Inter Parfums, Inc. Q2 FY2025 earnings call

• Began the year strong but with slower pace and challenges; price increases, sourcing shifts, product innovation, and advertising programs helped maintain demand.
• European-based brands launching new editions like Jimmy Choo's I Want Choo with Love, Montblanc Explorer Extreme, etc. US-based operations set to introduce new scents and exclusive license for Longchamp.
• Strong momentum in e-commerce channels (Amazon, Divabox, TikTok Shop); developing e-commerce specific programs. Transitioning out of Dayton, New Jersey facility, targeting full relocation by end of Q3.
• Tariff agreements providing clarity on global trade environment; shifting sourcing and manufacturing closer to end markets.

European-based operations: Reported net sales grew 6% in Q2 and 7% in first half of 2025. US-based operations: Reported second quarter net sales down 20%, with 8% due to sell-out of remaining Dunhill inventory; on an organic basis, US operations sales down 14% in Q2 and 6% in first half. North America sales rose 7%, Western Europe 3%, Central and South America 7%, Eastern Europe 14%, Asia Pacific down 12%, Middle East and Africa down 19% (excluding Dunhill, down 6%).

• Reaffirmed 2025 guidance: net sales of $1.51 billion and earnings per diluted share of $5.35.
• Believes continued resilience of fragrance category, tariff-driven pricing, and foreign exchange tailwinds will support meeting goals.

• Industry slowdown continuing into second half of 2025 may impact sales.
• Tariffs initially posing challenges, though recent agreements provide some clarity but still a factor.
• Potential impact of destocking and retailers being prudent in purchasing affecting short-term sales.

Q: Talk about promotional levels, destocking, and end demand.

A: Michel noted end demand was good, market up 5% in Q2 for top 7 markets, Interparfums grew share; Jean mentioned gaps between sell-in and sell-out are usual due to lack of visibility, but end demand is strong.

Q: Follow-up on tariff-related impact to Q2.

A: Jean said retailers not subject to tariffs, but distributors affected by uncertain times; Michel said people being more prudent.

Q: Future of adding brands.

A: Jean said they always look to diversify portfolio, added Longchamp is a good complement, can take more brands but will edit over time.

Q: Risk of revenue pushed into Q4.

A: Michel said there's pent-up demand, and impact of pricing to offset tariffs may affect retailers' purchasing; Jean said need to be agile for potential late orders.

Q: Amazon, TikTok, manufacturing for smaller quantities.

A: Jean said creating special programs for TikTok with smaller sizes, Amazon business growing, Divabox helpful for learning.

Q: Reason for debt increase.

A: Michel said took out loan to fund purchases and buy assets like Goutal and Extra Space.