Core Points - Interparfums, Inc. held its Annual Meeting of Shareholders on September 10, 2025, where shareholders approved all proposals, including the election of two new members to the Board of Directors [1][2][10] Board of Directors - The Board of Directors was expanded from nine to eleven members, with the election of Patrick Bousquet-Chavanne and Hervé Bouillonnec as new directors [3][4] - All nine incumbent directors were re-elected, including Jean Madar and Michel Atwood [2] New Directors' Background - Patrick Bousquet-Chavanne has over 35 years of experience in the fast-moving consumer goods and retail sectors, having held senior roles at companies like The Estee Lauder Companies Inc. and LVMH [4][5] - Hervé Bouillonnec, currently the Chief Commercial Officer of Interparfums, USA LLC, has extensive experience in luxury brand management, previously working with Yves Saint Laurent and Givenchy [8][9] Shareholder Approvals - Shareholders approved the compensation of the Company's named executive officers as disclosed in the proxy statement [10] - The cancellation of "hook shares" held by Inter Parfums Holding SA was also approved by shareholders [11] Company Overview - Interparfums, Inc. has been operating in the global fragrance business since 1982, producing and distributing a wide array of prestige fragrance products under various brand licenses [12] - The company manages its operations through its 72% owned subsidiary, Interparfums SA, in Europe and wholly owned subsidiaries in the United States and Italy [12] - The portfolio includes brands such as Abercrombie & Fitch, Coach, and Jimmy Choo, with products distributed in over 120 countries [13]

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1]. Group 1: Analyst Background - The analyst is a certified FMVA and FPWMP, which provides expertise in financial statement analysis, valuation modeling, and investment portfolio construction [1]. - Participation in the CFA Research Challenge has equipped the analyst with practical experience in equity analysis and industry research [1]. - The analyst holds a degree in Finance from Alexandria University, graduating in 2024 with a CGPA of 3.6, showcasing a solid academic foundation [1]. Group 2: Professional Experience - The analyst has worked with a confidential client, preparing investment reports across various sectors, including healthcare, consumer staples, and industrials, enhancing the ability to evaluate companies across diverse industries [1]. - In 2023, the analyst joined AIESEC, further developing leadership, communication, and teamwork skills through global exchange and project collaboration [1].

Core Viewpoint - Interparfums' international operations are crucial for assessing its financial strength and future growth potential, especially given the company's global presence [1][2][3]. Revenue Performance - The total revenue for Interparfums in the quarter ending June 2025 was $333.94 million, reflecting a decline of 2.4% year over year [4]. - Breakdown of international revenues showed varying performance across regions, highlighting the importance of overseas operations [5][6][7][8][9]. Regional Revenue Contributions - Asia/Pacific contributed $41.5 million, or 12.4% of total revenue, which was a surprise of -27.98% compared to the consensus estimate of $57.62 million [5]. - Central and South America generated $32.6 million, accounting for 9.8% of total revenue, exceeding expectations by +2.39% [6]. - Western Europe contributed $89.9 million, or 26.9% of total revenue, surpassing analyst expectations by +5.99% [7]. - Middle East and Africa accounted for $27.4 million, or 8.2% of total revenue, slightly exceeding expectations by +0.55% [8]. - Eastern Europe generated $20.2 million, or 6.1% of total revenue, falling short of expectations by -19.46% [9]. Future Revenue Projections - For the current fiscal quarter, analysts anticipate revenues of $429.68 million, representing a 1.2% increase year over year, with specific contributions expected from various regions [10]. - For the full year, total revenue is projected to reach $1.49 billion, reflecting a 2.3% increase from the previous year, with detailed regional contributions outlined [11][12]. Market Dependency and Trends - The company's reliance on global markets for revenue presents both opportunities and challenges, making the monitoring of international revenue trends essential for predicting future performance [13]. - Analysts are closely observing these trends, especially in light of increasing global interdependence and geopolitical issues [14].

