Shares of Inter Parfums (IPAR 35.60, +1.10 +3.2%) post a decent advance today in light of the strong performance in Q4, as the stock grabs nearly three-year highs post results.
IPAR, a global fragrance brand, does business mainly out of New York in the United States and is partners with such brands as Abercrombie & Fitch (ANF), Montblanc, Agent Provocateur, bebe (BEBE), Coach (COH), Hollister and Jimmy Choo (JYMHF).
For Q4, IPAR impressed with both earnings per share (EPS) and revenues ahead of market expectations at $0.13 and $134.8 million, respectively. The results included two nonrecurring items; first, IPAR benefitted from an agreement with Balmain whereby Balmain bought out the company’s license for about $5.7 million, and the company recognized a gain of $4.7 million in Q4. Secondly, the company exercised early termination of the underperforming Karl Lagerfeld brand to 2024 rather than the original 2032, recording an impairment loss of $5.7 million as of December 31, 2016. Additionally, gross margins were 63.7% compared to 64.0% a year ago.
Sales by European based operations were up 12.8% to $99.9 million from $88.6 million; at comparable foreign currency exchange rates, net sales gained about 14.6%. U.S. based operations generated net sales of $34.9 million, up 17.3% from $29.7 million.
In Europe, management highlighted strength in the Montblanc partnership and year-over-year sales in the brand grew 25% following the launch of the Legend Spirit line. The company’s top line also benefited from better than expected results from the first ever Coach women’s fragrance, which put up $23 million in sales in 2016.
In the United States, results were impacted by the international launch of First Instinct, the company’s men’s fragrance at ANF, and Wave, the fragrance duo for Hollister.
Looking ahead, IPAR sees FY17 EPS in the range of $1.20-1.24 on revenues between $550-560 million.