8-K
INTERPARFUMS INC (IPAR)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 7, 2024
InterParfums, Inc.**
(Exact name of Registrant as specified in its charter)
| Delaware | 0-16469 | 13-3275609 |
|---|---|---|
| (State or other jurisdiction<br> of<br><br> incorporation or organization) | Commission<br><br> File Number | (I.R.S. Employer<br><br> Identification No.) |
551Fifth Avenue, NewYork
, NY
10176
(Address of Principal Executive Offices)
212
.983.2640
(Registrant’s Telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below):
| ☐ | Written communications<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting Material pursuant<br> to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications<br> pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications<br> pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange <br><br> on which registered |
|---|---|---|
| Common<br> Stock, $.001 par value per share | IPAR | The<br> Nasdaq Stock Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item2.02. Results of Operations and Financial Conditions
Certain portions of our press release dated May 7, 2024, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference herein, and are filed pursuant to this Item 2.02. They are as follows**:**
| • | The<br> 1st, through, 7th, and the 10th, 13th, and 15th full paragraphs relating to results of operations<br> for the first quarter of 2024 |
|---|---|
| • | Portions<br> of the 8^th^, 12^th^ and 14^th^ relating to results of operations<br> for the first quarter of 2024 |
| --- | --- |
| • | The<br> 19^th^ through 21^st^ paragraphs relating to the Conference call to be<br> held on May 8, 2024 |
| --- | --- |
| • | The<br> consolidated statements of income and consolidated balance sheets |
| --- | --- |
Item7.01. Regulation FD Disclosure.
Certain portions of our press release dated May 7, 2024, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference herein and are filed pursuant to this Item 7.01 and Regulation FD.
| • | Portions<br> of the 8^th^ paragraph relating to certain 2024 product launches for the remainder<br> of the year |
|---|---|
| • | The<br> 9^th^ paragraph relating to portfolio new products launches and growth for 2024 |
| --- | --- |
| • | The<br> 11^th^ paragraph relating to the favorable fragrance market for our products |
| --- | --- |
| • | Portions<br> of the 12^th^ paragraph relating to product price increases for the second half<br> of 2024 |
| --- | --- |
| • | Portions<br> of the 14^th^ paragraph relating to advertising and promotion spending for the remainder<br> of the year |
| --- | --- |
| • | The<br> 16^th^ and 17^th^ paragraphs relating to 2024 guidance |
| --- | --- |
| • | The<br> 24^th^ paragraph relating to forward-looking information |
| --- | --- |
| • | The<br> balance of such press release not otherwise incorporated by reference in Item 2.02. |
| --- | --- |
Item8.01. Other Events
| • | The<br> 18^th^ paragraph relating to dividends |
|---|
Item9.01 Financial Statements and Exhibits.
| 99.1 | Our press release dated May 7, 2024 |
|---|
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused and authorized this report to be signed on its behalf by the undersigned.
Dated: May 7, 2024
| Inter Parfums, Inc. | |
|---|---|
| By: | /s/<br> Michel Atwood |
| Michel Atwood | |
| Chief Financial Officer |
Exhibit 99.1
FORIMMEDIATE RELEASE
INTERPARFUMS, INC. REPORTS 2024 FIRST QUARTER RESULTS
Resultsin-line with Expectations; Reaffirms 2024 Sales and Earnings Guidance
New York, New York, May 7, 2024, Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the first quarter ended March 31, 2024.
| FirstQuarter 2024 Highlights:<br><br> <br>($ in millions, except per share amounts) | Three Months Ended<br><br> <br><br><br> <br>March 31, | ||
|---|---|---|---|
| 2024 | 2023 | % Change | |
| Net<br> Sales | $324 | $312 | 4% |
| Gross<br> Margin | 62.5% | 65.1% | (260<br> bps) |
| Operating<br> Income | $68 | $90 | (25%) |
| Operating<br> Margin | 21.0% | 29.0% | (800<br> bps) |
| Net<br> Income attributable to IP | $41 | $54 | (24%) |
| Diluted<br> EPS | $1.27 | $1.68 | (24%) |
OperationalCommentary
Jean Madar, Chairman & Chief Executive Officer of Inter Parfums noted, “As expected, following the exceptional sales performance in the first quarter of last year, driven by the introduction of numerous new products, sales growth moderated during the current first quarter. That said, our distribution partners, as well as NPD Research data, have indicated that sell-out at the store level has been leading to inventory destocking. The fragrance market remains buoyant, and our key brands continue to enjoy strong sell-out and favorable reception from both retailers and consumers.
