What changed in this filing

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Item 1A. Risk Factors

2021-03-01 compared with 2020-03-02 · 262 added, 231 removed, 158 unchanged (76% of the section changed)

Risk Factors.

should carefully consider these risk factors before you decide to purchase or sell shares of our common stock.

These factors could

cause our future results to differ materially from those expressed or implied in forward-looking statements made by us.

price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

should carefully consider these material risk factors before you decide to purchase or sell shares of our common stock.

factors could cause our future results to differ materially from those expressed or implied in forward-looking statements made

The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

Business, Brand Names and Intellectual Property

are dependent upon the continuation and renewal of various licenses and other agreements for a significant portion of our sales,

10 unchanged sentences

on less favorable terms may also negatively impact us.

business could be adversely affected by a prolonged downturn or recession in the United States, Europe, China or other countries

in which we conduct business.

prolonged economic downturn or recession in the United States, Europe, China or any of the other countries in which we do significant

business could materially and adversely affect our business, financial condition and results of operations.

In particular, such

a downturn or recession could adversely impact (i) the level of spending by our ultimate consumers, (ii) our ability

to collect accounts receivable on a timely basis from certain customers, (iii) our ability of certain suppliers to fill our

orders for raw materials, packaging or co-packed finished goods on a timely basis, and (iv) the mix of our product sales.

may reduce discretionary purchases of our products as a result of a general economic downturn.

believe that a high degree of global economic uncertainty could have a negative effect on consumer confidence, demand and spending.

addition, we believe that consumer spending on beauty products is influenced by general economic conditions and the availability

of discretionary income.

Accordingly, we may experience sustained periods of declines in sales during periods of economic downturn

as it may affect consumer purchasing patterns.

In addition, a general economic downturn may result in reduced traffic in our customers’

stores which may, in turn, result in reduced net sales to our retail store customers.

Any resulting material reduction in our

sales could have a material adverse effect on our business, financial condition and operating results.

Uncertainties

and deterioration in global credit markets, as evidenced by previous reductions in sovereign credit ratings in the United States

and Europe, could negatively impact suppliers, customers and consumers, which could have an adverse impact on our business as

Uncertainties

and deterioration in the global credit markets as evidenced by previous reductions in sovereign credit ratings in the United States

and Europe, could negatively impact our suppliers, customers and consumers which, in turn, could have an adverse impact on our

While thus far, uncertainties in global credit markets have not significantly affected our access to credit due to our

strong credit rating, a further deterioration in global financial markets could make future financing difficult or more expensive.

Such lack of credit or lack of credit on favorable terms could have a material adverse effect on our business, financial condition

and operating results.

An outbreak of disease, epidemic or pandemic, or similar

public health threat, such as the coronavirus, could have a material adverse impact on the Company’s business, operating

results and financial condition.

An outbreak of disease, epidemic or pandemic, or similar public

threat, or fear of such an event, that negatively impacts consumer spending on or our products could have a material adverse impact

on the Company’s business, financial condition and operating results.

Like most companies doing business around the globe,

ours is being impacted by the coronavirus.

There are many unknowns as to the duration and severity of the situation which we are

closely monitoring.

As a result of the trends in 2020 we have seen, there has been a significant decline in air travel and consumer

traffic in key shopping and tourist areas.

The extent and potential short and long term impact of the coronavirus on the Company’s

operational and financial performance will depend on future developments, including the duration and spread of the outbreak, our

customers’

willingness to travel and purchase our products, and the impact on our supply chain and the financial markets,

all of which are highly uncertain and cannot be predicted.

our intangible assets, such as trademarks and licenses, become impaired, we may be required to record a significant non-cash charge

to earnings which would negatively impact our results of operations.

United States generally accepted accounting principles, we review our intangible assets, including our trademarks and licenses,

for impairment annually in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate

the carrying value of our intangible assets may not be fully recoverable.

The carrying value of our intangible assets may not

be recoverable due to factors such as reduced estimates of future cash flows, including those associated with the specific brands

to which intangibles relate, or slower growth rates in our industry.

