Fragrance and cosmetics company Inter Parfums finds itself navigating turbulent market conditions following a series of analyst downgrades and disappointing quarterly results. The stock has entered a discernible downward trajectory, marked by notable price declines and revised projections from financial institutions.
Market Experts Apply the Brakes
Equity research firm Oddo BHF recently adjusted its position on Inter Parfums, reducing its price target from €38 to €34. While the firm maintained its “Neutral” rating on the stock, this revision contributed to an immediate 3.8% drop in the share price. This analyst action was precipitated by interim financial results indicating a softening in business volumes. Since the start of the year, the stock has declined by 13.5%.
A more optimistic counterpoint comes from Berenberg, which reaffirmed its “Buy” recommendation with a €43 price objective. Their analysts acknowledged headwinds for the second half of the year, citing increased tariff expenses and a less favorable US dollar exchange rate. However, they emphasized the company’s underlying strengths, including a powerful brand portfolio, minimal debt levels, and a consistent management team.
Second Quarter Performance Falls Short of Forecasts
The company’s financial results for the second quarter of its 2025 fiscal year failed to meet market expectations. Earnings per share (EPS) came in at $0.99, significantly below the consensus forecast of $1.21. Revenue also missed the mark, reaching $334 million against projections of $357.56 million. This earnings announcement triggered a further 2.07% decrease in the stock’s value.
Should investors sell immediately? Or is it worth buying Inter Parfums?
Despite these setbacks, several positive indicators emerged from the report:
* The gross margin expanded by 170 basis points to a healthy 66.2%
* Year-to-date operating income saw a modest 1% increase
* Net sales for the first six months climbed 1% to $673 million
A regional breakdown reveals a mixed performance. European sales grew by 6% in the quarter, fueled by robust demand for key brands such as Lacoste (+59%) and Coach (+42%). In stark contrast, sales in the US market contracted by 20%, a drop primarily attributed to the termination of the Dunhill fragrance license.
Maintaining Guidance with a Focus on Holiday Sales
In spite of recent challenges, Inter Parfums’ leadership has reaffirmed its full-year guidance for 2025, projecting revenue of $1.51 billion and EPS of $5.35. The company’s strategy hinges on leveraging its established brands, launching new product innovations, and capitalizing on the critical year-end holiday shopping season. A major initiative includes the launch of its new proprietary brand, Solférino, which will feature a line of ten niche fragrances.
Governance Changes with Board Expansion
During a recent shareholder meeting, investors approved a proposal to increase the size of the company’s supervisory board from nine to eleven members. This expansion welcomes two new appointees: Patrick Bousquet-Chavanne, who brings 35 years of consumer goods expertise, and Hervé Bouillonnec, the Chief Commercial Officer of Interparfums USA.
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