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Inter Parfums (IPAR) Poised on Brand Strength, Expansion Efforts

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Inter Parfums, Inc. (IPAR - Free Report) has been experiencing benefits from positive trends in the fragrance market with solid product demand. The company has been witnessing a boost in its market share due to the introduction of new products and expansion of its brand offerings.

These upsides, together with strategic partnerships, have been fueling IPAR’s performance. This was evident in the fourth quarter of 2023, wherein net sales advanced 6% to $329 million, backed by solid demand for its brands, robust holiday season sell-through and a lively fragrance market.

Constant innovation in developing and marketing its range of fragrances, combined with strength of the aforementioned market, positions Inter Parfums for an exciting and dynamic year ahead. For full-year 2024, the company anticipates net sales of $1.45 billion and earnings of $5.15 per share. This guidance implies 10% growth in net sales and an 8% improvement in the bottom line from the 2023 levels.

 

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Brand Strength - A Key Driver

Inter Parfums, as a global company, generates its revenues through brands like Boucheron, Coach, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste, Lanvin, Moncler, Montblanc, Rochas, S.T. Dupont and Van Cleef & Arpels. Markedly, IPAR’s three biggest brands, Jimmy Choo, Montblanc and Coach, generated sales of more than $200 million each in 2023.

IPAR has been strengthening its portfolio through product launches and brand extensions. In the first quarter of 2024, it introduced five new premium unisex fragrances called Les Sommets Moncler for the Moncler brand. It also launched a four-scent luxury Cashmere Collection for Donna Karan or DKNY. Regarding the recent license acquisitions of Roberto Cavalli and Lacoste, the company has started deriving benefits from these acquisitions in 2024.

Shipments of Roberto Cavalli fragrance products commenced in February 2024, preceded by Lacoste in January 2024. Apart from these, there are plans for a new fragrance by GUESS in the second quarter and another flanker in the first quarter. Throughout the year, extensions for Jimmy Choo, I Want Choo, Montblanc, Legend, Coach Dreams and Roberto Cavalli's Signature are scheduled to launch. Additionally, brand extensions are being developed for Ferragamo, MCM, Abercrombie, Hollister and Oscar de la Renta.

Moving on, Inter Parfums has also been on track to expand its business through new licenses or acquisitions. It entered into an exclusive worldwide fragrance license for the prestigious Roberto Cavalli brand, which became effective on Jul 6, 2023. In December 2022, Inter Parfums’ majority-owned Paris-based subsidiary, Interparfums SA, signed a license agreement with Lacoste — a well-known fashion sports brand. IPAR has been reaping benefits from its licensing deal with G-III Apparel Group for the Donna Karan and DKNY fragrance brands (July 2022).

Is All Rosy for Inter Parfums?

Inter Parfums has been grappling with higher SG&A expenses for a while. During the fourth quarter of 2023, Inter Parfums’ SG&A expenses were $193.8 million, up from $169.1 million in the year-ago quarter. The company has been undertaking heightened investments in advertising and promotion to support its brand.

For 2024, this Zacks Rank #3 (Hold) company remains dedicated to craft compelling omnichannel advertising and promotional initiatives aimed at re-engaging loyal brand followers and captivating influential fragrance enthusiasts with its latest additions to the fragrance portfolio. Although such investments are likely to aid IPAR, these might put pressure on profits in the near term. Also, management’s guidance for 2024 includes expectations of uncertainty associated with the political environment in the Middle East and Eastern Europe.

Shares of IPAR have dropped 0.1% in the past six months against the industry’s growth of 8.4%.

3 Stocks Looking Red Hot

Here, we have highlighted three better-ranked stocks, namely B&G Foods, Inc. (BGS - Free Report) , Colgate-Palmolive (CL - Free Report) and Vita Coco Company (COCO - Free Report) .

Vita Coco Company, which develops, markets and distributes coconut water products, currently sports a Zacks Rank #1 (Strong Buy). COCO has a trailing four-quarter earnings surprise of 31.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Vita Coco Company’s current financial-year sales and earnings implies growth of 1.8% and 24.3%, respectively, from the year-ago reported numbers.

B&G Foods, which manufactures, sells and distributes a portfolio of shelf-stable and frozen foods, and household products, holds a Zacks Rank #2 (Buy) at present. BGS delivered a trailing four-quarter average earnings surprise of 23.8%.

The Zacks Consensus Estimate for B&G Foods’ current fiscal-year sales and earnings indicates a decline of 3.4% and nearly 15.2%, respectively, from the year-ago reported numbers.

Colgate-Palmolive, which manufactures and sells consumer products, currently carries a Zacks Rank #2. CL delivered a trailing four-quarter average earnings surprise of 4.2%.

The Zacks Consensus Estimate for Colgate-Palmolive’s current fiscal-year sales and earnings implies growth of 3.6% and nearly 8.1%, respectively, from the year-ago reported numbers.

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