Estimates of future cash flows are based on a long-term financial

outlook of our operations and the specific brands to which the intangible assets relate.

However, actual performance in the near-term

or long-term could be materially different from these forecasts, which could impact future estimates and the recorded value of

the intangibles.

Any significant impairment to our intangible assets would result in a significant charge to earnings in our financial

statements during the period in which the impairment is determined to exist.

we are unable to protect our intellectual property rights, specifically trademarks and brand names, our ability to compete could

be negatively impacted.

market for our products depends to a significant extent upon the value associated with trademarks and brand names that we license,

We have licenses or other rights to use, or own the material trademark and brand name rights in connection with the

packaging, marketing and distribution of our major products both in the United States and in other countries where such products

are principally sold.

Therefore, trademark and brand name protection is important to our business.

Although most of the brand

names we license, use or own are registered in the United States and in certain foreign countries in which we operate, we may

not be successful in asserting trademark or brand name protection.

In addition, the laws of certain foreign countries may not

protect our intellectual property rights to the same extent as the laws of the United States.

The costs required to protect our

trademarks and brand names may be substantial.

illegal distribution and sale by third parties of counterfeit versions of the Company’s products or the unauthorized diversion

by third parties of the Company’s products could have an adverse effect on the Company’s revenues and a negative impact

on the Company’s reputation and business.

parties may illegally distribute and sell counterfeit versions of the Company’s products.

These counterfeit products may

be inferior in terms of quality and other characteristics compared to the Company’s authentic products and/or the counterfeit

products could pose safety risks that the Company’s authentic products would not otherwise present to consumers.

could confuse counterfeit products with the Company’s authentic products, which could damage or diminish the image, reputation

and/or value of the Company’s brands and cause consumers to refrain from purchasing the Company’s products in the

In addition, the sale of the Company’s prestige products through non-authorized “grey market”

could damage or diminish the image, reputation and/or value of the Company’s brands and could adversely affect the Company’s

revenues and have a negative impact on the Company’s reputation.

success depends on our ability to operate our business without infringing, misappropriating or otherwise violating the trademarks,

patents, copyrights and proprietary rights of other parties.

commercial success depends at least in part on our ability to operate without infringing, misappropriating or otherwise violating

the trademarks, patents, copyrights and other proprietary rights of others.

However, we cannot be certain that the conduct of

our business does not and will not infringe, misappropriate or otherwise violate such rights.

Many companies have employed intellectual

property litigation as a way to gain a competitive advantage, and to the extent we gain greater visibility and market exposure,

we may also face a greater risk of being the subject of such litigation.

For these and other reasons, third parties may allege

that our products, services or activities infringe, misappropriate or otherwise violate their trademark, patent, copyright or

other proprietary rights.

Defending against allegations and litigation could be expensive, take significant time, divert management’s

attention from other business concerns, and delay getting our products to market.

In addition, if we are found to be infringing,

misappropriating or otherwise violating third party trademark, patent, copyright or other proprietary rights, we may need to obtain

a license, which may not be available on commercially reasonable terms or at all, or redesign or rebrand our products, which may

not be possible.

We may also be required to pay substantial damages or be subject to a court order prohibiting us and our customers

from selling certain products or engaging in certain activities.

Our inability to operate our business without infringing, misappropriating

or otherwise violating the trademarks, patents, copyrights and proprietary rights of others could therefore have a material adverse

effect on our business, financial condition and results of operations.

success of our products is dependent on public taste.

revenues are substantially dependent on the success of our products, which depends upon, among other matters, pronounced and rapidly

changing public tastes, factors which are difficult to predict and over which we have little, if any, control.

In addition, we

have to develop successful marketing, promotional and sales programs in order to sell our fragrances and fragrance related products.

If we are not able to develop successful marketing, promotional and sales programs, then such failure will have a material adverse

effect on our business, financial condition and operating results.

are subject to extreme competition in the fragrance industry.

market for fragrance products is highly competitive and sensitive to changing market preferences and demands.

Many of our competitors

in this market are larger than we are and have greater financial resources than are available to us, potentially allowing them

greater operational flexibility.

