Inter Parfums (IPAR) Readies for Q3 Earnings: Things to Consider

Inter Parfums, Inc. IPAR is likely to register a bottom-line decline when it reports third-quarter 2022 earnings on Nov 9. Although the Zacks Consensus Estimate for quarterly earnings has moved up by a penny in the last 30 days to 99 cents per share, the projection suggests a 17.5% fall from the year-ago quarter’s reported figure. The fragrances and related products company has a trailing four-quarter earnings surprise of 31.1%, on average. IPAR reported a negative earnings surprise of 12.2% in the last reported quarter.

Things To Note

Inter Parfums has been grappling with higher selling, general and administrative (SG&A) expenses for a while. The company has been heavily investing in advertising and promotion. Due to its exposure to international markets, the company is vulnerable to currency fluctuations. The persistence of such trends is likely to have put pressure on the company’s profits in the third quarter of 2023.

That said, Inter Parfums has been benefiting from the strength of its brands. In this regard, the company’s largest and mid-sized brands are performing well. The company is also benefiting from strategic partnerships to boost assortment strength.

Inter Parfums, Inc. Price and EPS Surprise

 

Inter Parfums, Inc. Price and EPS Surprise

Inter Parfums, Inc. price-eps-surprise | Inter Parfums, Inc. Quote

 

A Look at Q3 Sales

Inter Parfums recently released record sales for third-quarter 2022. In the three months ended Sep 30, 2022, net sales increased 7% to $280 million compared with $263 million reported in the year-ago quarter. At comparable foreign currency rates, third-quarter net sales rose 12%.

Inter Parfums’ Europe-based product sales came in at $198 million, down 4% from 2021 levels. U.S.-based product sales amounted to $82 million, surging 45% from third-quarter 2021. In the company’s U.S. operations, new brands like Ferragamo, Donna Karan and DKNY generated 41% of the gains. Apart from this, organic growth from established brands like GUESS?, Oscar de la Renta, Hollister and Abercrombie & Fitch also contributed to the upside.

Management highlighted that sales of its European operations increased 12% in euro, with the three largest brands, Montblanc, Jimmy Choo and Coach, outperforming by 11%, 32% and 3% year over year, respectively. Several mid-sized brands, namely Kate Spade, Rochas, Boucheron, Van Cleef & Arpels and Karl Lagerfeld also witnessed comparable quarter sales growth. That being said, a 17% decline in the average euro-to-dollar exchange rate masked such an upside resulting in a 4% drop in the quarterly European-based product sales in dollars.

Inter Parfums stated that it witnessed modest growth in the third quarter compared with the year-ago quarter. The company continued to face some supply chain-related issues, which pushed the delivery of some holiday gift sets into the next quarter. That said, the company’s Italian operations are completely operational, with Ferragamo on track to become the second-largest brand under the U.S. operations banner during the year. Inter Parfums continues to see solid momentum in its travel retail business. In addition, the company’s travel amenities operation started to experience growth.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Inter Parfums this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Inter Parfums currently carries a Zacks Rank #3 and has an Earnings ESP of -1.24%.

Stocks With Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings this season.

Darling Ingredients Inc. DAR currently has an Earnings ESP of +0.23% and a Zacks Rank #2. The company will likely register bottom-line growth when it reports third-quarter 2022 earnings. The Zacks Consensus Estimate for the quarterly earnings per share (EPS) of $1.42 suggests a dip of 61.4% from the year-ago quarter.  

Darling Ingredients’ top line is also anticipated to have increased year over year. The consensus mark for DAR’s revenues is pegged at $1.68 billion, indicating an increase of 41.9% from the figure reported in the year-ago quarter. DAR has a trailing four-quarter earnings surprise of 3.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Campbell Soup Company CPB currently has an Earnings ESP of +4.30% and a Zacks Rank #3. The company is expected to register a decrease in the bottom line when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly earnings per share of 84 cents suggests a dip of 5.6% from the year-ago quarter.  

Campbell Soup’s top line is anticipated to have increased year over year. The consensus mark for CPB’s revenues is pegged at $2.42 billion, indicating an increase of 8.1% from the figure reported in the year-ago quarter. CPB has a trailing four-quarter earnings surprise of 6.5%, on average.

The J. M. Smucker Company SJM currently has an Earnings ESP of +1.06% and a Zacks Rank #3. The company is expected to register a decrease in the bottom line when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly earnings per share of $2.17 suggests a dip of 10.7% from the year-ago quarter.  

Smucker’s top line is anticipated to have increased year over year. The consensus mark for SJM’s revenues is pegged at $2.16 billion, indicating an increase of 5.2% from the figure reported in the year-ago quarter. Smucker has a trailing four-quarter earnings surprise of 20.8%, on average.

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