Financial Data and Key Metrics Changes - For the first half of 2025, organic net sales rose by 3%, with net sales reported at $334 million for the second quarter, a slight decline from the same period in 2024 [5][21][22] - Gross margin expanded by 170 basis points to 66.2% for the first half and 150 basis points to 65% for the second quarter [22] - Operating income decreased by 9% to $59 million for the quarter, but increased by 1% to $134 million year-to-date [23][24] - Net income attributable to U.S.-based operations decreased by 26% to $18 million, largely due to lower sell-in [27] Business Line Data and Key Metrics Changes - European-based operations reported net sales growth of 7% in the second quarter and 6% on an organic basis for the first half [5][26] - U.S.-based operations saw a reported second quarter net sales decline of 20%, with organic sales down 14% [6][27] - SG&A expenses as a percentage of net sales increased to 48.5% for the second quarter compared to 45.6% in 2024 [22] Market Data and Key Metrics Changes - North America sales rose by 7%, while Western Europe sales increased by 3% [7] - Sales in Eastern Europe were up 14%, but Asia Pacific fragrances declined by 12% [8] - The Middle East and Africa region declined by 19%, reflecting the exit of the Dunhill license [8] Company Strategy and Development Direction - The company is focusing on product innovation, effective advertising, and promotional programs to maintain demand for fragrance products [4] - Plans to launch new fragrances and expand e-commerce presence, including flagship boutiques in Paris and an e-commerce platform [10][12] - The company is transitioning to third-party logistics to enhance operational efficiency [14] Management's Comments on Operating Environment and Future Outlook - Management noted that momentum eased in the second quarter, with challenges expected to continue into the second half of the year [4] - The company remains confident in achieving its full-year objectives, supported by a resilient fragrance category and tariff-driven pricing actions [28][29] - Management highlighted the importance of being agile to respond to potential surges in orders during the holiday season [39] Other Important Information - The company has been selected as the exclusive fragrance licensee for Laurentian, with plans to launch a women's fragrance in 2027 [11] - E-commerce channels are experiencing strong momentum, particularly on platforms like Amazon and TikTok [12][13] Q&A Session Summary Question: Can you discuss promotional levels and destocking trends? - Management indicated that destocking is difficult to assess but noted a slowdown in the market, with retailers being more prudent [34][35] - End demand was reported as good, with the market up 5% in the second quarter [36] Question: Are tariffs impacting retailer purchasing? - Management clarified that retailers are not subject to tariffs, but distributors are, leading to a more cautious purchasing approach [46] Question: Will the company continue to add new brands? - Management expressed a commitment to diversifying the portfolio and indicated capacity to take on more brands in the future [50] Question: What risks does retailer caution impose? - Management acknowledged the risk of revenue being pushed into Q4 due to uncertainty in purchasing [55] Question: Will smaller packaging be considered for TikTok? - Management confirmed that smaller packaging will be developed for certain brands on TikTok to meet price point demands [58] Question: What caused the increase in debt from Q1 to Q2? - Management explained that the increase was due to a loan taken out for asset purchases and additional office space [61]

Financial Data and Key Metrics Changes - For the first half of 2025, organic net sales rose by 3%, with net sales of $334 million in Q2, a slight decline from the previous year due to sales shifting from Q2 to Q1 [5][21][24] - Gross margin expanded by 170 basis points to 66.2% for the first half, driven by favorable brand and channel mix [22] - Operating income decreased by 9% to $59 million for Q2, but increased by 1% to $134 million year-to-date [23][24] Business Line Data and Key Metrics Changes - European operations reported net sales growth of 7% in the first half, while U.S. operations saw a decline of 12% due to the discontinuation of the Dunhill license [25][26] - SG&A expenses as a percentage of net sales increased to 48.5% for Q2, compared to 45.6% in the previous year [22] Market Data and Key Metrics Changes - North America sales rose by 7%, while Western Europe sales increased by 3% in the first half [7] - Sales in Eastern Europe were up 14%, but Asia Pacific fragrances declined by 12% [8] Company Strategy and Development Direction - The company is focusing on product innovation, effective advertising, and promotional programs to maintain demand for fragrance products [4] - Plans to launch new fragrances and expand e-commerce presence, including a flagship boutique in Paris and an e-commerce platform [10][12] Management's Comments on Operating Environment and Future Outlook - Management noted that momentum eased in Q2, with challenges expected to continue into the second half of the year, but remains optimistic about resolving these challenges by 2026 [4][5] - The company reaffirmed its 2025 guidance for net sales of $1.51 billion and earnings per diluted share of $5.35 [28] Other Important Information - The company has been selected as the exclusive fragrance licensee for Laurentian, planning to launch its first women's fragrance in 2027 [11] - The company is transitioning out of its own facility in Dayton, New Jersey, to a third-party logistics partner [14] Q&A Session Summary Question: Can you talk about promotional levels and destocking trends? - Management noted that destocking is difficult to assess, but there has been a slowdown in the market, leading to more prudent purchasing by retailers and distributors [34][35] - End demand was reported as good, with the market up 5% in Q2 [36] Question: What are the tariff-related impacts on second-quarter performance? - Management clarified that retailers are not subject to tariffs, but distributors are, and the uncertainty around tariffs has led to more cautious purchasing [45][46] Question: Will the company continue to add new brands to its portfolio? - The company is always looking to diversify its portfolio and believes it can take on more brands while potentially phasing out smaller brands over time [48][49] Question: What risks does the retailer's cautious purchasing pose? - Management acknowledged that uncertainty could lead to revenue being pushed into Q4, but there is pent-up demand expected to drive orders in the latter half of the year [55][56] Question: Will the company consider smaller packaging for e-commerce platforms? - The company is developing special programs for e-commerce, including smaller sizes for platforms like TikTok, while also expanding its presence on Amazon [58][60]