Our success in the prestige fragrance industry is dependent upon our ability to continue to generate

original strategies and develop quality products that are in accord with ongoing changes in the market.

there is insufficient demand for our existing fragrance products, or if we do not develop future strategies and products that

withstand competition or we are unsuccessful in competing on price terms, then we could experience a material adverse effect on

our business, financial condition and operating results.

we are unable to acquire or license additional brands, or obtain the required financing for these agreements and arrangements,

19 unchanged sentences

costs on us, including:

● difficulties

in assimilating acquired operations or products, including the loss of key employees from acquired businesses

of management’s attention from our core business

effects on existing business relationships with suppliers and customers

22 unchanged sentences

on favorable terms, or that we will realize the anticipated benefits of entering into any such alliances or arrangements.

are dependent upon Messrs.

Jean Madar and Philippe Benacin, and the loss of their services could harm our business.

Madar, our Chief Executive Officer, and Philippe Benacin, our President and Chief Executive Officer of Interparfums SA, are responsible

for day-to-day operations as well as major decisions.

Termination of their relationships with us, whether through death, incapacity

or otherwise, could have a material adverse effect on our operations, and we cannot assure you that qualified replacements can

reliance on third party manufacturers could have a material adverse effect on us.

rely on outside sources to manufacture our fragrances and cosmetics.

The failure of such third party manufacturers to deliver

either compliant, quality components or finished goods on a timely basis could have a material adverse effect on our business.

Although we believe there are alternate manufacturers available to supply our requirements, we cannot assure you that current

or alternative sources will be able to supply all of our demands on a timely basis.

We do not intend to develop our own manufacturing

As these are third parties over whom we have little or no control, the failure of such third parties to provide components

or finished goods on a timely basis could have a material adverse effect on our business, financial condition and operating results.

reliance on third party distributors could have a material adverse effect on us.

sell a substantial percentage of our prestige fragrances through independent distributors specializing in luxury goods.

the growing importance of distribution, we have modified our distribution model by owning a controlling interest in certain of

our distributors within key markets.

However, we have little or no control over third party distributors and the failure of such

third parties to provide services on a timely basis could have a material adverse effect on our business, financial condition

we are unable to protect our intellectual property rights, specifically trademarks and brand names, our ability to compete could

be negatively impacted.

market for our products depends to a significant extent upon the value associated with trademarks and brand names that we license,

We have licenses or other rights to use, or own the material trademark and brand name rights in connection with the

packaging, marketing and distribution of our major products both in the United States and in other countries where such products

are principally sold.

Therefore, trademark and brand name protection are important to our business.

Although most of the brand

names we license, use or own are registered in the United States and in certain foreign countries in which we operate, we may

not be successful in asserting trademark or brand name protection.

In addition, the laws of certain foreign countries may not

protect our intellectual property rights to the same extent as the laws of the United States.

The costs required to protect our

trademarks and brand names may be substantial.

our intangible assets, such as trademarks and licenses, become impaired, we may be required to record a significant non-cash charge

to earnings which would negatively impact our results of operations.

United States generally accepted accounting principles, we review our intangible assets, including our trademarks and licenses,

for impairment annually in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate

the carrying value of our intangible assets may not be fully recoverable.

The carrying value of our intangible assets may not

be recoverable due to factors such as reduced estimates of future cash flows, including those associated with the specific brands

to which intangibles relate, or slower growth rates in our industry.

Estimates of future cash flows are based on a long-term financial

outlook of our operations and the specific brands to which the intangible assets relate.

However, actual performance in the near-term

or long-term could be materially different from these forecasts, which could impact future estimates and the recorded value of

the intangibles.

Any significant impairment to our intangible assets would result in a significant charge to earnings in our financial

statements during the period in which the impairment is determined to exist.

illegal distribution and sale by third parties of counterfeit versions of the Company’s products or the unauthorized diversion

by third parties of the Company’s products could have an adverse effect on the Company’s revenues and a negative impact

on the Company’s reputation and business.

parties may illegally distribute and sell counterfeit versions of the Company’s products.

