Interparfums sees Q1 sales tumble 19% due to coronavirus disruption
International perfume maker Inter Parfums, Inc. (Interparfums) announced on Wednesday that its sales dropped 18.7% in the first quarter, with Coach and Guess-branded fragrances helping to offset some of the negative impact of the ongoing Covid-19 pandemic.
For the first quarter ended March 31, 2020, the company reported total net sales of $144.8 million, down from $178.2 million in the prior-year period. In constant currencies, the decline in Interparfums’ quarterly sales was 17.8%.
Sales of the group’s European-based products fell 20.6% to $114.1 million, down from $143.7 million in the same period in the previous year. U.S.-based products saw a 10.9% decrease in its sales, which declined from $34.5 million to $30.7 million.
According to Interparfums CEO and chairman Jean Madar, strong sales growth of 35.9% at the Coach brand and 28.9% at Guess helped offset declines at most of the company’s other brands. Growth at Coach was boosted by the release of the “Coach Dreams” fragrance earlier this year.
All other major brands in Interparfums’ license portfolio, including Montblanc and Jimmy Choo, posted declines in quarterly comparable sales, due largely to the temporary closure of a large number of points of sale around the world in response to the coronavirus pandemic.
In order to preserve its own operations in the face of the widespread disruption caused by the global health crisis, Interparfums has reduced expenses and taken steps to protect its cash flow. As part of these measures the company has postponed a number of launches until 2021, including planned launches for the Kate Spade New York, Jimmy Choo, Anna Sui and Guess brands.
“Our solid financial situation and highly adaptable business model should allow us to endure this crisis until we can once again grow our business,” said Madar in a release. “Having entered 2020 with $253 million in cash, cash equivalents and short-term investments, and only $10.7 million of long-term debt, we have significant resources to meet our present and future obligations. We are now keenly focused on safeguarding our relationships with our partners, in particular our suppliers and customers.”
Madar further clarified that the company entered the second quarter with over $200 million of net cash and $47 million in untapped credit facilities. Nonetheless, the board of directors has authorized the temporary suspension of the company’s quarterly cash dividend.
In light of the uncertainty related to the Covid-19 pandemic, Interparfums has not provided full-year guidance for fiscal 2020.
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