Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the second quarter ended June 30, 2011.
Second Quarter 2011 Compared to Second Quarter 2010:
- Net sales increased 12.3% to $121.1 million from $107.8 million; at comparable foreign currency exchange rates, net sales rose 4.7% for the period;
- European-based operations generated sales of $106.5 million, up 15.9% from $91.9 million;
- Sales by U.S.-based operations were $14.6 million, down 8.2% from $15.9 million;
- Gross margin was 62% compared to 60%;
- S, G & A expense as a percentage of sales was 53.0% compared to 49.4%;
- Operating margins declined to 9.0% of net sales from 10.7% of net sales;
- Net income attributable to Inter Parfums, Inc. decreased 6.8% to $5.0 million as compared to $5.4 million; and,
- Basic and diluted earnings per share declined 11.1% to $0.16 from $0.18.
Through the first half of 2011, net sales were $254.4 million or 12.0% ahead of $227.1 million in the first half of 2010. At comparable foreign currency exchange rates, net sales rose approximately 8.0%. Net income attributable to Inter Parfums, Inc. increased 49% to $17.8 million or $0.58 per basic and diluted share from $11.9 million or $0.39 per basic and diluted share.
Russell Greenberg, Executive Vice President & Chief Financial Officer of Inter Parfums pointed out, “Although second quarter net sales by European-based operations were 16% ahead of last year, they fell short of expectations. As we reported last month, certain shipments scheduled for the second quarter were delayed until the third quarter due to the transfer of inventory and certain other unforeseen transitional issues in connection with the June opening of our new 340,000 square foot distribution center outside of Paris. As a result, we did not achieve the leverage of fixed S, G & A expenses in the current second quarter that we would have otherwise achieved. The comparable quarter increase in sales by European-based operations was in great part due to the commencement of prestige product distribution in the U.S. by our subsidiary, Interparfums Luxury Brands, at the start of 2011, as was the improvement in gross margin, offset somewhat by the negative impact of a weaker U.S. dollar.”