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].

Core Insights - Interparfums, Inc. reported a 5% increase in net sales for Q1 2025, reaching $339 million compared to $324 million in Q1 2024, reaffirming its sales and earnings guidance for 2025 [1][2][15] Financial Performance - Net sales for Q1 2025 were $339 million, a 5% increase from $324 million in Q1 2024 [2] - Gross margin improved to 63.7% from 62.5%, reflecting a 120 basis point increase [2][8] - Operating income rose by 10% to $75 million, with an operating margin of 22.2%, up from 21.0% [2][12] - Net income attributable to Interparfums, Inc. was $42 million, a 4% increase from $41 million in the previous year [2][28] - Diluted earnings per share (EPS) increased by 4% to $1.32 from $1.27 [2][28] Market Performance - Organic sales growth, excluding foreign exchange impacts and the Dunhill license discontinuation, was 7% [4] - North America and Western Europe saw sales increases of 14% and 1%, respectively, while Eastern Europe experienced a significant rebound with a 46% increase [5] - Asia/Pacific sales declined by 3%, and Central and South America saw a 10% decline, attributed to high prior year bases [5] Strategic Initiatives - The company renewed its partnership with Coach for an additional five years, extending the license until June 30, 2031 [6] - Interparfums is expanding its portfolio with the launch of the Solférino collection and acquisitions of Off-White and Annick Goutal, set for commercialization in 2026 [7] Financial Position - As of March 31, 2025, the company had $172 million in cash and cash equivalents, with working capital of $605 million [13] - SG&A expenses as a percentage of net sales were 41.6%, reflecting a slight increase due to higher advertising and promotional spending [9][11] - The company invested $52 million in A&P initiatives, representing 15.2% of net sales, a 7% increase from the prior year [11] Guidance - Interparfums reaffirms its 2025 guidance of net sales of $1.51 billion and earnings per diluted share of $5.35, both reflecting a 4% increase [15]