Founder, BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>IPAR updated its fourth quarter 2021 outlook by raising its sales forecast for the period. IPAR’s management had expressed caution when IPAR reported third quarter results</li>
<li>IPAR is forecasting Q4 sales of $210.8 million compared to our estimate of $144.7 million. The initial guidance IPAR had provided was conservative and based on limited clarity </li>
<li>IPAR remains one of our favorite growth stories in 2022. IPAR has expanded its brand portfolio and has a fragrance lineup that should result in sales growing by double digits</li>
</ul>


IPAR updated its fourth quarter 2021 outlook by raising its sales forecast for the period. IPAR’s management had expressed caution when IPAR reported third quarter results
IPAR is forecasting Q4 sales of $210.8 million compared to our estimate of $144.7 million. The initial guidance IPAR had provided was conservative and based on limited clarity 
IPAR remains one of our favorite growth stories in 2022. IPAR has expanded its brand portfolio and has a fragrance lineup that should result in sales growing by double digits


<ul>
<li>IPAR is on a sales trajectory to exceed expectations for 2021 and 2022 even though renewed COVID-19 concerns could hamper duty-free sales rebound</li>
<li>The sales growth IPAR has experienced year to date has been broad based with all of the Company’s major brands producing double-digit growth from 2019 levels</li>
<li>We believe IPAR continues to have a conservative approach with its initial annual sales guidance.</li>
</ul>


IPAR is on a sales trajectory to exceed expectations for 2021 and 2022 even though renewed COVID-19 concerns could hamper duty-free sales rebound
The sales growth IPAR has experienced year to date has been broad based with all of the Company’s major brands producing double-digit growth from 2019 levels
We believe IPAR continues to have a conservative approach with its initial annual sales guidance.


IPAR: Multiple Brands for Success in 2022, PT to $125

<ul type="disc"><li>Demand for fragrances continues to outpace expectations with Inter Parfums (IPAR) reporting preliminary third quarters sales materially more than we were forecasting. While we have been steadfast on proclaiming IPAR’s sales guidance as too light, we were not expecting the level of outperformance IPAR experienced in the third quarter.</li></ul> <ul type="disc"><li>The growth in sales is due to the return of the consumer and introduction of several new products this year. The product pipeline is expanding with the addition of Moncler and Salvatore Ferragamo this year and Donna Karan in 2022.</li></ul> <ul type="disc"><li>IPAR is facing some supply chain challenges by not being able to meet market demand. IPAR is projecting fourth quarter sales to decline more than normal from the third quarter due to uncertainties with logistics. IPAR is asserting they are taking a conservative stance while we believe management might be trying to tame Wall Street estimates after their third quarter performance.</li></ul>

Demand for fragrances continues to outpace expectations with Inter Parfums (IPAR) reporting preliminary third quarters sales materially more than we were forecasting. While we have been steadfast on proclaiming IPAR’s sales guidance as too light, we were not expecting the level of outperformance IPAR experienced in the third quarter. The growth in sales is due to the return of the consumer and introduction of several new products this year. The product pipeline is expanding with the addition of Moncler and Salvatore Ferragamo this year and Donna Karan in 2022. IPAR is facing some supply chain challenges by not being able to meet market demand. IPAR is projecting fourth quarter sales to decline more than normal from the third quarter due to uncertainties with logistics. IPAR is asserting they are taking a conservative stance while we believe management might be trying to tame Wall Street estimates after their third quarter performance.

<ul type="disc"><li>
Inter Parfums (IPAR) announced it has signed a license to develop and sell fragrances under the Donna Karan and DKNY brands beginning in the second half of 2022. This is the second license win IPAR has announced in the last six months, the prior being Salvatore Ferragamo.</li></ul> <ul type="disc"><li>IPAR won the Donna Karan license away from Estee Lauder (EL) who had been the exclusive licensee since the inception of the brand’s fragrance line. IPAR’s license would begin on July 1, 2022 by taking over the fragrances already on the market.</li></ul> <ul type="disc"><li>IPAR’s stock has always received a relatively high valuation due to the steady growth the business has experienced in the past. The addition of Donna Karan should have a positive contribution to earnings in 2022 and 2023 and is not being fully considered in the consensus estimates nor in the current valuation.</li></ul>


Inter Parfums (IPAR) announced it has signed a license to develop and sell fragrances under the Donna Karan and DKNY brands beginning in the second half of 2022. This is the second license win IPAR has announced in the last six months, the prior being Salvatore Ferragamo. IPAR won the Donna Karan license away from Estee Lauder (EL) who had been the exclusive licensee since the inception of the brand’s fragrance line. IPAR’s license would begin on July 1, 2022 by taking over the fragrances already on the market. IPAR’s stock has always received a relatively high valuation due to the steady growth the business has experienced in the past. The addition of Donna Karan should have a positive contribution to earnings in 2022 and 2023 and is not being fully considered in the consensus estimates nor in the current valuation.

<ul type="disc"><li>
Inter Parfums (IPAR) disclosed demand was running ahead of supply even though ad spending continues to trail the target level the Company tries to spend every year. IPAR had already disclosed its second quarter sales leaving the official announcement for more of the underpinnings of the business.</li></ul> <ul type="disc"><li>The release of new fragrances this year has been met with greater consumer demand than expected even though duty-free stores remain mostly closed. IPAR plans to have new fragrances for its top brands next year as well.</li></ul> <ul type="disc"><li>The addition of Salvatore Ferragamo to IPAR’s product portfolio sets the course for further growth in 2022.</li></ul> <ul type="disc"><li>Overall demand environment would support IPAR exceeding sales guidance prior to adding in the benefits of the Ferragamo license.</li></ul> <ul type="disc"><li>Our price target is now $100 from $80 to reflect our 2022 earnings forecast.</li></ul>


Inter Parfums (IPAR) disclosed demand was running ahead of supply even though ad spending continues to trail the target level the Company tries to spend every year. IPAR had already disclosed its second quarter sales leaving the official announcement for more of the underpinnings of the business. The release of new fragrances this year has been met with greater consumer demand than expected even though duty-free stores remain mostly closed. IPAR plans to have new fragrances for its top brands next year as well. The addition of Salvatore Ferragamo to IPAR’s product portfolio sets the course for further growth in 2022. Overall demand environment would support IPAR exceeding sales guidance prior to adding in the benefits of the Ferragamo license. Our price target is now $100 from $80 to reflect our 2022 earnings forecast.

United States

Inter Parfums, Inc. manufactures, markets, and distributes a wide array of fragrances and fragrance related products. The Company's European-based operations produce and distribute prestige fragrance products primarily under license with brand owners. It's U.S.-based operations primarily produce and sell fragrance and personal care products under several specialty retail brands.

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Inter Parfums (IPAR US)

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