“We delivered a healthy operating margin of 21% for the quarter, in-line with our expectations. The 29% operating margin in the 2023 first quarter was exceptionally high due to a large pipeline of new product launches combined with low advertising and promotional expenses. This largely explains the 25% decline in operating income and the 24% decline in earnings per diluted share as compared to prior year quarter.
“North America, our largest market, remains robust despite a 3% decline in comparable quarter sales, due primarily to the concentration of launches in early 2023. Western Europe grew sales by 10%, while Eastern Europe, which declined 22%, was adversely impacted by delays in shipments in certain countries, which resulted in sales shifting from the first quarter into the second quarter.
“Asia/Pacific grew sales by 13%, led by Australia and India. Our sales in Central and South America continued to build with first quarter growth of 31%. The 5% sales decline in the Middle East and Africa factors in the economic and social repercussions of the numerous conflicts in those regions and phased product launches.”
He continued, “During the first quarter of 2024, we launched several new fragrances, including extensions within established lines for Oscar de la Renta and Anna Sui. Also debuting in the first quarter were Montblanc Legend Blue, Donna Karan CashmereCollection, Van Cleef & Arpels Encens Précieux, Karl Lagerfeld Rouge, Rochas Orange Horizon, Kate Spade Bloom, and Lacoste L12.12 Blanc and L12.12 Rose. Our first time sales of established Lacoste and Roberto Cavalli fragrances reinforce our confidence in these two new fragrance brands.
“GUESS, our fourth largest brand, achieved the greatest sales gain among our top brands at 21% for the quarter. With a very strong innovation calendar for the remainder of the year, all indicators for the brand are green and point to another exceptional year.
“Once again, we have an ambitious innovation strategy planned for the balance of 2024, including blockbuster fragrances for DKNY and Lacoste, and extensions for the Jimmy Choo I Want Choo line and Roberto Cavalli Signature line*.* Multi-scent collections for GUESS are coming to market this spring, followed in the fall by a new member of the GUESS Uomo men’s fragrance family. Furthermore, extensions for Hollister’s Feelin’ Free and Ferragamo’s Signorina will be unveiled later in the year. We are confident in our future launches, and believe we are well positioned to achieve another year of substantial growth, particularly in the second half of 2024.
“We increased advertising and promotional investments in the first quarter to fuel business growth throughout the year and to compensate for lighter new product launches than in the prior year. Our decision to spend significantly more during the fourth quarter of 2023, combined with higher spending this quarter, is proving to be a winning strategy as it enables us to drive sell-out ahead of sell-in. Additionally, we are continuing to develop compelling content and implement omnichannel concepts with renown fragrance enthusiasts to further expand our reach and exposure in meaningful ways.”
Mr. Madar concluded, “The fragrance market is resilient, and we are determined to continue to gain market share by implementing our strategies effectively. We believe the favorable market conditions and prevailing tailwinds will far outweigh any challenges we may encounter.”
FinancialCommentary
Discussing the first quarter Michel Atwood, Chief Financial Officer of Inter Parfums pointed out, “Consolidated gross margin was 62.5% completed 65.1% in last year’s first quarter, with the decline attributable to our European based operations, whose gross margin declined to 64.0% from last year’s 67.8% due to unfavorable segment, geographic and channel mix, increased trade spending to support the business in the absence of significant new innovation, and cost inflation impacts on raw materials purchased in Europe due to higher energy costs. We expect that many of these adverse impacts will be non-recurring and offset in the balance of the year as we also consider price increases in the second half of the year.
“Gross margin for U.S. based operations was 58.7%, up from 57.6% thanks to a more favorable brand and channel mix, as a higher portion of our sales are being sold directly to retailers as opposed to third-party distributors.”
