Fragrance player Inter Parfums saw fourth quarter sales exhibit a double-digit decrease in the company’s key European market, leading to an overall drop for the period; although full year saw record results.
Europe is the largest global fragrance and perfume market and accounts for the majority of Inter Parfums’ sales, but the continuing financial difficulty in the market has taken its toll.
For the quarter, European-based operations generated sales of $152.4 million (117.2 million euros), down 10.1 per cent from the year before, with overall net sales decreasing 6.4 per cent to $176.9 million.
This was slightly offset by sales by U.S.-based operations, which were $24.5 million, up 25.9 per cent from $19.5 million.
Russell Greenberg, executive vice president and CFO points out that over the course of 2012, the strength of the U.S. dollar had a material impact on sales and gross margin as the average dollar/euro exchange rate for the three and twelve months ended December 31, 2012 was 1.30 and 1.28, respectively, compared to 1.35 and 1.39 for the corresponding 2011 periods.
Year results can’t be brought down
The slight dip in the fourth quarter was not enough to tarnish a positive year for Inter Parfums. Net sales for 2012 were a record $654.1 million, an increase of 6.3 per cent.
Reported results also included a $198.8 million gain related to the termination of the Burberry license.
Jean Madar, chairman and CEO of Inter Parfums, commented, “The past year was highly eventful and productive for our Company. In addition to achieving record sales and earnings in the absence of new major product launches, we added two new license agreements with iconic luxury fashion houses, Karl Lagerfeld and Alfred Dunhill.”
“The addition of these brands is representative of our growth strategy as we move into the next phase of our Company’s evolution.”
Madar explained that 2012 sales benefitted from strong performances by several prestige brands, as Montblanc, Jimmy Choo and Boucheron all saw continued growth.
“Looking ahead, we are extremely enthusiastic about our prospects for growth coming from our core brands, recent additions and hopefully new ones that may be added. In 2013 we have a full slate of product launches underway or planned,” he continued.