Inter Parfums Bolstering Prestige Lineup
NEW YORK — An aggressive new product pipeline for Inter Parfums Inc. in 2006 includes new women’s fragrance launches for Lanvin and Christian Lacroix, and men’s launches for S.T. Dupont, Nickel and Paul Smith. The company also will roll out a fifth Burberry fragrance collection for both men and women.
Later this year, the company also plans to launch Tumulte by Christian Lacroix and Arpege Pour Homme by Lanvin. It will release a limited edition of Burberry Brit Gold for holiday.
The new launches should aid the company in building its concentration of prestige products, which account for 88 percent of its sales. Inter Parfums’ net sales rose 22 percent at the end of the first quarter this year to $71.1 million from $58.4 million, excluding the benefits of currency exchange. The geographic rollout of Burberry Brit for Men and the expansion of the Burberry Brit Red distribution contributed to roughly 40 percent of the sales gain in the quarter.
Net income for the company dropped 7.8 percent to $4.4 million, or 22 cents a diluted share, from $4.8 million, or 23 cents. Selling, general and administrative expenses nearly doubled in the quarter, with royalty expenses up to $7.7 million from $3.4 million in the year prior. The company also spent $11.1 million in promotion and advertising in the first quarter, up from $4.6 million in the year prior.
Inter Parfums maintained its earlier net sales guidance of $280 million for 2005, a 19 percent increase from 2004. Net income is expected to reach $15.8 million, or 77 cents a diluted share.
Although the lion’s share of the company’s business is in prestige products and mass continues to decline, Inter Parfums executives said they have no intention of exiting the soft market.
“Even though the mass business is relatively small, the amount and the number of products that we push through the channel is tremendous, and it does give us quite a bit of economy of scale when it comes to purchasing bottles and things like that,” Russell Greenberg, chief financial officer and executive vice president, said on a conference call with analysts. “There are some savings that pass over to the prestige side of our business. There is absolutely no plan to exit at this point.”
— Amy Choi
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Beiersdorf Brands Up in Qtr.
BERLIN — Beiersdorf’s branded consumer division improved operating earnings by 4.2 percent in the first quarter of 2005, whereas consumer sales were flat for the period ended March 31.
Earnings before interest and taxes rose to 129 million euros, or $171 million. All dollar figures are converted from the euro at average exchange rates. Sales reached 995 million euros, or $1.32 billion, though when adjusted for currency effects, consumer sales rose 0.7 percent for the period, Beiersdorf said. The company also noted that sales levels were influenced by a high level of product launches in the first quarter of 2004, compared with a later schedule of launches in 2005.
Beiersdorf’s consumer division includes the skin care brands Nivea, Eucerin, La Prairie, Juvena, Marlies Moller, Labello, Florena and others, as well as bandages under the Hansaplast, Curad, Curitas and Elastoplast names.
By region, sales in Europe fell 0.4 percent to 746 million euros when adjusted for currency effects, or $988.7 million. Sales in Germany fell 3.3 percent. Sales in the Americas fell 3.6 percent, but grew 5 percent in Africa, Asia and Australia. Beiersdorf’s prestige Juvena/La Prairie Group had double-digit sales gains.
“Even in a saturated market like Germany, new products will generate growth for Beiersdorf,” said Rolf Kunisch, the firm’s chief executive, who is retiring this week and being succeeded by Thomas-Bernd Quaas. “New launches are targeted from the second quarter on, including Nivea Sun with new sun protection factor, Nivea Beaute with a new volume mascara, Nivea Vital with soja proteins, 8 x 4 with Fresh Energy and Eucerin with Anti-Redness.”
Beiersdorf lowered its forecast for the year and is projecting consumer sales to “grow slightly stronger than in 2004,” with improved EBIT margins.
Group sales, which include the Tesa adhesives division, were expected to be “clearly ahead” of last year, but are now projected to reach last year’s levels, with an EBIT margin of about 11 percent and return on sales after tax of 7 percent.
— Melissa Drier