Core Insights - Interparfums, Inc. reported second-quarter 2025 results with both net sales and earnings missing the Zacks Consensus Estimate, showing year-over-year declines [1][3][9] Sales and Earnings Performance - The company posted quarterly earnings of $0.99 per share, a 13% decrease from $1.14 in the prior-year period, missing the estimate of $1.10 [3][9] - Consolidated net sales were $334 million, down 2% from $342 million in the year-ago period, also missing the estimate of $341 million [3][9] Cost and Margin Analysis - Interparfums achieved a consolidated gross margin of 66.2%, reflecting a 170-basis-point increase compared to the prior-year period, driven by a favorable segment and brand mix [4][9] - Selling, general and administrative expenses accounted for 48.5% of net sales, an increase of 290 basis points year-over-year, attributed to higher advertising and promotional expenditures, which represented 20.6% of net sales [5] Financial Health - The company ended the quarter with cash and cash equivalents of $151.5 million, long-term debt of $153.1 million, and total equity of $1,056.8 million [6] - A cash dividend of $0.80 per share was announced, payable on September 30, 2025, to shareholders of record as of September 15 [6] Future Outlook - Management noted strong U.S. demand, which accounted for 35% of second-quarter sales, despite a slowdown in global fragrance market growth [2] - The company reaffirmed its 2025 guidance, estimating net sales of $1.51 billion and earnings per share of $5.35, while remaining cautious about macroeconomic uncertainties [7][9]

Core Viewpoint - Interparfums reported Q2 2025 financial results that fell short of analyst expectations, with both revenue and EPS declining year-over-year, yet the company maintained improved gross margins and reaffirmed its full-year financial outlook [1][10]. Financial Performance - EPS (GAAP) for Q2 2025 was $0.99, missing the consensus estimate of $1.08, and down 13% from $1.14 in Q2 2024 [2]. - Revenue (GAAP) was $333.94 million, slightly below the $334.0 million estimate, and down 2% from $342.2 million in Q2 2024 [2]. - Gross margin improved to 66.2%, up 1.7 percentage points from 64.5% a year earlier, while operating margin decreased to 17.7%, down 1.2 percentage points from 18.9% [2][7]. - Net income attributable to Interparfums, Inc. was $32.0 million, a 13% decline from $36.8 million in Q2 2024 [2]. Business Model and Strategy - Interparfums develops and distributes prestige fragrances through long-term licensing agreements with brands like Jimmy Choo, Lacoste, Coach, and Montblanc, allowing access to global markets [3]. - Recent initiatives include expanding the brand lineup with new licensing deals for Off-White and Longchamp, and growing proprietary offerings like Solférino [4][6]. Regional Performance - The U.S. accounted for 35% of net sales in Q2 2025, with Western Europe growing sales by 3% year-to-date and Central and South America increasing by 7% [5]. - Eastern Europe saw a 14% increase in sales, while the Asia-Pacific region experienced a 12% decline, primarily due to lower results in Australia and distribution issues in South Korea [5]. - The Middle East and Africa reported a 19% decline in net sales, largely due to the end of the Dunhill fragrance license [5]. Financial Health and Outlook - Cash and short-term investments totaled $205 million as of June 30, 2025, down from $234.7 million at the end of 2024, but working capital remained healthy at $654 million [9]. - The company improved operating cash flow, generating $5 million in cash in the first half of 2025, compared to a $26 million consumption in the prior year [9]. - Interparfums raised its quarterly dividend by 7% to $0.80 per share, payable on September 30, 2025 [9]. Future Guidance - Management reaffirmed its full-year 2025 guidance, expecting net sales of $1.51 billion and diluted EPS of $5.35, indicating confidence in a stronger second half of 2025 [10]. - The company aims to sustain gross margin gains and convert investments in new brands into higher sales and profits while managing regional volatility [11].

Company Performance - Interparfums reported quarterly earnings of $0.99 per share, missing the Zacks Consensus Estimate of $1.1 per share, and down from $1.14 per share a year ago, representing an earnings surprise of -10.00% [1] - The company posted revenues of $333.94 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.07%, and down from $342.23 million year-over-year [2] - Over the last four quarters, Interparfums has surpassed consensus EPS estimates three times and topped consensus revenue estimates just once [2] Stock Performance - Interparfums shares have lost about 8.8% since the beginning of the year, while the S&P 500 has gained 7.6% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $1.87 on revenues of $429.68 million, and for the current fiscal year, it is $5.21 on revenues of $1.49 billion [7] - The outlook for the industry can materially impact the stock's performance, with the Consumer Products - Discretionary industry currently in the top 27% of Zacks industries [8]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) Presents the company's interim consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for the interim periods ended June 30, 2025, are presented, including balance sheets, income statements, comprehensive income statements, changes in equity, and cash flow statements. These statements are condensed per SEC rules and should be read in conjunction with the 2024 Form 10-K. The results for the six months ended June 30, 2025, are not necessarily indicative