By  on March 11, 2005

NEW YORK — While higher royalty rates related to its Burberry fragrances pressured fourth-quarter earnings results, strong sales helped Inter Parfums Inc. achieve a 13.5 percent earnings gain for the year.

For the three months ended Dec. 31, the New York cosmetics and fragrance manufacturer saw earnings slide 6.1 percent to $3.5 million, or 17 cents a diluted share, compared with earnings of $3.7 million, or 18 cents, in the year-ago period.

Sales for the period vaulted 29.7 percent to $63.8 million from $49.2 million, bolstered by strong sales of the Burberry Brit, Burberry London, Burberry Weekend and Burberry Touch fragrances.

“Burberry Brit for men, which launched last fall, is our best-selling men’s fragrance ever,” said Jean Madar, chairman and chief executive officer, during a conference call with analysts.

During the call, Russell Greenberg, chief financial officer, said prestige products like the Burberry fragrances accounted for 84 percent of total sales. Prestige product sales rose 39 percent during the quarter while sales of mass market products fell 11 percent.

Higher royalty rates for Burberry, which went into effect on July 1, sent selling, general and administrative costs soaring and were responsible for the lower quarterly earnings. SG&A expenses rose to $28.9 million, or 45 percent of sales, compared with SG&A expenses of $17.5 million, or 35.5 percent of sales in the same period a year ago — an increase of 970 basis points.

For the year, earnings increased 13.5 percent to $15.7 million, or 77 cents, from $13.8 million, or 69 cents, in 2003, on sales that surged 27.2 percent to $236 million from $185.6 million.

Management also announced that Marcella Cacci would be joining the company as president of the Burberry Fragrances business next week. Cacci spent five years with Burberry Group, most recently serving as a senior vice president of global licensing.

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