These counterfeit products may

be inferior in terms of quality and other characteristics compared to the Company’s authentic products and/or the counterfeit

products could pose safety risks that the Company’s authentic products would not otherwise present to consumers.

could confuse counterfeit products with the Company’s authentic products, which could damage or diminish the image, reputation

and/or value of the Company’s brands and cause consumers to refrain from purchasing the Company’s products in the

In addition, the sale of the Company’s prestige products through non-authorized “grey market” channels

could damage or diminish the image, reputation and/or value of the Company’s brands and could adversely affect the Company’s

revenues and have a negative impact on the Company’s reputation.

success depends on our ability to operate our business without infringing, misappropriating or otherwise violating the trademarks,

patents, copyrights and proprietary rights of other parties.

commercial success depends at least in part on our ability to operate without infringing, misappropriating or otherwise violating

the trademarks, patents, copyrights and other proprietary rights of others.

However, we cannot be certain that the conduct of

our business does not and will not infringe, misappropriate or otherwise violate such rights.

Many companies have employed intellectual

property litigation as a way to gain a competitive advantage, and to the extent we gain greater visibility and market exposure,

we may also face a greater risk of being the subject of such litigation.

For these and other reasons, third parties may allege

that our products, services or activities infringe, misappropriate or otherwise violate their trademark, patent, copyright or

other proprietary rights.

Defending against allegations and litigation could be expensive, take significant time, divert management’s

attention from other business concerns, and delay getting our products to market.

In addition, if we are found to be infringing,

misappropriating or otherwise violating third party trademark, patent, copyright or other proprietary rights, we may need to obtain

a license, which may not be available on commercially reasonable terms or at all, or redesign or rebrand our products, which may

not be possible.

We may also be required to pay substantial damages or be subject to a court order prohibiting us and our customers

from selling certain products or engaging in certain activities.

Our inability to operate our business without infringing, misappropriating

or otherwise violating the trademarks, patents, copyrights and proprietary rights of others could therefore have a material adverse

effect on our business, financial condition and results of operations.

Pandemic and Economic Downturn

COVID-19 pandemic has had, and we expect will continue to have a material adverse effect on our business, results of operations,

financial condition and cash flows.

public health crisis caused by the COVID-19 pandemic and the measures being taken by governments, businesses, including us,

our suppliers, our distributors, retailers and the public, to limit COVID-19’s spread, have had and we expect will

continue to have, certain negative impacts on our business including, but not limited to, the following:

have experienced an overall decrease in sales of our products in markets around the world that have been affected by the COVID-19

In particular, sales of our products have been significantly negatively affected by shelter-in-place regulations

and closings of retailers around the world.

We believe the most significant impact occurred in the second quarter of 2020.

Although we experienced sales increases in the third and fourth quarter as compared to the second quarter of 2020, estimates

of future sales, even in the short term are difficult to determine.

In addition, there have been recent increases in COVID-19

cases in the United States and Europe, which have resulted in certain governments once again tightening restrictions.

COVID-19 pandemic further intensifies, its negative impacts on our sales could be more prolonged and may become more severe.

Deteriorating

economic and political conditions in many of our major markets affected by the COVID-19 pandemic, such as increased unemployment,

decreases in disposable income, declines in consumer confidence, or economic slowdowns could cause a further decrease in demand

for our products.

may be required to record significant impairment charges with respect to noncurrent assets, including trademarks, licenses

and other intangible assets whose fair values may be negatively affected by the effects of the COVID-19 pandemic on our operations.

a result of the COVID-19 pandemic, in all jurisdictions in which we operate we are following guidance as well as requirements

from authorities and health officials in allowing our teams to gradually return to our offices, including, requiring personnel

to wear masks and other protective clothing as appropriate, and implementing additional cleaning and sanitization routines

at our offices and distribution centers.

