Inter Parfums, Inc. Q4 FY2025 earnings call

• 2025 was a record year for Interparfums with sales at $1.49 billion, including best-ever fourth quarter sales of $386 million. - Energized portfolio through launch of blockbuster fragrances and new line extensions. - Generated growth in majority of markets, improved efficiencies, optimized supply chain. - Strengthened marketing efforts with impactful advertising. - Announced new partnerships and license extensions, including with David Beckham, Nautica, and extended GUESS license. - E-commerce running strong with expanded presence on Amazon and TikTok Shop. - Travel retail market performed well with 6% growth in 2025. - Made progress in tariff mitigation, inventory management, and operating efficiencies.

Consolidated 2025 fourth quarter sales rose 7% on a reported basis and 3% on an organic basis. U.S. operations: fourth quarter sales increased 4%, with GUESS and Donna Karan/DKNY driving growth; full year sales declined 3% excluding Dunhill phaseout. European Based Operations: fourth quarter sales increased 9%, with 4% organic growth and 4% favorable FX; full year sales rose 7% on a reported basis and 4% organically. Coach, Lacoste, and Montblanc led in European operations, while Jimmy Choo, Coach, and Lacoste showed strong performances in their respective segments.

• Maintaining the outlook provided in November, expecting sales to remain steady at approximately $1.48 billion and diluted earnings per share of $4.85. - Anticipating a return to significantly stronger growth in 2027 driven by enhanced innovation across key brands. - Cautious about updating guidance further in 2026 due to volatile environment and slowdown in market growth.

• Tariffs and exchange rate pressures influencing the environment. - Geopolitical conflicts affecting certain key markets. - Dynamic tariff situation with Supreme Court ruling having uncertain long-term impact. - Moderating demand in some international markets. - Volatile market growth and slowdown in market growth affecting sales and margins.

Q: In terms of revisiting guidance later in the year, what are specific metrics to look for and what's the swing factor?

A: Waiting to see how market growth, destocking situation, and innovation pipeline play out; market growth slowdown and innovation pipeline are swing factors.

Q: On promotions, what's been seen?

A: Slight uptick in promotions in fourth quarter, more friends and family discounts but nothing significant.

Q: After new brands, capacity to secure additional licenses and preference?

A: Have capacity, will continue to work on more brands, prefer to add brands that fit portfolio and can benefit from expertise.

Q: On flanker pipeline, which brands to gain share and cautious ones?

A: GUESS, Lacoste, Cavalli expected to outperform; Montblanc, Jimmy Choo, Coach moderate growth; tail end of portfolio may be stable or decline.

Q: On gross margin, what happened in Q4 and cadence for 2026?

A: Q4 gross margin erosion due to tariff impact, foreign exchange, and channel mix; expect first half hurt and second half improvement to reach flat gross margin.

Q: Any other brands to breakout to top 5?

A: No breakout expected this year; top 5 are larger brands, new brands have potential but not expected to breakout this year.

Q: Trends in key regions in 2026?

A: U.S. doing well, Southern Europe fine, Northern Europe difficult, Eastern Europe okay; Asia (China slow), Australia showing strong growth; LatAm doing well.