Core Viewpoint - Interparfums, Inc. reported a record third quarter with consolidated sales growth of 1% for both the third quarter and year-to-date periods, driven by consumer interest in prestige and luxury fragrances despite a more selective spending environment [4]. Financial Performance - **Net Sales**: - Total net sales for the three months ended September 30, 2025, were $430 million, a 1% increase from $425 million in 2024. For the nine months ended September 30, 2025, net sales were $1,102 million, also a 1% increase from $1,091 million in 2024 [2]. - **European Operations**: - European based net sales rose 5% to $295 million for the third quarter, and 6% to $784 million for the nine months, supported by strong performance from the Jimmy Choo brand [2][5]. - **United States Operations**: - United States based net sales decreased by 6% to $137 million for the third quarter and by 10% to $327 million for the nine months, with organic net sales down 6% year-to-date, excluding the impact of the discontinued Dunhill license [2][8]. Market Dynamics - **Exchange Rate Impact**: - The average dollar/euro exchange rate for the third quarter of 2025 was 1.17, compared to 1.10 in the same period of 2024, resulting in a positive 2% foreign exchange impact [3]. - **Brand Performance**: - The Jimmy Choo brand grew 16% in the third quarter, while Lacoste fragrances are on track to achieve $100 million in sales this year [5]. - Coach brand sales increased by 6% for the quarter and 18% year-to-date, while Roberto Cavalli fragrance sales rose 44% in the quarter [6][11]. - Donna Karan/DKNY saw a decline of 14% in the third quarter, attributed to high growth levels in the previous year [10]. Management Insights - Management expressed optimism about the resilience of the overall market and the company's innovation and portfolio evolution, despite macroeconomic headwinds [4][12]. - The company is focusing on long-term strategies, innovative product development, and high service levels to expand market share as the industry evolves [12].

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. (IPAR) reported a strong sales performance for Q1 2025, achieving a 5% increase in net sales to $339 million, with a 7% organic growth driven by brand demand and innovations [2][12] - The company reaffirmed its 2025 guidance, projecting net sales of $1.51 billion and earnings per share of $5.35, both reflecting a 4% year-over-year increase [12] Sales Performance - The Europe-based net sales reached $248 million, marking a 7% increase year-over-year, with significant contributions from brands like Jimmy Choo (36% growth), Coach (11% growth), and Lacoste (30% growth) [3][4] - In the U.S., net sales were $94 million, showing a 1% decline year-over-year, although organic sales increased by 3% [7] Brand Contributions - Jimmy Choo's growth was attributed to strong demand for its I Want Choo and Jimmy Choo Man lines [4] - Coach benefited from the successful launch of Coach Man Extreme and sustained demand for its core products [4] - Lacoste continued to perform well in its second year under Interparfums' management [4] - Donna Karan/DKNY fragrances saw a 5% sales increase, while MCM grew by 17% due to the Park Collection rollout [8] Market Challenges and Strategies - The company is navigating global market complexities, including new tariffs, and is making strategic supply chain adjustments [10] - Interparfums plans to implement selective price increases across certain fragrance lines starting August 2025 to address rising costs [11]