He continued, “SG&A rose to 41.5% from 36.1% in the prior year period, largely driven by our investments in advertising and promotion across both our European and U.S. based operations and the amortization of the cost of the Lacoste license amounting to $1.6 million during the first quarter of 2024. Advertising and promotion, included in SG&A, represented 14.9% and 11.3% of net sales in the 2024 and 2023 periods, respectively, as we increased our investments to support the initial launch of our new brands, Lacoste and Roberto Cavalli, and better balance our investment profile throughout the year. We continue to anticipate that on a full year basis, advertising and promotional expenditures will aggregate approximately 21% of net sales.
“Our financial position remains strong. We closed the quarter with $97 million in cash, cash equivalents and short-term investments, and working capital of $530 million, resulting in a working capital ratio of 2.8 to 1.”
Reaffirms2024 Guidance
Mr. Atwood concluded, “We are confident in our ability to execute our plans through the balance of the year, so we are once again reiterating our 2024 guidance, which calls for net sales of $1.45 billion, resulting in earnings per diluted share of $5.15. This represents a 10% increase in net sales and an 8% increase in earnings per diluted share. As we previously reported and included in our guidance, the Lacoste non-cash amortization expense of the acquisition cost is expected to reduce our 2024 earnings per diluted share by approximately $0.11.”
Guidanceassumes that the average dollar/euro exchange rate remains at current levels.
Dividend
The Company’s regular quarterly cash dividend of $0.75 per share will be paid on June 28, 2024 to shareholders of record on June 14, 2024.
ConferenceCall
Management will host a conference call to discuss financial results and business operations beginning at 11:00 am ET on Wednesday, May 8, 2024.
Interested parties may participate in the live call by dialing (877) 423-9820 (toll-free) or (201) 493-6749 (international). Participants are asked to dial-in approximately 10 minutes before the conference call is scheduled to begin.
A live audio webcast will also be available in the “Events” tab within the Investor Relations section of the Company’s website at www.interparfumsinc.com, or by clicking here. The conference call will be available for webcast replay for approximately 90 days following the live event.
AboutInter Parfums, Inc.
Operating in the global fragrance business since 1982, Inter Parfums, Inc. produces and distributes a wide array of prestige fragrance and fragrance-related products under license agreements with brand owners. The Company manages its business in two operating segments, European based operations, through its 72% owned subsidiary, Interparfums SA, and United States based operations, through wholly owned subsidiaries in the United States and Italy.
The portfolio of prestige brands includes Abercrombie & Fitch, Anna Sui, Boucheron, Coach, Donna Karan/DKNY, Emanuel Ungaro, Ferragamo, Graff, GUESS, Hollister, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste, MCM, Moncler, Montblanc, Oscar de la Renta, Roberto Cavalli, and Van Cleef & Arpels, whose products are distributed in over 120 countries around the world through an extensive and diverse network of distributors. Inter Parfums, Inc. is also the registered owner of several trademarks including Lanvin and Rochas.
Forward-LookingStatements
Statements in this release which are not historical in nature are forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. In some cases, you can identify forward-looking statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would," or similar words. You should not rely on forward-looking statements, because actual events or results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors. These factors include, but are not limited to, the risks and uncertainties discussed under the headings “Forward Looking Statements” and "Risk Factors" in Inter Parfums' annual report on Form 10-K for the fiscal year ended December 31, 2023 and the reports Inter Parfums files from time to time with the Securities and Exchange Commission. Inter Parfums does not intend to and undertakes no duty to update the information contained in this press release.
