foreign currency exchange rates, third-quarter 2021 consolidated net sales rallied 72% from 2020’s levels and increased 37% from third-quarter 2019 levels. Europe-based product sales increased 43.5% to $206.1 million, whereas U.S.-based product sales ascended 18.9% to $56.6 million from third-quarter 2019 levels.

Compared with 2019’s level, the company’s largest brands performed better than expected with Montblanc, Jimmy Choo, Coach, GUESS and Lanvin sales coming ahead by 26%, 40%, 98%, 27% and 37%, respectively. The upside can be attributed to impressive growth in the fragrance pillars and brand extensions. In addition, the launch of new scents like I Want Choo for Jimmy Choo and Bella Vita for GUESS contributed to the upside. Sales from the company’s new brand addition Kate Spade and MCM also drove the top line.

Inter Parfums, which shares space with Coty Inc. COTY, is optimistic about the recent addition of Ferragamo fragrances as well as the inclusion of Donna Karan and DKNY fragrances next summer. Inter Parfums is on track to accelerate its sales growth and achieve a net sales target of $1 billion in two to three years. Management is also looking to enhance its portfolio by partnering with new brands, mainly in Italy.  

Management highlighted that it achieved impressive sales in the quarter despite almost no travel retail business and significant supply chain disruptions leading to challenges related to procurement of components, transporting goods as well as cost increases. The company is witnessing these disruptions even in the fourth quarter, while demand for its products continues to be high. Management has been countering the headwinds by placing orders in advance and in bigger quantities since the start of the year. The company anticipates supply chain bottlenecks to start easing in the beginning of the new year.

The Zacks Rank #3 (Hold) company’s shares have increased 2.7% in the past three months against the industry’s decline of 20.9%.

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