Inter Parfums results take hit following loss of Burberry, but underlying sales growth is strong

International fragrance player Inter Parfums has reported a significant drop in its sales, although this was expected as it is the first quarter that Burberry sales were not included in the results, and sales of other fragrances show strong growth.

The company said that group sales fell by 19.3 percent, from $145.6m in the corresponding period last year to $117.5m, which was largely on account of lost Burberry sales in the European market.

This figure included discontinued Burberry brand sales of $20.6m, and represented existing sales inventory and some authorized sell-offs of branded finished goods.

Underlying business trend looks positive

Excluding the Burberry sales, the underlying business trends looks healthier and reflects a number of new brand licensing agreement, including a contract signed last year to manage Alfred Dunhill fragrance and cosmetics.

Excluding Burberry sales, revenues for the quarter rose by 17 percent to reach $82.7m compared to the second quarter last year, reflecting strong revenue growth in both the US and European markets.

Although the company is based in New York its mainstay is Europe, where sales of the English Burberry brand are popular, and the loss of the license to produce Burberry fragrances meant sales in that market fell by 26.2 percent to $92.7m, but were up by 15 percent to $72.0m excluding the Burberry sales.

CEO Jean Madar noted that the European performance was driven by the Jimmy Choo license, which posted a 40 percent increase in sales for the period, whereas Montblanc sales rose by 20 percent.

US sales boosted by Alfred Dunhill and Anna Sui

In the smaller US market, gains from the take-over of the Alfred Dunhill license and the expanded distribution of Anna Sui fragrances meant sales for the period were up 24.4 percent, to $24.8m.

For the first six months of the year, group sales were up by 6.6 percent to $331.3m, a figure that represented an extended licensing agreement for Burberry sales specifically for the first quarter.

Looking ahead to the full year, the company said it was raising its expectations for net sales from $510m to $525m. Profitability for the first six months of the year has exceeded expectations and will be reinvested into a higher spend on promotions and advertising in the second half of the year.