International Flavors & Fragrances (IFF) today reported a third quarter sales increase of 6 percent to USD 618 million. However, gross profit, as a percentage of sales, was 40.0 percent compared with 41.9 percent in the prior year quarter. According to the US based creator of flavours and fragrances, this decrease primarily reflects « a shift in sales mix toward lower margin products, both regionally and by market segment, as well as higher input costs that were only partially offset by pricing and cost recovery initiatives ».
While flavours sales for the third quarter were 9 percent up on a reported basis and 5 percent up on a local currency basis, IFF’s fragrances business unit continued to lag behind, with an increase of 4 percent on a reported basis and flat in local currency. In particular, results were offset by a 14 percent decline of fine fragrances and beauty care sales in North America.
Despite the current volatility in the financial markets and a declining economic outlook, IFF remains cautiously optimistic regarding revenue growth for the fourth quarter.