of the full fiscal year. - The financial statements are unaudited and condensed in accordance with SEC rules, containing only normal recurring adjustments[10](index=10&type=chunk) - The results for the six months ended June 30, 2025, are not necessarily indicative of the results to be expected for the entire fiscal year[11](index=11&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Presents a condensed overview of the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--------------------------------- | :------------ | :---------------- | :--------- | | Total Assets | $1,561,748 | $1,411,261 | 10.67% | | Total Current Liabilities | $333,001 | $332,427 | 0.17% | | Long-term Debt, less current portion | $153,112 | $115,734 | 32.30% | | Total Equity | $1,056,752 | $942,645 | 12.10% | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Details the company's net sales, gross margin, operating income, and net income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Income Highlights (in thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Net sales | $333,936 | $342,229 | (2.42)% | $672,755 | $666,192 | 0.99% | | Gross margin | $221,089 | $220,757 | 0.15% | $437,066 | $423,142 | 3.29% | | Income from operations | $59,176 | $64,828 | (8.69)% | $134,253 | $132,801 | 1.09% | | Net income attributable to Interparfums, Inc. | $31,988 | $36,823 | (13.13)% | $74,480 | $77,871 | (4.35)% | | Diluted EPS | $0.99 | $1.14 | (13.16)% | $2.32 | $2.41 | (3.73)% | | Dividends declared per share | $0.80 | $0.75 | 6.67% | $1.60 | $1.50 | 6.67% | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Reports net income and other comprehensive income components, including translation adjustments, for the interim periods Consolidated Statements of Comprehensive Income Highlights (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Net income | $41,197 | $46,598 | (11.60)% | $96,600 | $99,901 | (3.29)% | | Translation adjustments, net of tax | $59,180 | $(5,912) | N/A | $87,102 | $(20,494) | N/A | | Comprehensive income attributable to Interparfums, Inc. | $77,243 | $32,376 | 138.59% | $145,120 | $63,195 | 129.65% | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines the changes in total equity, retained earnings, and accumulated other comprehensive loss for the six months ended June 30, 2025 and 2024 Consolidated Statements of Changes in Equity Highlights (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :------------------------------------ | :------------ | :------------ | :--------- | | Total equity | $1,056,752 | $901,206 | 17.26% | | Retained earnings (6 months) | $787,031 | $724,268 | 8.67% | | Accumulated other comprehensive loss (6 months) | $(1,599) | $(54,864) | 97.08% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities, along with the period-end cash and cash equivalents Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------- | | Net cash provided by (used in) operating activities | $4,510 | $(26,459) | N/A | | Net cash provided by investing activities | $24,234 | $50,505 | (52.01)% | | Net cash used in financing activities | $(12,608) | $(72,012) | (82.50)% | | Cash and cash equivalents - end of period | $151,454 | $38,973 | 288.56% | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed disclosures on accounting policies, recent agreements, inventories, fair value, derivatives, leases, share-based payments, EPS, and segment information - The notes provide detailed information on significant accounting policies, recent agreements, accounting pronouncements, inventories, fair value measurements, derivative instruments, leases, share-based payments, EPS computation, and segment/geographic areas[26](index=26&type=chunk) [1. Significant Accounting Policies](index=9&type=section&id=1.%20Significant%20Accounting%20Policies) Outlines the company's adherence to accounting policies detailed in its 2024 Form 10-K consolidated financial statements - The company follows the accounting policies set forth in its consolidated financial statements included in the Form 10-K for the year ended December 31, 2024[26](index=26&type=chunk) [2. Recent Agreements](index=9&type=section&id=2.%20Recent%20Agreements) Details new and renewed license agreements, acquisitions of intellectual property rights, and the expiration of certain brand licenses - Interparfums SA signed an exclusive license agreement with Longchamp through **December 31, 2036**, with the first launch expected in **2027**[27](index=27&type=chunk) - Interparfums SA acquired all intellectual property rights for Maison Goutal in **March 2025**, with commercial use beginning **January 1, 2026**[28](index=28&type=chunk) - The Coach license agreement was renewed for an additional **5-year term**, extending through **June 30, 2031**[29](index=29&type=chunk) - The Fierce distribution agreement was expanded for global distribution, while the existing Abercrombie & Fitch and Hollister fragrance license agreement will expire on **March 14, 2028**[30](index=30&type=chunk) - Interparfums SA obtained all Off-White® brand names and trademarks for fragrance and cosmetic products, with commercial use starting **January 1, 2026**[31](index=31&type=chunk) - The Van Cleef & Arpels license agreement was renewed for an additional **9-year term**, through **December 31, 2033**[32](index=32&type=chunk) - An exclusive worldwide license for Roberto Cavalli brand perfumes became effective in **July 2023**, with shipments starting in **February 2024**[33](index=33&type=chunk) - An exclusive worldwide license for Lacoste brand perfumes and cosmetics became effective in **January 2024**, with shipments starting in **January 2024**[35](index=35&type=chunk) - The Dunhill fragrance license expired on **September 30, 2023**, and all related inventory was sold off by **September 30, 2024**[36](index=36&type=chunk) - A **$4.0 million impairment charge** was taken on the Rochas fashion trademark in **Q4 2024** due to operational challenges and a strategic shift, following previous charges in 2021 and 2022[37](index=37&type=chunk) [3. Recent Accounting Pronouncements](index=10&type=section&id=3.