Inter Parfums (IPAR) Gains on Solid Brands & Partnerships
Inter Parfums, Inc. IPAR is on track to expand its business through new licenses or acquisitions. The provider of fragrances and related products’ focus on product launches is driving growth. The company is benefiting from strength in its brand portfolio, which continued in the fourth quarter of 2022.
The Zacks Rank #1 (Strong Buy) company’s shares have rallied 25.6% in the past three months against the industry’s 2.4% decline. Let’s delve deeper.
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Brand Performance & View
Inter Parfums has been benefiting from strength in its brand performance. In the fourth quarter of 2022, IPAR witnessed solid sales increases from its largest brands, including Montblanc, Jimmy Choo, Coach and GUESS?, which delivered growth of 50%, 78%, 82% and 28%, respectively. In the company’s U.S. operations, brands like Oscar de la Renta and Abercrombie & Fitch delivered sales growth of 28% and 16%, respectively, in the fourth quarter. In European operations, Moncler, Kate Spade and Boucheron brands witnessed solid increases of 34%, 140% and 25%, respectively.
Inter Parfums began 2023 on a solid note, with sizable orders booked in the first two months. Management recently raised its 2023 guidance. For 2023, it now expects net sales of nearly $1.2 billion, up 10% year over year. The company earlier expected net sales of $1.15 billion in 2023. Management expects 2023 earnings per share (EPS) of $4.00, up 6%. Earlier, the company had expected earnings of $3.75 per share.
Focus on Strategic Partnerships
Inter Parfums is on track to expand its business through new licenses or acquisitions. In December 2022, its majority-owned Paris-based subsidiary, Interparfums SA, signed a license agreement with Lacoste — a well-known fashion sports brand. Both parties have entered a worldwide exclusive 15-year fragrance license agreement, effective Jan 1, 2024. The company is optimistic about the partnership with well-established fragrance brands like Donna Karan and DKNY.
In December 2021, Inter Parfums, through its subsidiary Interparfums Italia signed a 10-year exclusive global licensing agreement with Emanuel Ungaro. In October 2021, Inter Parfums finalized the deal with Salvatore Ferragamo S.p.A. Per the agreement, Inter Parfums holds the exclusive worldwide license for the production and distribution of Salvatore Ferragamo brand perfumes.
Product Launches Fuel Growth
Inter Parfums expects to unveil new products and brand extensions throughout 2023. The company’s largest European-based brand, Montblanc, will release a sister scent for the signature line and one for men in the Explorer franchise. The company will introduce Rose Passion, a new flanker for Jimmy Choo. Its Coach brand will add scents for men and women. Inter Parfums’ mid-sized brands will roll out new scents, like a collection for Moncler and Chérie by Kate Spade. It will also add fragrance to Rochas and Van Cleef & Arpels family.
For the U.S.-based operations, every brand in the portfolio is introducing companion products for existing programs. Management has a new version of GUESS Uomo and Bella Vita in the pipeline. The company is on track with launches for Abercrombie & Fitch. The company will launch its first men’s scent for the MCM brand.
Solid Staple Picks
Some top-ranked consumer staple stocks are e.l.f. Beauty ELF, Post Holdings POST and General Mills GIS.
e.l.f. Beauty, operating as a cosmetic and skin care products provider, currently sports a Zacks Rank of 1. ELF has a trailing four-quarter earnings surprise of almost 105%, on average.
The Zacks Consensus Estimate for e.l.f. Beauty’s current financial year’s sales and earnings suggests growth of 39.1% and 69.1%, respectively, from the prior-year reported numbers.
Post Holdings, operating as a consumer-packaged goods company, currently sports a Zacks Rank #1. POST has a trailing four-quarter earnings surprise of 34.8%, on average.
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year EPS suggests an increase of 119.6% from the year-ago reported number.
General Mills, a branded consumer foods company, currently carries a Zacks Rank #2 (Buy). GIS has a trailing four-quarter earnings surprise of 8.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for General Mills’ current fiscal-year sales and earnings suggests growth of 5.9% and 7.1%, respectively, from the corresponding year-ago reported figures.
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