Inter Parfums bottles up record US$324M Q1 riding high on Coach momentum amid flattened European sales

25 Apr 2024 --- Inter Parfums saw net sales rise to a record US$324 million in the first quarter, up 4% from US$312 million in the first quarter of 2023, driven by “ongoing momentum” in the global fragrance market and “favorable” initial shipments of Lacoste and Cavalli fragrances.

The producer of prestige brands Ferragamo, Karl Lagerfeld and Montblanc says the growth was expected, considering the 24% sales growth achieved in the same quarter of 2023.

“Of our three largest brands, Coach fragrance sales rose 5% in the quarter, building upon the 24% increase in the prior year period,” comments Jean Madar, chairman and CEO of Inter Parfums.

“As expected, Jimmy Choo and Montblanc saw declines in fragrance sales, following their impressive 63% and 28% growth rates during the same period last year, respectively.”

Flat European sales
Inter Parfums manages its European operations through its 72%-owned subsidiary, Interparfums, and its US-based operations through wholly owned subsidiaries in the US and Italy.

Despite “strong demand” for Inter Parfums’ key brand lines and “favorable” initial shipments of Lacoste fragrances, the company’s European-based operations net sales were flat compared to an “exceptional” sales performance recorded in the same period of 2023. 

“Performance in Eastern Europe was adversely impacted by a very unfavorable comparison base, reflecting the particularly strong business recovery during the first quarter of 2023 (+66%), as well as sourcing constraints in certain countries, which resulted in sales shifting from the first quarter into the second quarter of 2024,” Madar reveals.

US sales soar 18%
For Inter Parfums’ US-based operations, Inter Parfums’ 18% sales growth in the first quarter was primarily driven by Donna Karan/DKNY and Guess, with “comparable” quarter sales growing 44% and 21%, respectively. 

“The successful launch of Roberto Cavalli, in combination with the start of distribution of European based brands by our Italian subsidiary, contributed 9% growth,” highlights Mader.

“Donna Karan’s new four-scent Cashmere Collection performed exceedingly well and was strategically timed to coincide with the brand’s new luxury fashion campaign.”

Furthermore, Guess fragrances continued a “strong” sales performance attributed to a combination of “legacy scents” within its portfolio and the debut of Guess Iconic.

Inter Parfums 18% sales growth in the first quarter was primarily driven by Donna Karan/DNKY and Guess (Image credit: Guess).Optimizing timed fragrance launches
Madar shares the company is now focusing on “optimizing the timing” of its launches throughout 2024, aiming for a more “balanced distribution” compared to the heavy concentration of new fragrance launches in the first quarter of last year.

“While the global fragrance market is not growing as fast as in 2023, it remains healthy. The concentration of launches during the prior year period created a more challenging comparison for the first quarter of 2024, but we anticipate significant growth for the balance of the year with our strong pipeline of innovation across all key brands in our portfolio.”

Among highlighted launch activity, Inter Parfums recently initiated “Phase 2” of Abercrombie & Fitch Fierce fragrance distribution in Europe, Mexico and Australia during this first quarter, following a “successful” “Phase 1” distribution roll-out.

“While Montblanc continues to capitalize on its ongoing momentum through the Explorer line and the launch of Montblanc Legend Blue in this quarter, the high base in 2023 led to a 5% decline,” notes Mader.

Jimmy Choo declined by 23%, largely due to the I Want Choo Forever launch at the end of 2022 and the Rose Passion launch in the first quarter of 2023. A new extension of I Want Choo is planned for the second quarter of 2024, Mader highlights.

“We are confident in our dynamic market positioning and remain optimistic about our ability to continue to gain market share within this growing market. As such, we are reaffirming our 2024 net sales guidance of US$1.45 billion,” she concludes.

Fragrances helped boost the bottom line of several companies this past fiscal year, especially during the last holiday season. Still, businesses like Inter Parfums caution against global impacts, including sluggish sales from China and rising costs.

By Benjamin Ferrer