%20Recent%20Accounting%20Pronouncements) Discusses the potential impact of recently issued accounting standards updates on expense disaggregation and income tax disclosures - ASU No. 2024-03 (Expense Disaggregation Disclosures) requires more detailed disclosures about expense types, effective for fiscal years beginning after **December 15, 2026**, with the company evaluating its impact[38](index=38&type=chunk) - ASU No. 2023-09 (Improvements to Income Tax Disclosures) requires enhanced income tax disclosures, effective for annual periods beginning after **December 15, 2024**, with the company evaluating its impact[39](index=39&type=chunk) [4. Inventories](index=10&type=section&id=4.%20Inventories) Presents a breakdown of inventory values, including raw materials and finished goods, as of June 30, 2025, and December 31, 2024 Inventories (in thousands) | Inventory Type | June 30, 2025 | December 31, 2024 | Change (%) | | :---------------------------- | :------------ | :---------------- | :--------- | | Raw materials and component parts | $148,810 | $137,572 | 8.17% | | Finished goods | $276,539 | $234,348 | 18.00% | | Total Inventories | $425,349 | $371,920 | 14.37% | [5. Fair Value Measurement](index=11&type=section&id=5.%20Fair%20Value%20Measurement) Explains the categorization of financial assets and liabilities based on fair value input reliability and details fair value measurements - Financial assets and liabilities measured at fair value are categorized into **three levels** based on input reliability[43](index=43&type=chunk) Fair Value Measurements of Assets (in thousands) | Asset Type | June 30, 2025 Total Fair Value | December 31, 2024 Total Fair Value | Change (%) | | :-------------------------------------------------------------------------------- | :----------------------------- | :----------------------------- | :--------- | | Short-term investments | $53,901 | $109,311 | (50.69)% | | Interest rate swaps | $1,527 | $1,967 | (22.47)% | | Foreign currency forward exchange contracts not accounted for using hedge accounting | $5,793 | $0 | N/A | | Foreign currency forward exchange contracts accounted for using hedge accounting | $7,511 | $0 | N/A | - Foreign currency forward exchange contracts and interest rate swaps are valued based on quotations from financial institutions, primarily using **Level 2 inputs**[47](index=47&type=chunk)[44](index=44&type=chunk) [6. Derivative Financial Instruments](index=12&type=section&id=6.%20Derivative%20Financial%20Instruments) Describes the company's use of foreign currency forward exchange contracts and interest rate swaps to manage financial risks - The company uses foreign currency forward exchange contracts to hedge exposure related to foreign currency receivables and future sales, aiming for **high effectiveness**[48](index=48&type=chunk) - Interest rate swaps are used to manage variable interest rate debt, including a **€50 million loan** for the Lacoste trademark acquisition (swapped to a **maximum 2% rate**) and **€80 million** of a **€120 million loan** for a Paris office building (swapped to a **fixed 1.1% rate**)[49](index=49&type=chunk)[50](index=50&type=chunk) - As of **June 30, 2025**, the company had foreign currency forward exchange contracts with notional amounts of approximately **USD $111 million**, all with maturities of less than one year[53](index=53&type=chunk) [7. Leases](index=13&type=section&id=7.%20Leases) Details the company's operating lease arrangements for offices, warehouses, vehicles, and equipment, including average lease term and discount rate - The company primarily leases offices, warehouses, vehicles, and office equipment, classified as **operating leases**[55](index=55&type=chunk) - As of **June 30, 2025**, the weighted average remaining lease term was **3.7 years**, and the weighted average discount rate was **3.1%**[57](index=57&type=chunk) - Rental expense related to operating leases was **$3.4 million** for the six months ended **June 30, 2025**, compared to **$3.3 million** for the corresponding period of the prior year[57](index=57&type=chunk) [8. Share-Based Payments](index=13&type=section&id=8.%20Share-Based%20Payments) Reports share-based payment expenses, outstanding stock options, and cash proceeds from exercises, including a June 2025 share distribution - Share-based payment expense decreased income before income taxes by **$0.95 million** for the six months ended **June 30, 2025**, compared to **$1.17 million** in the prior year[61](index=61&type=chunk) - As of **June 30, 2025**, **214,800 stock options** were outstanding with a weighted average exercise price of **$105.70**, and unrecognized compensation cost aggregated **$2.9 million**[62](index=62&type=chunk) - Cash proceeds from stock options exercised increased to **$2.112 million** for the six months ended **June 30, 2025**, from **$1.370 million** in the prior year[63](index=63&type=chunk) - In **June 2025**, **106,046 shares** of Interparfums SA stock were distributed to employees, fulfilling a **March 2022 grant plan**, with an aggregate cost of **$4.5 million** for the company to avoid dilution[65](index=65&type=chunk)[66](index=66&type=chunk)[69](index=69&type=chunk) [9. Net Income Attributable to Interparfums, Inc. Common Shareholders](index=15&type=section&id=9.%20Net%20Income%20Attributable%20to%20Interparfums%2C%20Inc.%20Common%20Shareholders) Provides a breakdown of net income and earnings per share attributable to common shareholders for the interim periods Earnings Per Share (in thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to Interparfums, Inc. | $31,988 | $36,823 | $74,480 | $77,871 | | Basic EPS | $1.00 | $1.15 | $2.32 | $2.43 | | Diluted EPS | $0.99 | $1.14 | $2.32 | $2.41 | [10. Segment and Geographic Areas](index=16&type=section&id=10.