However, we may experience reductions in productivity and disruptions to our business

routines while such guidance and restrictions remain in place.

we have taken or may take, or decisions on potential actions that we did not take, as a consequence of the COVID-19 pandemic

may result in claims or litigation against us.

resumption of normal business operations after the disruptions caused by the COVID-19 pandemic may be delayed or constrained

by its lingering effects on consumers, suppliers or third-party distributors.

may reduce discretionary purchases of our products as a result of a general economic downturn.

believe that a high degree of global economic uncertainty could have a further negative effect on consumer confidence, demand

and spending.

In addition, we believe that consumer spending on beauty products is influenced by general economic conditions

and the availability of discretionary income.

Accordingly, we may experience sustained periods of declines in sales during periods

of economic downturn as it may affect consumer purchasing patterns.

In addition, a further general economic downturn may result

in further reduced traffic in our customers’ stores which may, in turn, result in reduced net sales to our retail store

Any further material reduction in our sales could have a material adverse effect on our business, financial condition

and operating results.

In addition, if we replace existing third party distributors with new third party distributors or with

our own distribution arrangements, then transition issues could have a material adverse effect on our business, financial condition

outbreak of any other disease, epidemic or pandemic, or similar public health threat on the scope of COVID-19, could have a material

adverse impact on the Company’s business, operating results and financial condition.

outbreak of disease, epidemic or pandemic, or similar public threat on the scope of COVID-19, or fear of such an event, that negatively

impacts consumer spending on our products could have a material adverse impact on the Company’s business, financial condition

and operating results.

Like most companies doing business around the globe, ours is being impacted by the coronavirus.

many unknowns as to the duration and severity of the situation which we are closely monitoring.

As a result of the trends in 2020

we have seen, there has been a significant decline in air travel and consumer traffic in key shopping and tourist areas.

and potential short and long-term impact of the coronavirus on the Company’s operational and financial performance will

depend on future developments, including the duration and spread of the outbreak, our customers’ willingness to travel and

purchase our products, and the impact on our supply chain and the financial markets, all of which are highly uncertain and cannot

be predicted.

are subject to risks related to our foreign operations, and a disruption in our operations or supply chain could adversely affect

our business and financial results.

operate on a global basis, with a substantial portion of our net sales and net income generated outside the United States, and

we anticipate for the foreseeable future that a substantial portion of our net sales and net income will be generated outside

the United States.

A substantial portion of our cash, cash equivalents and short-term investments that result from these earnings

remain outside the United States.

As a company engaged in manufacturing and distribution on a global scale, we are subject to

many risks and uncertainties, including:

in foreign laws, regulations and policies, including restrictions on trade, import and export license requirements, and tariffs

and taxes, as well as changes in United States laws and regulations relating to foreign trade and investment;

accidents, environmental events, strikes and other labor disputes, disruptions in supply chain or information technology,

loss or impairment of key manufacturing sites or suppliers, product quality control, safety, as well as natural disasters,

adverse weather conditions, social, economic and geopolitical conditions, such as terrorist attacks, war or other military

action and other external factors over which we have no control.

risks could have a material adverse effect on our business, prospects, results of operations and financial condition.

Uncertainties

and deterioration in global credit markets, as evidenced by previous reductions in sovereign credit ratings in the United States

and Europe, could negatively impact suppliers, customers and consumers, which could have an adverse impact on our business as

Uncertainties

and deterioration in the global credit markets as evidenced by previous reductions in sovereign credit ratings in the United States

and Europe, could negatively impact our suppliers, customers and consumers which, in turn, could have an adverse impact on our

While thus far, uncertainties in global credit markets have not significantly affected our access to credit due to our

strong credit rating, a further deterioration in global financial markets could make future financing difficult or more expensive.

Such lack of credit or lack of credit on favorable terms could have a material adverse effect on our business, financial condition

and operating results.

attacks, acts of war or military actions, other civil unrest or natural disasters may adversely affect territories in which we

18 unchanged sentences

could have a material adverse effect on our business, financial condition and operating results.

in laws, regulations and policies that affect our business could adversely affect our financial results.

business is subject to numerous laws, regulations and policies.

