With regard to U.S.-based operations, Mr. Madar noted, “The 71% increase in sales was due to several factors, including new product launches such as Love Fury by Nine West, Wildbloom Vert for Banana Republic and Gap Established 1969. The inclusion of Anna Sui fragrance sales effective January 1 st was also an important contributor as were further gains by our U.S. specialty retail and designer fragrance brands in overseas markets. We have an ambitious new product line up in the works, which includes Wishes & Dreams for bebe, Miss Madison for Brooks Brothers, Wildbloom Blue for Banana Republic, and two flankers: Too Too Pretty for Betsey Johnson and Fairy Dance Secret Wish for Anna Sui.”Russell Greenberg, Executive Vice President & Chief Financial Officer, pointed out several items pertinent to the first quarter, “Now that more than a year has passed since taking over prestige product distribution in the U.S. by Interparfums Luxury Brands, Inc., gross margins for reporting periods in 2012 should be more comparable. In the current first quarter, gains in gross margin from currency fluctuations were offset by changes in product mix. While we significantly increased our overall advertising budget for all brands to maintain the positive sales momentum and continue to grow our market share, S, G & A expense as a percent of net sales was comparable to last year’s first quarter.” Also of note, the current first quarter:
- benefited from $248,000 of foreign currency gains compared to $419,000 of foreign currency losses in the first quarter of 2011, and
- was subject to an income tax rate of 36% compared to 33% for the prior year’s first quarter.