Item 1. Financial Statements
Item
1.
Financial
Statements
In
our opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly our financial position, results of operations and cash flows for the interim periods
presented. We have condensed such financial statements in accordance with the rules and regulations of the Securities and Exchange
Commission (“SEC”). Therefore, such financial statements do not include all disclosures required by accounting principles
generally accepted in the United States of America. In preparing these consolidated financial statements, the Company has evaluated
events and transactions for potential recognition or disclosure through the date the consolidated financial statements were issued
by filing with the SEC. These financial statements should be read in conjunction with our audited financial statements for the
year ended December 31, 2024 , included in our annual report filed on Form 10-K.
The
results of operations for the six months ended June 30, 2025 , are not necessarily indicative of the results to be expected
for the entire fiscal year.
Page 1
INTERPARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In
thousands except share and per share data)
(Unaudited)
ASSETS
June 30, 2025
December 31, 2024
Current assets:
Cash and cash equivalents
$
151,454
$
125,433
Short-term investments
53,901
109,311
Accounts receivable, net
296,043
274,705
Inventories
425,349
371,920
Receivables, other
8,133
6,122
Other current assets
50,083
27,035
Income taxes receivable
2,024
306
Total current assets
986,987
914,832
Property, equipment and leasehold improvements, net
185,356
153,773
Right-of-use assets, net
23,328
24,603
Trademarks, licenses and other intangible assets, net
333,353
282,484
Deferred tax assets
12,618
17,034
Other assets
20,106
18,535
Total assets
$
1,561,748
$
1,411,261
LIABILITIES AND EQUITY
Current liabilities:
Loans payable - banks
$
44,536
$
8,311
Current portion of long-term debt
56,745
41,607
Current portion of lease liabilities
6,250
6,087
Accounts payable – trade
93,146
91,049
Accrued expenses
126,753
172,758
Income taxes payable
5,571
12,615
Total current liabilities
333,001
332,427
Long–term debt, less current portion
153,112
115,734
Lease liabilities, less current portion
18,883
20,455
Equity:
Interparfums, Inc. shareholders’ equity:
Preferred stock, $ .001 par;
authorized 1,000,000 shares; none issued
—
—
Common
stock, $ .001 par; authorized 100,000,000 shares; outstanding 32,117,600 and 32,110,170 shares at June 30, 2025 and December 31, 2024 , respectively
32
32
Additional paid-in capital
108,802
106,702
Retained earnings
787,031
763,240
Accumulated other comprehensive loss
( 1,599
)
( 72,239
)
Treasury stock, at cost, 10,001,665 and 9,981,665 shares at June 30, 2025 and December 31, 2024 , respectively
( 54,907
)
( 52,864
)
Total Interparfums, Inc. shareholders’ equity
839,359
744,871
Noncontrolling interest
217,393
197,774
Total equity
1,056,752
942,645
Total liabilities and equity
$
1,561,748
$
1,411,261
See
notes to consolidated financial statements.
Page 2
INTERPARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Net sales
$
333,936
$
342,229
$
672,755
$
666,192
Cost of sales
112,847
121,472
235,689
243,050
Gross margin
221,089
220,757
437,066
423,142
Selling, general and administrative expenses
161,913
155,929
302,813
290,341
Income from operations
59,176
64,828
134,253
132,801
Other expenses (income):
Interest expense
1,787
1,941
3,332
3,748
Loss (gain) on foreign currency
1,580
634
2,360
( 270
)
Interest and investment loss (income)
1,929
1,076
1,349
( 1,944
)
Other income
( 245
)
( 74
)
( 324
)
( 37
)
Nonoperating Income (Expense)
5,051
3,577
6,717
1,497
Income before income taxes
54,125
61,251
127,536
131,304
Income taxes
12,928
14,653
30,936
31,403
Net income
41,197
46,598
96,600
99,901
Less: Net income attributable to the noncontrolling interest
9,209
9,775
22,120
22,030
Net income attributable to Interparfums, Inc.
$
31,988
$
36,823
$
74,480
$
77,871
Earnings per share:
Net income attributable to Interparfums, Inc. common shareholders:
Basic
$
1.00
$
1.15
$
2.32
$
2.43
Diluted
$
0.99
$
1.14
$
2.32
$
2.41
Weighted average number of shares outstanding:
Basic
32,110
32,024
32,115
32,033
Diluted
32,149
32,266
32,162
32,266
Dividends declared per share
$
0.80
$
0.75
$
1.60
$
1.50
See notes to consolidated financial statements.