Changes in the laws, regulations and policies, including

the interpretation or enforcement thereof, that affect, or will affect, our business, including changes in accounting standards,

tax laws and regulations, environmental or climate change laws, regulations or accords, trade rules and customs regulations,

or increased cosmetics regulation, and the outcome and expense of legal or regulatory proceedings, and any action we may take

as a result could adversely affect our financial results.

success depends, in part, on the quality and safety of our products.

If our products are found to be defective or unsafe,

or if they otherwise fail to meet our consumers’

standards, then our relationships with customers or consumers could suffer,

the appeal of one or more of our brands could be diminished, and we could lose sales and/or become subject to liability claims,

any of which could result in a material adverse effect on our business, results of operations and financial condition.

are subject to risks related to our foreign operations, and a disruption in our operations or supply chain could adversely affect

our business and financial results.

operate on a global basis, with a substantial portion of our net sales and net income generated outside the United States, and

we anticipate for the foreseeable future that a substantial portion of our net sales and net income will be generated outside

the United States.

A substantial portion of our cash, cash equivalents and short-term investments that result from these earnings

remain outside the United States.

As a company engaged in manufacturing and distribution on a global scale, we are subject to

many risks and uncertainties, including:

in foreign laws, regulations and policies, including restrictions on trade, import and export license requirements, and tariffs

and taxes, as well as changes in United States laws and regulations relating to foreign trade and investment;

accidents, environmental events, strikes and other labor disputes, disruptions in supply chain or information technology, loss

or impairment of key manufacturing sites or suppliers, product quality control, safety, as well as natural disasters, adverse

weather conditions, social, economic and geopolitical conditions, such as terrorist attacks, war or other military action and

other external factors over which we have no control.

risks could have a material adverse effect on our business, prospects, results of operations and financial condition.

political conditions could adversely impact our business and financial results.

in the political conditions in markets in which we manufacture, sell or distribute our products may be difficult to predict and

may adversely affect our business and financial results.

For example, the United Kingdom’s recent withdrawal from the European

Union (“Brexit”) has created uncertainty regarding, among other things, the U.K.’s future legal and economic framework

and how the U.K.

will interact with other countries, including with respect to the free movement of goods, services, capital and

In addition, results of elections, referendums or other political processes in certain markets in which our products are

manufactured, sold or distributed could create uncertainty regarding how existing governmental policies, laws and regulations

may change, including with respect to sanctions, taxes, the movement of goods, services, capital and people between countries

and other matters.

The potential implications of such uncertainty, which include, among others, exchange rate fluctuations, tariffs,

trade barriers and market contraction, could adversely affect the Company’s business and financial results.

in foreign tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our profitability

15 unchanged sentences

trade tariffs, barriers and other restrictions.

substantial portion of our European operations’

net sales (over 45%) are sold in U.S.

substantial portion of our European operations’ net sales (over 45%) are sold in U.S.

In an effort to reduce our

7 unchanged sentences

European Union or other countries might also have a material adverse effect on our operating results.

political conditions could adversely impact our business and financial results.

in the political conditions in markets in which we manufacture, sell or distribute our products may be difficult to predict and

may adversely affect our business and financial results.

For example, the United Kingdom’s recent withdrawal from the European

Union (“Brexit”), despite its recent trade agreement with the European Union, has created uncertainty regarding, among

other things, the U.K.’s future legal and economic framework and how the U.K.

will interact with other countries, including

with respect to the free movement of goods, services, capital and people.

In addition, results of elections, referendums or other

political processes in certain markets in which our products are manufactured, sold or distributed could create uncertainty regarding

how existing governmental policies, laws and regulations may change, including with respect to sanctions, taxes, the movement

of goods, services, capital and people between countries and other matters.

The potential implications of such uncertainty, which

include, among others, exchange rate fluctuations, tariffs, trade barriers and market contraction, could adversely affect the

Company’s business and financial results.

● Operational

are dependent upon Messrs.

Jean Madar and Philippe Benacin, and the loss of their services could harm our business.

Madar, our Chief Executive Officer, and Philippe Benacin, our President, and Chief Executive Officer of Interparfums SA, are responsible

for day-to-day operations as well as major decisions.