ContactInformation:
| Inter Parfums, Inc. | or | The Equity Group Inc. |
|---|---|---|
| Michel Atwood | Karin Daly | |
| --- | --- | |
| Chief Financial Officer | Investor Relations Counsel | |
| --- | --- | |
| (212) 983-2640 | (212) 836-9623 / kdaly@equityny.com | |
| --- | --- | |
| www.interparfumsinc.com | www.theequitygroup.com | |
| --- | --- |
See Accompanying Tables
CONSOLIDATEDBALANCE SHEETS
(In thousands except share and per share data)
(Unaudited)
| ASSETS | |||||
|---|---|---|---|---|---|
| December 31,<br> 2023 | |||||
| Current assets: | |||||
| Cash and cash equivalents | 20,976 | $ | 88,462 | ||
| Short-term investments | 76,078 | 94,304 | |||
| Accounts receivable, net | 293,075 | 247,240 | |||
| Inventories | 400,209 | 371,859 | |||
| Receivables, other | 5,581 | 7,012 | |||
| Other current assets | 34,258 | 29,458 | |||
| Income taxes receivable | 2,490 | 691 | |||
| Total current assets | 832,667 | 839,026 | |||
| Property, equipment and leasehold improvements, net | 164,165 | 169,222 | |||
| Right-of-use assets, net | 26,980 | 28,613 | |||
| Trademarks, licenses and other intangible assets, net | 288,117 | 296,356 | |||
| Deferred tax assets | 15,726 | 14,545 | |||
| Other assets | 21,521 | 21,567 | |||
| Total assets | 1,349,176 | $ | 1,369,329 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Loans payable - banks | 8,324 | $ | 4,420 | ||
| Current portion of long-term debt | 29,027 | 29,587 | |||
| Current portion of lease liabilities | 5,928 | 5,951 | |||
| Accounts payable – trade | 106,219 | 97,409 | |||
| Accrued expenses | 135,660 | 178,880 | |||
| Income taxes payable | 17,300 | 8,498 | |||
| Total current liabilities | 302,458 | 324,745 | |||
| Long–term debt, less current portion | 115,926 | 127,897 | |||
| Lease liabilities, less current portion | 22,905 | 24,517 | |||
| Equity: | |||||
| Inter Parfums, Inc. shareholders’ equity: | |||||
| Preferred stock, .001 par; authorized 1,000,000 shares; none issued | — | — | |||
| Common stock, .001 par; authorized 100,000,000 shares; outstanding 32,023,640 and 32,004,660 shares at March 31, 2024 and December 31, 2023, respectively | 32 | 32 | |||
| Additional paid-in capital | 100,309 | 98,565 | |||
| Retained earnings | 711,043 | 693,848 | |||
| Accumulated other comprehensive loss | (50,417 | ) | (40,188 | ) | |
| Treasury stock, at cost, 9,981,665 and 9,981,665 shares at March 31, 2024 and December 31, 2023, respectively | (52,864 | ) | (52,864 | ) | |
| Total Inter Parfums, Inc. shareholders’ equity | 708,103 | 699,393 | |||
| Noncontrolling interest | 199,784 | 192,777 | |||
| Total equity | 907,887 | 892,170 | |||
| Total liabilities and equity | 1,349,176 | $ | 1,369,329 |
All values are in US Dollars.
CONSOLIDATEDSTATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
| Three Months Ended<br> March 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| Net sales | $ | 323,963 | $ | 311,723 | ||
| Cost of sales | 121,578 | 108,766 | ||||
| Gross margin | 202,385 | 202,957 | ||||
| Selling, general and administrative expenses | 134,412 | 112,678 | ||||
| Income from operations | 67,973 | 90,279 | ||||
| Other expenses (income): | ||||||
| Interest expense | 1,807 | 2,357 | ||||
| (Gain) loss on foreign currency | (905 | ) | 759 | |||
| Interest and investment income | (3,020 | ) | (5,382 | ) | ||
| Other expense (income) | 38 | (41 | ) | |||
| (2,080 | ) | (2,307 | ) | |||
| Income before income taxes | 70,053 | 92,586 | ||||
| Income taxes | 16,750 | 21,678 | ||||
| Net income | 53,303 | 70,908 | ||||
| Less: Net income attributable to the noncontrolling interest | 12,255 | 16,840 | ||||
| Net income attributable to Inter Parfums, Inc. | $ | 41,048 | $ | 54,068 | ||
| Earnings per share: | ||||||
| Net income attributable to Inter Parfums, Inc. common shareholders: | ||||||
| Basic | $ | 1.28 | $ | 1.69 | ||
| Diluted | $ | 1.27 | $ | 1.68 | ||
| Weighted average number of shares outstanding: | ||||||
| Basic | 32,041 | 32,018 | ||||
| Diluted | 32,266 | 32,159 | ||||
| Dividends declared per share | $ | 0.75 | $ | 0.625 |