%20Segment%20and%20Geographic%20Areas) Divides the company's operations into European and United States segments, detailing their respective contributions to net sales and total assets - The company manages its business in **two segments**: European based operations (primarily France) and United States based operations[75](index=75&type=chunk) - European based operations contributed approximately **72% of net sales** for the six months ended **June 30, 2025**, while United States based operations contributed **28%**[87](index=87&type=chunk)[88](index=88&type=chunk) Total Assets by Segment (in thousands) | Segment | June 30, 2025 | December 31, 2024 | | :-------------- | :------------ | :---------------- | | United States | $416,333 | $352,139 | | Europe | $1,163,019 | $1,073,326 | | Total Assets | $1,561,748 | $1,411,261 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's operations, recent events, critical accounting policies, and a detailed analysis of financial performance for the three and six months ended June 30, 2025, compared to the prior year. It also discusses liquidity, capital resources, and future outlook. - The company operates in the fragrance business, manufacturing, marketing, and distributing prestige fragrances and related products through European and United States based operations[86](index=86&type=chunk) - The business is not capital intensive, as the company does not own manufacturing facilities and sources components from suppliers, with third-party fillers manufacturing finished products[93](index=93&type=chunk) - The company manages financial exposures, particularly foreign currency exchange rates, through a controlled program of risk management, including derivative financial instruments[95](index=95&type=chunk) [Overview](index=19&type=section&id=Overview) Provides a high-level summary of the company's operational structure, key brand contributions, and geographic sales distribution - European based operations represented approximately **72% of net sales** and United States based operations represented **28% of net sales** for the six months ended **June 30, 2025**[87](index=87&type=chunk)[88](index=88&type=chunk) - The company's largest brands (Jimmy Choo, Coach, Montblanc, GUESS, Lacoste, Donna Karan/DKNY, and Ferragamo) represented **77% of net sales** for the six months ended **June 30, 2025**[89](index=89&type=chunk) Product Sales by Largest Brands (% of Net Sales) | Brand | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | | Coach | 17% | 14% | | Jimmy Choo | 17% | 16% | | Montblanc | 15% | 17% | | GUESS | 10% | 11% | | Lacoste | 8% | 6% | | Donna Karan/DKNY | 6% | 6% | | Ferragamo | 3% | 4% | [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance across key metrics including net sales, gross profit, operating expenses, and net income for the interim periods - Overall net sales for the six months ended **June 30, 2025**, increased by **1%** (**2.5% organic**) compared to the prior year, despite a **2% reported and organic decline** in the second quarter[99](index=99&type=chunk) - Gross profit margin improved to **66.2% for Q2 2025** and **65.0% for H1 2025**, driven by favorable segment and brand mix and the discontinuation of lower-margin Dunhill products[105](index=105&type=chunk)[109](index=109&type=chunk) - Operating margins aggregated **17.7%** for the three months and **20.0%** for the six months ended **June 30, 2025**, compared to **18.9%** and **19.9%** for the corresponding prior year periods[117](index=117&type=chunk) [Net Sales](index=21&type=section&id=Net%20Sales) Examines net sales performance by European and United States based operations, highlighting growth drivers and new product launches Net Sales by Segment (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | European based product sales | $240.5 | $226.0 | 6.42% | $488.4 | $457.0 | 6.87% | | United States based product sales | $95.8 | $120.2 | (20.29)% | $190.1 | $216.0 | (12.00)% | | Total Net Sales | $333.9 | $342.2 | (2.42)% | $672.8 | $666.2 | 0.99% | - European based operations sales increased **6%** (**4% organic**) for **Q2 2025** and **7%** (**6% organic**) for **H1 2025**, driven by Lacoste (**+59% Q2**) and Coach (**+42% Q2**)[100](index=100&type=chunk) - United States based operations sales decreased **20% for Q2 2025** and **12% for H1 2025** (**6% organic decline for H1**), primarily due to the discontinuation of the Dunhill license, while Roberto Cavalli sales grew **23% (Q2)** and **25% (H1)**[101](index=101&type=chunk) - New product launches and brand extensions are planned for the remainder of **2025**, including Roberto Cavalli Serpentine, Lacoste Original flanker, and I Want Choo flanker[102](index=102&type=chunk) [Net Sales to Customers by Region](index=22&type=section&id=Net%20Sales%20to%20Customers%20by%20Region) Details net sales distribution across various geographic regions, noting increases in North America and Eastern Europe, and declines in Asia/Pacific and MEA Net Sales to Customers by Region (in millions) for Six Months Ended June 30 | Region | 2025 | 2024 | Change (%) | | :-------------------------- | :----- | :----- | :--------- | | North America | $245.4 | $229.7 | 6.83% | | Western Europe | $176.1 | $170.6 | 3.22% | | Asia/Pacific | $91.8 | $104.8 | (12.40)% | | Central and South America | $63.6 | $59.2 | 7.43% | | Middle East and Africa | $50.1 | $61.6 | (18.67)% | | Eastern Europe | $45.8 | $40.3 | 13.65% | - Asia/Pacific sales decreased by **12%** due to a higher base in Australia and distribution disruptions in South Korea, while Middle East and Africa sales declined **19%** (**6% excluding Dunhill impact**) due to regional conflicts and a shift to higher-end luxury fragrances[104](index=104&type=chunk) [Gross Profit Margin](index=22&type=section&id=Gross%20Profit%20Margin) Discusses the company's gross profit margin trends, attributing improvements to favorable segment and brand mix and product discontinuation Gross Profit Margin as a Percentage of Net Sales | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Company Gross Profit Margin | 66.2% | 64.5% | 65.0% | 63.5% | | European based operations | 68.3% | 68.8% | 66.9% | 66.3% | | United States based operations | 60.7% | 56.5% | 59.7% | 57.5% | - The increase in the company's overall gross profit margin was driven by **favorable segment and brand mix**, and for United States operations, by the **discontinuation of lower-margin Dunhill products**[105](index=105&type=chunk)[109](index=109&type=chunk) [Selling, general and administrative expenses](index=23&type=section&id=Selling%2C%20general%20and%20administrative%20expenses) Analyzes selling, general, and administrative expenses, including promotion and advertising, as a percentage of net sales and their drivers Selling, General and Administrative Expenses (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Company SG&A (% of net sales) | 48.5% | 45.6% | 6.36% | 45.0% | 43.6% | 3.21% | | European based operations SG&A | $115.9 | $108.1 | 7.22% | $211.9 | $198.5 | 6.75% | | United States based operations SG&A | $46.0 | $47.9 | (3.97)% | $90.9 | $91.9 | (1.09)% | | Promotion and advertising | $68.8 | $66.4 | 3.61% | $120.4 | $114.7 | 4.97% | - The increase in company-wide SG&A as a percentage of net sales was largely driven by **increased spending on promotional and advertising activities** and **increased employee-related costs**[111](index=111&type=chunk) - Promotion and advertising expenditures are anticipated to aggregate approximately **21% of net sales** on a full-year basis[113](index=113&type=chunk) [Royalty expense](index=24&type=section&id=Royalty%20expense) Reviews royalty expense trends, noting its increase as a percentage of net sales primarily due to unfavorable brand mix Royalty Expense (in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Royalty expense | $27.7 | $27.0 | 2.59% | $55.8 | $54.2 | 2.95% | | Royalty expense (% of net sales) | 8.3% | 7.9% | 5.06% | 8.3% | 8.1% | 2.47% | - The increase in royalty expense as a percentage of net sales was primarily driven by **unfavorable brand mix**[116](index=116&type=chunk) [Income from Operations](index=24&type=section&id=Income%20from%20Operations) Presents the company's operating margins for the three and six months ended June 30, 2025 and 2024 Operating Margins | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (pp) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (pp) | | :------------------- | :--------------------------- | :--------------------------- | :---------- | :--------------------------- | :--------------------------- | :---------- | | Operating margins | 17.7% | 18.9% | (1.2) | 20.0% | 19.9% | 0.1 | [Other Income and Expense](index=24&type=section&id=Other%20Income%20and%20Expense) Details the components of other income and expense, including foreign currency losses, marketable securities losses, and interest income - Overall other income and expense resulted in a **loss of $6.7 million** for the six months ended **June 30, 2025**, compared to a **loss of $1.5 million** in the prior year period[118](index=118&type=chunk) - Key drivers of the change include a **foreign currency loss of $2.4 million** (vs. gain of $0.3 million in prior year) and **marketable securities losses of $3.4 million** (vs. loss of $0.6 million in prior year) for **H1 2025**[118](index=118&type=chunk) - Interest income increased to **$2.6 million in H1 2025** from **$1.7 million in H1 2024**, while unrealized losses on marketable equity securities were **$1.1 million in Q2 2025** compared to unrealized gains of **$1.5 million in Q2 2024**[121](index=121&type=chunk) [Income Taxes](index=24&type=section&id=Income%20Taxes) Reports the consolidated effective tax rate and the effective tax rates for European and United States based operations - The consolidated effective tax rate was **24.3%** for the six months ended **June 30, 2025**, slightly up from **23.9%** in the prior year[122](index=122&type=chunk) - European based operations' effective tax rate was **25.4%** (up from 25.0%), while United States based operations' effective tax rate was **18.8%** (down from 19.9%) for **H1 2025**[122](index=122&type=chunk) [Net Income](index=25&type=section&id=Net%20Income) Provides net income attributable to Interparfums, Inc. and its segments, along with overall net profit margins Net Income by Segment (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Net income attributable to Interparfums, Inc. | $31,988 | $36,823 | (13.13)% | $74,480 | $77,871 | (4.35)% | | Net income attributable to European based operations | $32,745 | $33,187 | (1.33)% | $80,864 | $78,127 | 3.50% | | Net income attributable to United States based operations | $9,555 | $15,225 | (37.24)% | $18,223 | $24,752 | (26.37)% | - Net profit margins attributable to Interparfums, Inc. for the six months ended **June 30, 2025**, aggregated **11.1%**, down from **11.7%** in the prior year[127](index=127&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's financial liquidity, working capital, cash flow from operations, inventory levels, capital expenditures, and dividend policy - As of **June 30, 2025**, the company had **$205.4 million** in cash, cash equivalents, and short-term investments, with working capital aggregating **$654.0 million**[128](index=128&type=chunk)[129](index=129&type=chunk) - Cash provided by operating activities was **$4.5 million** for **H1 2025**, a significant improvement from cash used of **$26.5 million** in **H1 2024**[135](index=135&type=chunk) - Inventory levels increased **5%** from year-end **2024** in preparation for **H2 sales** and the holiday season, with finished goods comprising **65.0% of inventory**, up from **59.7%** at **June 30, 2024**[135](index=135&type=chunk) - Capital expenditures for **H1 2025** included **$19.7 million** for the Goutal Trademark purchase and **$15.3 million** for additional property in Paris[137](index=137&type=chunk) - The Board of Directors increased the annual dividend to **$3.20 per share** in **February 2025**, up from **$3.00 per share** in **February 2024**[140](index=140&type=chunk) - The company anticipates potential inflationary impacts in the **second half of 2025** due to potential increased costs from tariffs[142](index=142&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages financial exposures through derivative financial instruments, primarily foreign currency forward exchange contracts to mitigate foreign exchange risk and interest rate swaps to manage interest rate risk. - The company addresses financial exposures through a controlled program of risk management, primarily using **derivative financial instruments**[144](index=144&type=chunk) [Foreign Exchange Risk Management](index=27&type=section&id=Foreign%20Exchange%20Risk%20Management) Explains the company's strategy of using foreign currency forward exchange contracts to hedge foreign exchange exposure - Foreign currency forward exchange contracts are used to hedge exposure related to foreign currency receivables and future sales, aiming to minimize the effect of exchange rate movements on Interparfums SA's cash flows[145](index=145&type=chunk) - As of **June 30, 2025**, the company had foreign currency contracts with notional amounts of approximately **USD $111 million**, all with maturities of less than one year[148](index=148&type=chunk) [Interest Rate Risk Management](index=27&type=section&id=Interest%20Rate%20Risk%20Management) Describes the company's approach to mitigating interest rate risk through monitoring and potential interest rate swaps - The company mitigates interest rate risk by monitoring interest rates and determining whether fixed interest rates should be swapped for floating rate debt, or vice versa[149](index=149&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were evaluated, and while material weaknesses identified in the 2024 Annual Report are being remediated, they are not yet considered fully remediated. No significant changes in internal control over financial reporting occurred during the quarter, except as described. [Evaluation of Disclosure Controls and Procedures](index=27&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Refers to the 2024 Annual Report for details on disclosure controls evaluation and remediation of identified material weaknesses - The company refers to its **2024 Annual Report on Form 10-K** for details on the evaluation of disclosure controls and procedures and the remediation plan[150](index=150&type=chunk) - Material weaknesses will not be considered remediated until controls operate for a sufficient period and management concludes they are operating effectively through testing[150](index=150&type=chunk) [Changes in Internal Control Over Financial Reporting](index=27&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) States that no significant changes in internal control over financial reporting occurred during the quarter, except as part of the remediation plan - No significant changes in internal control over financial reporting occurred during the quarterly period covered by this report that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting, except as described in the remediation plan[151](index=151&type=chunk) [Part II. Other Information](index=28&type=section&id=Part%20II.%20Other%20Information) Provides additional information including risk factors, equity sales, other disclosures, and a list of exhibits filed with the report [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) Information regarding the company's risk factors is incorporated by reference from its 2024 Annual Report on Form 10-K. - Information regarding the company's Risk Factors can be found in its **2024 Annual Report on Form 10-K** filed with the SEC[153](index=153&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The Board of Directors authorized the repurchase of up to 260,000 shares in 2025, with 20,000 shares purchased in April 2025. - In **February 2025**, the Board of Directors authorized the company to continue repurchasing up to **130,000 shares** throughout **2025**, which was increased to **260,000 shares** in **April 2025**[154](index=154&type=chunk) Common Stock Repurchase Activity (April 1 - June 30, 2025) | Period | Total Number of Shares Purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | | :------- | :----------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | April 1-30 | 20,000 | $102.15 | 20,000 | 240,000 | | May 1-31 | 0 | n/a | 20,000 | 240,000 | | June 1-30 | 0 | n/a | 20,000 | 240,000 | | Total | 20,000 | $102.15 | 20,000 | 240,000 | [Item 5. Other Information](index=28&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025. - During the **second quarter of 2025**, no director or officer adopted or terminated any 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement'[156](index=156&type=chunk) [Item 6. Exhibits.](index=29&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, as well as interactive data files. - Exhibits filed include certifications required by **Rule 13a-14(a)** and **Section 906 of the Sarbanes-Oxley Act** from the Chief Executive Officer and Chief Financial Officer, along with interactive data files[158](index=158&type=chunk) [SIGNATURES](index=30&type=section&id=SIGNATURES) Confirms the official signing of the report by the Chief Financial Officer on behalf of Interparfums, Inc. - The report was signed on behalf of Interparfums, Inc. by **Michel Atwood, Chief Financial Officer**, on **August 5, 2025**[160](index=160&type=chunk)[161](index=161&type=chunk)

Core Insights - Interparfums, Inc. reaffirms its 2025 sales and earnings guidance despite facing challenges in the second quarter of 2025 [1][14] Financial Performance - For the second quarter of 2025, net sales were $334 million, a decrease of 2% compared to $342 million in the same period of 2024. For the first half of 2025, net sales increased by 1% to $673 million from $666 million in 2024 [2] - Gross margin improved to 66.2% in the second quarter, up 170 basis points from 64.5% in 2024, and to 65.0% for the first half, an increase of 150 basis points from 63.5% [2][8] - Operating income decreased by 9% to $59 million in the second quarter, while it remained stable at $134 million for the first half [2] - Net income attributable to Interparfums, Inc. was $32 million in the second quarter, down 13% from $37 million in 2024, and $74 million for the first half, a decrease of 4% from $78 million [2][12] Market Commentary - The U.S. market accounted for 35% of net sales in the second quarter, showing strong demand despite a general easing in global fragrance market growth [3] - North America and Western Europe saw sales growth of 7% and 3% year-to-date, respectively, while Asia-Pacific sales declined by 12% due to previous exceptional sales and distribution issues [4] - Central & South America sales increased by 7%, driven by strong performance from Lacoste fragrances, and Eastern Europe sales rose by 14% [5] Strategic Developments - Interparfums signed an exclusive global license agreement with Longchamp, marking the addition of its third new brand since December 2024, following Off-White and Goutal [6] - The company is preparing to launch its first owned brand fragrance collection, Solférino, with a flagship boutique opening in Paris [6] Financial Outlook - The company anticipates that challenges from trade destocking and macroeconomic uncertainties will persist but remains optimistic about achieving its full-year objectives of $1.51 billion in net sales and earnings per diluted share of $5.35 [13][14] - A quarterly cash dividend of $0.80 per share is scheduled for payment on September 30, 2025 [14]