Termination of their relationships with us, whether through death, incapacity

or otherwise, could have a material adverse effect on our operations, and we cannot assure you that qualified replacements can

reliance on third party manufacturers could have a material adverse effect on us.

rely on outside sources to manufacture our fragrances and cosmetics.

The failure of such third party manufacturers to deliver

either compliant, quality components or finished goods on a timely basis could have a material adverse effect on our business.

Although we believe there are alternate manufacturers available to supply our requirements, we cannot assure you that current

or alternative sources will be able to supply all of our demands on a timely basis.

We do not intend to develop our own manufacturing

As these are third parties over whom we have little or no control, the failure of such third parties to provide components

or finished goods on a timely basis could have a material adverse effect on our business, financial condition and operating results.

reliance on third party distributors could have a material adverse effect on us.

sell a substantial percentage of our prestige fragrances through independent distributors specializing in luxury goods.

the growing importance of distribution, we have modified our distribution model by owning a controlling interest in certain of

our distributors within key markets.

However, we have little or no control over third party distributors and the failure of such

third parties to provide services on a timely basis could have a material adverse effect on our business, financial condition

and operating results.

In addition, if we replace existing third party distributors with new third party distributors or with

our own distribution arrangements, then transition issues could have a material adverse effect on our business, financial condition

and operating results.

business is subject to governmental regulation, which could impact our operations.

1 unchanged sentence

and Labeling Act and their regulations.

Some of our color cosmetic products may also be classified as a “drug”.

regulatory requirements for products which are “drugs”

include additional labeling requirements, registration of the

manufacturer and the semi-annual update of a drug list.

In addition, various jurisdictions prohibit the use of certain ingredients

in fragrances and cosmetics.

fragrances are subject to the approval of the Bureau of Alcohol, Tobacco and Firearms as a result of the use of specially denatured

So far, we have not experienced any difficulties in obtaining the required approvals.

In addition, various jurisdictions prohibit the use of certain ingredients in fragrances

and cosmetics.

fragrance products that are manufactured or sold in Europe are subject to certain regulatory requirements of the European Union,

such as Cosmetic Directive 76/768/CEE and Regulation number 1223/2009 on cosmetic products, but as of the date of this report,

we have not experienced any material difficulties in complying with such requirements.

such as Regulation number 1223/2009 on cosmetic products, but as of the date of this report, we have not experienced any material

difficulties in complying with such requirements.

we cannot assure you that, should we use proscribed ingredients in our fragrance products that we develop or market, or develop

2 unchanged sentences

of operations.

information systems and websites may be susceptible to outages, hacking and other risks.

have information systems that support our business processes, including product development, production, marketing, order processing,

sales, distribution, finance and intra-company communications.

We also have Internet websites in the United States and Europe.

systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, hacking and similar events.

the implementation of network security measures, our systems may be vulnerable to computer viruses, hacking and similar disruptions

from unauthorized tampering.

The occurrence of these or other events could disrupt or damage our information systems and

adversely affect our business and results of operations.

business is subject to seasonal variability.

business is somewhat seasonal due to the timing of shipments to our customers, which are weighted to the second half of the year.

Accordingly, our financial performance, sales, working capital requirements, cash flow and borrowings generally experience variability

during the third and fourth quarters.

success of our products is dependent on public taste.

revenues are substantially dependent on the success of our products, which depends upon, among other matters, pronounced and rapidly

changing public tastes, factors which are difficult to predict and over which we have little, if any, control.

In addition, we

have to develop successful marketing, promotional and sales programs in order to sell our fragrances and fragrance related products.

If we are not able to develop successful marketing, promotional and sales programs, then such failure will have a material adverse

effect on our business, financial condition and operating results.

are subject to extreme competition in the fragrance industry.

market for fragrance products is highly competitive and sensitive to changing market preferences and demands.

Many of our competitors

in this market are larger than we are and have greater financial resources than are available to us, potentially allowing them

greater operational flexibility.

Our success in the prestige fragrance industry is dependent upon our ability to continue to generate

original strategies and develop quality products that are in accord with ongoing changes in the market.

there is insufficient demand for our existing fragrance products, or if we do not develop future strategies and products that

withstand competition or we are unsuccessful in competing on price terms, then we could experience a material adverse effect on

our business, financial condition and operating results.

