March 3, 2020 / 6:57 AM / a month ago

UPDATE 1-France's Interparfums sees revenue drop as coronavirus to hit distribution

(Adds CEO, CFO quotes, details on results, background)

March 3 (Reuters) - French perfume maker Interparfums on Tuesday warned of a 10% year-on-year drop in its first-quarter sales, citing an expected disruption to its distribution due to the coronavirus outbreak.

The company’s direct exposure to China, the source of the outbreak, is limited, with the country representing 2% of its 2019 sales.

“The coronavirus epidemic may be expected to have a significant impact on the distribution of our products in all regions of Asia, Europe and the Middle East,” Chief Executive Officer Philippe Benacin said in a statement.

Interparfums, whose production is mainly concentrated in France and Europe, also highlighted a significant base effect for the decline in first-quarter revenue.

The company had launched in the beginning of last year a series of perfume lines with Montblanc Explorer, Jimmy Choo L’Eau and Jimmy Choo Floral among them providing for a high comparison base for the 2020 first-quarter sales.

The Kate Spade perfume license owner said 2019 sales rose 6% to 484.3 million euros ($539.8 million), with operating profit jumping 10% to 73.1 million euros, resulting in a net income of 50.6 million euros, up 7% year-on-year. “Our flexible business model and the considerable strength of our balance sheet will enable us to successfully weather this current period of turbulence,” Chief Financial Officer Philippe Santi said in the statement.

Interparfums proposed a 10% increase in its dividend for 2019 to 0.71 euro per share.

$1 = 0.8972 euros Reporting by Piotr Lipinski in Gdansk Editing by Shri Navaratnam and Sriraj Kalluvila

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