Inter Parfums(US:IPAR)2024-08-06 20:59Financial Performance - Net sales for the three months ended June 30, 2024, increased by 10.7% to $342.2 million compared to $309.3 million for the same period in 2023[62]. - European based product sales for the six months ended June 30, 2024, were $457.0 million, up 6.8% from $428.1 million in 2023[62]. - United States based product sales for the three months ended June 30, 2024, grew by 7.9% to $120.2 million from $111.5 million in 2023[62]. - Net sales for European based operations reached $226.0 million for the three months ended June 30, 2024, up from $197.8 million in the same period of 2023, representing a growth of 14.3%[67]. - Net income attributable to Inter Parfums, Inc. was $36.8 million for the three months ended June 30, 2024, compared to $35.0 million for the same period in the prior year, representing a 5% increase[80]. - Net income attributable to European based operations increased to $33.2 million for the three months ended June 30, 2024, up from $27.0 million in the prior year, reflecting a 23% growth[81]. Brand Performance - The introduction of the Lacoste brand contributed $39.5 million in sales during the first half of 2024[63]. - The company's largest brands by sales percentage for the six months ended June 30, 2024, included Montblanc at 17%, Jimmy Choo at 16%, and Coach at 14%[53]. - North America sales rose 5% in the first half of 2024, while Western Europe and Asia/Pacific saw increases of 11% and 6%, respectively[66]. Expenses and Margins - Gross profit margin for European based operations was 68.8% for the three months ended June 30, 2024, compared to 63.0% for the same period in 2023, an increase of 5.8 percentage points[68]. - Selling, general and administrative expenses for European based operations increased by 21.2% to $108.1 million for the three months ended June 30, 2024, compared to $89.2 million in the prior year[71]. - The company's overall operating margins were 18.9% for the three months ended June 30, 2024, compared to 17.8% for the same period in 2023[74]. - Promotion and advertising expenses totaled $66.4 million for the three months ended June 30, 2024, representing 19.4% of net sales, up from 17.7% in the prior year[72]. - Royalty expenses for the three months ended June 30, 2024, were $27.0 million, representing 7.9% of net sales, compared to 7.8% in the same period of 2023[73]. - The company's gross profit margin as a percentage of net sales was 64.5% for the three months ended June 30, 2024, compared to 60.9% for the same period in 2023[67]. - Net profit margins for Inter Parfums, Inc. were 11.7% as of June 30, 2024, down from 14.3% in the prior year, impacted by inflation and increased costs[82]. Cash Flow and Liquidity - Cash and cash equivalents totaled $77 million as of June 30, 2024, with working capital aggregating $525 million, indicating a strong liquidity position[83]. - Cash used in operating activities was $26.5 million for the six months ended June 30, 2024, compared to cash provided of $6.8 million in the same period of 2023[88]. - Inventory levels increased by 19% from year-end 2023, supporting overall sales growth and new brand launches[88]. Tax and Interest - The effective tax rate for United States based operations was 19.9% for the six months ended June 30, 2024, compared to 17.4% for the same period in 2023[79]. - Interest expense related to financing brand and licensing acquisitions totaled approximately $137.2 million as of June 30, 2024[76]. Foreign Currency and Risk Management - The company's business is significantly influenced by foreign currency exchange rates, with over 50% of European based operations' net sales denominated in U.S. dollars[58]. - As of June 30, 2024, the company had foreign currency contracts totaling approximately $48 million and £11 million, aimed at managing foreign exchange risks[96]. Future Plans - The company plans to launch several brand extensions and new products throughout 2024, including DKNY 24/7 and a new flanker for Roberto Cavalli Signature[66]. - The company has entered into a global licensing agreement for the Roberto Cavalli brand, effective July 2023, with product shipments beginning in February 2024[86]. - The company plans to renew the Van Cleef & Arpels license agreement for an additional 9-year term starting January 1, 2025[86]. Dividends - The annual dividend was increased to $3.00 per share in February 2024, with the next quarterly dividend of $0.75 per share payable on September 30, 2024[90].