Page 3
INTER PARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Comprehensive income:
Net income
$
41,197
$
46,598
$
96,600
$
99,901
Other comprehensive income:
Net derivative instrument gain (loss), net of tax
2,172
( 216
)
6,505
( 1,172
)
Transfer from OCI into earnings
—
( 128
)
1,631
( 64
)
Pension benefits, net of tax
( 52
)
—
( 102
)
—
Translation adjustments, net of tax
59,180
( 5,912
)
87,102
( 20,494
)
Comprehensive income
102,497
40,342
191,736
78,171
Comprehensive income attributable to the noncontrolling interests:
Net income
9,209
9,775
22,120
22,030
Other comprehensive income:
Net derivative instrument gain (loss), net of tax
602
( 94
)
1,793
( 322
)
Pension benefits, net of tax
( 15
)
—
( 29
)
—
Translation adjustments, net of tax
15,458
( 1,715
)
22,732
( 6,732
)
Comprehensive income attributable to the noncontrolling interests
25,254
7,966
46,616
14,976
Comprehensive income attributable to Interparfums, Inc.
$
77,243
$
32,376
$
145,120
$
63,195
See notes to consolidated financial statements.
Page 4
INTERPARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Common stock, beginning and end of period
$
32
$
32
$
32
$
32
Additional paid-in capital, beginning of period
107,985
100,309
106,702
98,565
Shares issued upon exercise of stock options
1,035
44
2,112
1,370
Share-based compensation
205
260
411
521
Purchase/Transfer of subsidiary shares
( 423
)
( 108
)
( 423
)
49
Additional paid-in capital, end of period
108,802
100,505
108,802
100,505
Retained earnings, beginning of period
780,338
711,043
763,240
693,848
Net income
31,988
36,823
74,480
77,871
Dividends
( 25,694
)
( 23,931
)
( 51,394
)
( 47,963
)
Share-based compensation
399
333
705
512
Retained earnings, end of period
787,031
724,268
787,031
724,268
Accumulated other comprehensive loss, beginning of period
( 46,854
)
( 50,417
)
( 72,239
)
( 40,188
)
Foreign currency translation adjustment, net of tax
43,722
( 4,197
)
64,370
( 13,762
)
Transfer from other comprehensive income into earnings
—
( 128
)
1,631
( 64
)
Pension benefits, net of tax
( 37
)
—
( 73
)
—
Net derivative instrument gain (loss), net of tax
1,570
( 122
)
4,712
( 850
)
Accumulated other comprehensive loss, end of period
( 1,599
)
( 54,864
)
( 1,599
)
( 54,864
)
Treasury stock, beginning of period
( 52,864
)
( 52,864
)
( 52,864
)
( 52,864
)
Shares repurchased
( 2,043
)
—
( 2,043
)
—
Treasury stock, end of period
( 54,907
)
( 52,864
)
( 54,907
)
( 52,864
)
Noncontrolling interest, beginning of period
218,882
199,784
197,774
192,777
Net income
9,209
9,775
22,120
22,030
Foreign currency translation adjustment, net of tax
15,458
( 1,715
)
22,732
( 6,732
)
Pension benefits, net of tax
( 15
)
—
( 29
)
—
Net derivative instrument gain (loss), net of tax
602
( 94
)
1,793
( 322
)
Share-based compensation
( 177
)
( 22
)
( 122
)
132
Transfer of subsidiary shares purchased
—
108
—
( 49
)
Dividends
( 26,566
)
( 23,707
)
( 26,875
)
( 23,707
)
Noncontrolling interest, end of period
217,393
184,129
217,393
184,129
Total equity
$
1,056,752
$
901,206
$
1,056,752
$
901,206
See notes to consolidated financial statements.
Page 5
INTERPARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2025
2024
Cash flows from operating activities:
Net income
$
96,600
$
99,901
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization
12,291
12,020
Provision for doubtful accounts
108
715
Noncash stock compensation
946
1,169
Share of income of equity investment
( 410
)
( 70
)
Noncash lease expense
3,969
3,006
Deferred tax provision
5,821
( 2,721
)
Change in fair value of derivatives
( 5,869
)
( 299
)
Changes in:
Accounts receivable
3,637
( 59,603
)
Inventories
( 16,802
)
( 71,184
)
Other assets
( 5,631
)
6,581
Operating lease liabilities
( 4,217
)
( 2,873
)
Accounts payable and accrued expenses
( 74,044
)
( 12,664
)
Income taxes, net
( 11,889
)
( 437
)
Net cash provided by (used in) operating activities
4,510
( 26,459
)
Cash flows from investing activities:
Purchases of short-term investments
( 47,361
)
( 80,879
)
Proceeds from sale of short-term investments
112,078
134,078
Purchases of property, equipment and leasehold improvements
( 16,631
)
( 2,122
)
Payment for intangible assets acquired
( 23,852
)
( 572
)
Net cash provided by investing activities
24,234
50,505
Cash flows from financing activities:
Proceeds from loans payable, bank
35,160
14,244
Proceeds of issuance of long-term debt
54,635
—
Repayment of long-term debt
( 23,795
)
( 15,956
)
Proceeds from exercise of options
2,112
1,370
Dividends paid
( 51,394
)
( 47,963
)
Dividends paid to noncontrolling interest
( 26,875
)
( 23,707
)
Purchase of subsidiary shares from noncontrolling interests
( 408
)
—
Purchase of treasury stock
( 2,043
)
—
Net cash used in financing activities
( 12,608
)
( 72,012
)
Effect of exchange rate changes on cash
9,885
( 1,523
)
Net increase (decrease) in cash and cash equivalents
26,021
( 49,489
)
Cash and cash equivalents - beginning of period
125,433
88,462
Cash and cash equivalents - end of period
$
151,454
$
38,973
Supplemental disclosure of cash flow information:
Cash paid for:
Interest
$
3,031
$
4,264
Income taxes
37,147
32,937
See notes to consolidated financial statements.
Page 6
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes
to Consolidated Financial Statements
(Unaudited)
1.
Significant
Accounting Policies:
The
accounting policies we follow are set forth in the notes to our consolidated financial statements included in our Form 10-K, which
was filed with the Securities and Exchange Commission for the year ended December 31, 2024 .
2.
Recent Agreements:
Longchamp
In July 2025, we announced that our 72 % owned French subsidiary, Interparfums SA, signed an exclusive license agreement with Longchamp, a Parisian Maison, through December 31, 2036 . Interparfums SA will be responsible for the creation, development, production and distribution of fragrance lines in Longchamp-brand points of sale and selective distribution channels. The first launch is expected in 2027. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry.
Goutal
In March 2025, we announced that our 72 % owned French subsidiary, Interparfums SA, acquired all intellectual property rights relating to Maison Goutal held by Amorepacific Europe. Amorepacific Europe will continue to operate the Goutal brand under an existing license agreement that expires on December 31, 2025 , when Interparfums SA will begin commercial use of the fragrance brand.
Coach
In 2015 , Coach and Interparfums SA signed an exclusive worldwide license agreement for the creation, the manufacturing and the distribution of fragrances under the Coach brand until June 30, 2026. In March 2025, the license agreement was renewed for an additional 5 -year term, extending the license through June 30, 2031 .
Abercrombie & Fitch and Hollister
In March 2025, we expanded our Fierce distribution agreement, which now allows for a global distribution of the iconic Fierce fragrance line that either party may terminate on two year ’s notice. Furthermore, our existing Abercrombie & Fitch and Hollister fragrance license agreement will expire on March 14, 2028 . The goal of the updated Fierce distribution agreement is to drive, over time, more consistency between the products that are carried in the Abercrombie & Fitch stores and unaffiliated retailers.
Off-White
In December 2024, we announced that our 72 % owned French subsidiary, Interparfums SA, signed for all Off-White® brand names and registered trademarks for Class 3 fragrance and cosmetic products, subject to an existing license that expires on December 31, 2025, when Interparfums SA will begin commercial use of the fragrance brand.
Van Cleef & Arpels
In 2006 , Van Cleef & Arpels and Interparfums SA signed a 12 -year worldwide license agreement to manufacture and distribute perfumes and related products under the Van Cleef & Arpels brand name, which was subsequently extended for a further six years until December 31, 2024. In December 2024, the license agreement was renewed for an additional 9 -year term, through December 31, 2033.