Changes in laws, regulations and policies that affect our

business could adversely affect our financial results.

Our business is subject to numerous laws, regulations and policies.

Changes in the laws, regulations and policies, including the interpretation or enforcement thereof, that affect, or will affect,

our business, including changes in accounting standards, tax laws and regulations, environmental or climate change laws, regulations

or accords, trade rules and customs regulations, or increased cosmetics regulation, and the outcome and expense of legal or regulatory

proceedings, and any action we may take as a result could adversely affect our financial results.

success depends, in part, on the quality and safety of our products.

If our products are found to be defective or unsafe,

or if they otherwise fail to meet our consumers’ standards, then our relationships with customers or consumers could suffer,

the appeal of one or more of our brands could be diminished, and we could lose sales and/or become subject to liability claims,

any of which could result in a material adverse effect on our business, results of operations and financial condition.

failure to protect our reputation, or the failure of our partners to protect their reputations, could have a material adverse

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as well as require additional resources to rebuild our reputation.

business is subject to seasonal variability.

business is somewhat seasonal due to the timing of shipments to our customers, which are weighted to the second half of the year.

Accordingly, our financial performance, sales, working capital requirements, cash flow and borrowings generally experience variability

during the third and fourth quarters.

in laws, regulations and policies that affect our business could adversely affect our financial results.

business is subject to numerous laws, regulations and policies.

Changes in the laws, regulations and policies, including the interpretation

or enforcement thereof, that affect, or will affect, our business, including changes in accounting standards, tax laws and regulations,

environmental or climate change laws, regulations or accords, trade rules and customs regulations, or increased cosmetics regulation,

and the outcome and expense of legal or regulatory proceedings, and any action we may take as a result could adversely affect

our financial results.

information systems and websites may be susceptible to outages, hacking and other risks.

have information systems that support our business processes, including product development, production, marketing, order processing,

sales, distribution, finance and intra-company communications.

We also have Internet websites in the United States and Europe.

systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, hacking and similar events.

the implementation of network security measures, our systems may be vulnerable to computer viruses, hacking and similar disruptions

from unauthorized tampering.

The occurrence of these or other events could disrupt or damage our information systems and

adversely affect our business and results of operations.

business could be negatively impacted by corporate citizenship and sustainability matters.

is an increased focus from certain investors, customers, consumers, employees, and other stakeholders concerning corporate citizenship

and sustainability matters.

The standards by which citizenship and sustainability efforts and related matters are measured

are developing and evolving, and certain areas are subject to assumptions.

These standards or assumptions could change over time.

In addition, we could be criticized for the scope of initiatives or goals or perceived as not acting responsibly in connection

with these matters.

Any such matters, or related corporate citizenship and sustainability matters, could have a material

adverse effect on our business.

trading prices of our securities periodically may rise or fall based on the accuracy of predictions of our earnings or other financial

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At the same time, however, we recognize that it may be helpful to provide investors with guidance as to

our forecast of annual net sales and earnings per share.

Accordingly, we provide guidance as to our expected annual net sales,

and earnings per share, which is updated as appropriate throughout the year.

While we generally provide updates to our guidance

when we report our results each fiscal quarter if called for, we assume no responsibility to update any of our forward-looking

statements at such times or otherwise.

In addition, longer-term guidance that we may from time to time provide is based on

goals that we believe, at the time guidance is given, are reasonably attainable.

our forecast of annual net sales and diluted earnings per share.

Accordingly, we provide guidance as to our expected annual

net sales, and diluted earnings per share, which is updated as appropriate throughout the year.

While we generally provide

updates to our guidance when we report our results each fiscal quarter if called for, we assume no responsibility to update any

of our forward-looking statements at such times or otherwise.

In addition, longer-term guidance that we may from time to

time provide is based on goals that we believe, at the time guidance is given, are reasonably attainable.

all of our public statements when we make, or update, a forward-looking statement about our sales and/or earnings expectations

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors