Inter Parfums has released its Q3 results ending September 30, 2020, which show net sales at $160.6 million, down 16% from $191.2 million in the same period 2019; at comparable foreign currency exchange rates, net sales declined 18.3% year-over-year.
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For the third quarter, net sales by European operations declined 9.6% year-over-year to $129.7 million. Sales for the U.S.-based operations fell 35.1% year-over-year to $30.9 million.
Net income was $23.5 million, down 54.9% from the same period last year, while net income attributable to Inter Parfums, Inc. per diluted share declined 54.9% to $0.74 from $1.64 for Q3.
Net income attributable to Inter Parfums, Inc. declined 20.7% to $16.5 million from $20.8 million for the third quarter; and net income attributable to Inter Parfums, Inc. per diluted share declined 21.2% to $0.52 from $0.66.
Operating income declined 14.4% to $31.4 million while operating margin was 19.5% compared to 19.2% in 2019 Q3.
Inter Parfum closed the third quarter with working capital of $422.1 million, including approximately $204 million in cash, cash equivalents and short-term investments, a working capital ratio of 4.5 to 1 and only $19.4 million of long-term debt.
Through the first nine months of 2020, net sales declined 33.7% to $355 million, compared to $535.7 million in the same period of the prior year. At comparable foreign currency exchange rates, net sales declined 34.1%.
It also added two new luxury brands to its portfolio this year: MCM and Moncler, and made an equity investment in Divabox. It also introduced a limited number of new products and brand extensions in 2020, including Coach Dreams, L’Homme Rochas, Oscar de la Renta’s Bella Essence, and Abercrombie & Fitch Authentic Night.
Related: Inter Parfums 2020 Net Sales Approx. $442 Million
Jean Madar, chairman and CEO of Inter Parfums, Inc. said, “... North America, Western Europe and Asia, achieved significant gains. As a result, when compared to the second quarter, third quarter net sales increased 224%; gross margin rose 630 basis points; our operating margin returned to a more normalized level of 19.5%; and once again, our bottom line was solidly profitable. Our 2021 new product launch schedule is far more prolific and ambitious, as are our advertising and promotional campaign plans.”
Russell Greenberg, executive vice president and CFO of Inter Parfums, Inc., said, “For European operations, the third quarter gross profit margin was 62.4% as compared to 62.8% in last year’s third quarter with the weakened dollar responsible for the modest decline. For the current nine month period, gross margin was 62.3%. In the same period last year, gross margin for European operations was 64.7%. For U.S. operations, third quarter gross profit margin was 52.5%, up from 51.0% reported for the prior year’s third quarter with the modest improvement attributable to product mix.”
Greenberg continued, “Stepping on the brakes had the desired result in the third quarter as S, G & A expenses were reduced by 15.4% as compared to last year’s third quarter, and represented 41.0% of net sales, just slightly more than 40.7% in the third quarter of 2019.”
Greenberg concluded, “As we reported last month, we raised our 2020 net sales guidance to between $495 million and $500 million resulting in net income attributable to Inter Parfums, Inc. per diluted share in the range of $0.80 and $0.84. Guidance assumes that the average dollar/euro exchange rate remains at current levels. In addition, we will issue our initial 2021 guidance after the market closes on Tuesday, December 1, 2020.”
