Home Most Popular Investing <html> International Flavors & Fragrances Q4 Earnings Fall Short, Record Decrease Seen Year-Over-Year

International Flavors & Fragrances Q4 Earnings Fall Short, Record Decrease Seen Year-Over-Year

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  International Flavors & Fragrances Q4 Earnings Fall Short, Record Decrease Seen Year-Over-Year

International Flavors & Fragrances Inc. (IFF) has revealed adjusted earnings of 72 cents per share in the last quarter of 2023, falling behind the Zacks Consensus Estimate of 75 cents – marking a 13% decrease from the same period in the previous year.

The company registered net sales of $2.70 billion in the final quarter of 2023, reflecting a 5% drop from the year before, failing to meet the Zacks Consensus Estimate. On the upside, currency-neutral sales grew by 1% aided by the Scent, Health & Biosciences segments.

Operational Performance

Cost of goods sold for the last quarter dropped by 6.7% year over year to $1.8 billion, while the gross profit saw a 1% decline to $860 million. Research and development expenses increased by 10% to $157 million compared to the prior year.

Adjusted operating EBITDA rose to $461 million, marking a 4.5% increase from the previous year. Notably, the currency-neutral adjusted operating EBITDA was 22% higher than the previous year.

Segment Performances

Revenues in the Nourish segment dropped 11.6% to $1.39 billion in the last quarter of 2023. On a comparable basis, the currency-neutral adjusted operating EBITDA increased by 3% due to gains from price increases and productivity improvements.

Revenues generated in the Health & Bioscience segment reached $528 million, showing a 5% rise on a comparable basis. Adjusted operating EBITDA for the segment escalated to $162 million from $121 million in the prior year.

The Scent segment’s revenues were $578 million, indicating an 11% increase led by growth in both Consumer Fragrance and Fine Fragrance. On a comparable basis, the currency-neutral adjusted operating EBITDA improved by 34%.

Financial Insights

The company had cash and cash equivalents of $703 million at the end of 2023, observing an increase from the prior year. However, long-term debt decreased to $9.2 billion from $10.4 billion in 2022.

2023 Performance & 2024 Guidance

In 2023, International Flavors recorded adjusted earnings of $3.34 per share, in line with the Zacks Consensus Estimate but marking a decrease of 38% from 2022. The company reported net sales of $11.48 billion in 2023, down 7.7% from the previous year.

In fiscal 2024, the company anticipates sales between $10.8 billion and $11.1 billion, with a flat to 3% volume increase and an expected 2.5% decline in pricing.

Price Performance & Rank

Over the past year, International Flavors’ shares have observed a 10.3% decline compared to the industry’s decrease of 23.3%. The company currently holds a Zacks Rank #3 (Hold).

Conversely, some better-ranked stocks in the Consumer Staples sector are Fomento Económico Mexicano, S.A.B. de C.V. (FMX), e.l.f. Beauty, Inc. (ELF) and Inter Parfums, Inc. (IPAR).

Investment Opportunities in the Fragrance and Beauty Industry

The Fragrance and Beauty industry is experiencing a substantial resurgence, with notable companies such as International Flavors & Fragrances Inc. (IFF), Inter Parfums, Inc. (IPAR), and e.l.f. Beauty (ELF) making remarkable strides in the market. These industry stalwarts are illustrating stellar financial performance, making them potential investment opportunities that should not go unnoticed by keen investors.

E.l.f. Beauty (ELF) Stuns Financial Markets

e.l.f. Beauty has showcased its dominance in the market by reporting a staggering 83.1% increase from the prior-year earnings. The consensus estimate for fiscal 2024 earnings has also grown impressively by 13% over the past 60 days. Furthermore, ELF shares have exhibited outstanding growth, surging by a whopping 134% in the past year.

Inter Parfums, Inc. (IPAR) Showcases Solid Growth

Inter Parfums’ financial achievements are equally noteworthy, with the Zacks Consensus Estimate for IPAR’s fiscal 2024 earnings per share pointing towards a substantial 20.4% growth from the prior-year actual numbers. Earnings estimates have also moved 1% higher in the past 60 days, solidifying the company’s upward trajectory. IPAR’s shares have gained an impressive 29.5% in the past year, further bolstering its appeal to investors.

5 Stocks Set to Double

These impressive financial performances come at a pivotal time for investors, as emerging players in the Fragrance and Beauty industry continue to make substantial gains. The opportunity to invest in these stocks is akin to the chance of getting in on the ground floor of a potential home run, given the promising outlook for these companies.

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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Investors are presented with a remarkable opportunity to delve into the flourishing fragrance and beauty market and reap the benefits of these companies’ impressive growth. The potential to gain +100% or more in 2023 from investing in these stocks cannot be overlooked, especially amidst the current buoyancy of the industry.