Inter Parfums(US:IPAR)2025-05-05 20:39Financial Performance - Net sales for the three months ended March 31, 2025, increased by 5% to $338.8 million compared to $324.0 million in the same period of 2024[98] - European based product sales rose by 7% to $247.8 million, driven by strong performances from Jimmy Choo (up 36%), Coach (up 11%), and Lacoste (up 30%) compared to the prior year[99] - United States based product sales decreased by 1% to $94.3 million, impacted by the discontinuation of the Dunhill license, which had a 4% negative effect on sales[100] - North America net sales increased by 14% to $123.0 million, while sales in Eastern Europe surged by 46% to $25.6 million compared to the prior year[104] - The company's largest brands accounted for 76% of net sales, with Jimmy Choo, Coach, and Montblanc being the top contributors[87] - Net income attributable to Interparfums, Inc. was $42.5 million for the three months ended March 31, 2025, compared to $41.0 million in the prior year[125] Profitability and Margins - Gross profit margin as a percentage of net sales improved to 63.7% for the three months ended March 31, 2025, compared to 62.5% in the same period of 2024[105] - Operating margins improved to 22.2% for the three months ended March 31, 2025, up from 21.0% in the prior year[117] Expenses - Selling, general and administrative expenses as a percentage of net sales remained relatively flat at 41.6% for the three months ended March 31, 2025, compared to 41.5% in the prior year[111] - Selling, general and administrative expenses for European operations increased by 6.2% to represent 38.7% of net sales for the three months ended March 31, 2025, compared to 39.1% in the prior year[112] - For U.S. operations, selling, general and administrative expenses rose by 2.1% to 47.6% of net sales for the same period, up from 46.0% in the prior year, driven by increased employee-related costs and promotional spending[112] - Promotion and advertising expenses totaled $51.5 million, representing 15.2% of net sales for the three months ended March 31, 2025, compared to $48.3 million and 14.9% in the prior year[113] Cash Flow and Liquidity - Cash and cash equivalents totaled $171.9 million as of March 31, 2025, with no liquidity issues expected[128] - Working capital aggregated $604.6 million as of March 31, 2025, with approximately 78% held by European operations[129] - Cash used in operating activities was $7.4 million for the three months ended March 31, 2025, significantly lower than $52.0 million in the prior year[136] Dividends and Shareholder Returns - The Board of Directors increased the annual dividend to $3.20 per share in February 2025, with the next quarterly dividend of $0.80 per share payable on June 30, 2025[141] Foreign Currency and Risk Management - Approximately 50% of net sales from European operations are denominated in U.S. dollars, while costs are primarily incurred in euros, leading to foreign currency exposure[93] - As of March 31, 2025, the company had foreign currency forward exchange contracts valued at approximately USD $161 million with maturities of less than one year[148] - The company does not engage in trading foreign currency forward exchange contracts or interest rate swaps, focusing instead on risk management through controlled programs[144] - The company aims to minimize the effects of foreign exchange rate movements on receivables and cash flows, with hedging activities aligned with identified exposures[145] - The company monitors interest rates to determine whether to swap fixed interest rates for floating rate debt or vice versa, thereby mitigating interest rate risk[149] Future Plans - The company plans to launch several new products and brand extensions throughout 2025, including Ferragamo's Fiamma and Roberto Cavalli Serpentine[101] Economic Impact - Inflation rates in the United States and foreign countries did not significantly impact the company's operating results for the three months ended March 31, 2025[142]