Roberto Cavalli
In July 2023, we closed a transaction agreement with Roberto Cavalli, whereby an exclusive and worldwide license was granted for the production and distribution of Roberto Cavalli brand perfumes and fragrance related products. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The license became effective in July 2023 and will last for 6.5 years. We began shipping Roberto Cavalli perfumes and fragrance related products in February 2024.
Page 7
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Lacoste
In December 2022, we closed a transaction agreement with Lacoste, whereby an exclusive and worldwide license was granted for the production and distribution of Lacoste brand perfumes and cosmetics. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The license became effective in January 2024 and will last for 15 years . We began shipping Lacoste fragrances in January 2024.
Dunhill
The Dunhill fragrance license expired on September 30, 2023 and was not renewed. The Company had a twelve -month sell-off period during which it maintained the right to sell-off remaining Dunhill fragrance inventory, which is customary in the fragrance industry. As of September 30, 2024, all finished goods and components have been sold and we no longer carry any inventory related to Dunhill.
Rochas Fashion
As a result of operational challenges faced by the Rochas Fashion business, we took a $ 2.4 million impairment charge on our Rochas fashion trademark in the first quarter of 2021 and a $ 6.8 million impairment charge in the fourth quarter of 2022 after an independent expert concluded that the fair value of the trademark was $ 11.2 million. In 2023 , the Rochas team underwent a strategic shift to take over their own brand operations, exiting contracts with manufacturers and distributors to make this new structure operational beginning in 2024 . In the fourth quarter of 2024 , we again took a $ 4.0 million impairment charge on the Rochas fashion trademark after management reviewed and agreed with an independent expert's conclusion that the fair value of the trademark was $ 7.2 million. There have been no triggering events through the first half of 2025 that would require management to perform an impairment analysis.
3.
Recent
Accounting Pronouncements:
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024 - 03 , Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40 ): Disaggregation of Income Statement Expenses and in January 2025, the FASB issued ASU No. 2025 - 01 , Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Clarifying the Effective Date, which clarified the effective date of ASU 2024 - 03 . The ASU requires, among other things, more detailed disclosures about types of expenses in commonly presented expense captions such as cost of sales and selling, general and administrative expenses and is intended to improve the disclosures about an entity's expenses including purchases of inventory, employee compensation, depreciation and intangible asset amortization. ASU 2024 - 03 will also require the Company to disclose both the amount and the Company's definition of selling expenses. The guidance, as clarified by ASU 2025 - 01 , is effective for fiscal years beginning after December 15, 2026, and interim periods for fiscal years beginning after December 15, 2027, on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes
(Topic 740): Improvements to Income Tax Disclosures. The ASU includes
amendments requiring enhanced income tax disclosures, primarily related to
standardization and disaggregation of rate reconciliation categories and income
taxes paid by jurisdiction. The guidance is effective for annual periods
beginning after December 15, 2024. Early adoption is permitted and shall be
applied on a prospective basis with the option to apply retrospectively. We are
currently evaluating the impact of adopting this ASU on our disclosures.
There are no other recent accounting pronouncements issued but not yet
adopted that would have a material effect on our consolidated financial
statements.
4.
Inventories:
Inventories consist of the following:
(In thousands)
June 30, 2025
December 31, 2024
Raw materials and component parts
$
148,810
$
137,572
Finished goods
276,539
234,348
$
425,349
$
371,920
Page 8
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
5.
Fair Value Measurement:
The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
Fair Value Measurements at June 30, 2025
Total
Quoted Prices in
Active Markets for
Identical Assets
(Level 1 )
Significant Other
Observable
Inputs
(Level 2 )
Significant
Unobservable
Inputs
(Level 3 )
Assets:
Short-term investments
$
53,901
$
3,510
$
50,391
$
—
Interest rate swaps
1,527
—
1,527
—
Foreign currency forward exchange contracts not accounted for using hedge accounting
5,793
—
5,793
—
Foreign currency forward exchange contracts accounted for using hedge accounting
7,511
—
7,511
—
Total Assets
$
68,732
$
3,510
$
65,222
$
—
Fair Value Measurements at December 31, 2024
Total
Quoted Prices in
Active Markets for
Identical Assets
(Level 1 )
Significant Other
Observable
Inputs
(Level 2 )
Significant
Unobservable
Inputs
(Level 3 )
Assets:
Short-term investments
$
109,311
$
7,703
$
101,608
$
—
Interest rate swaps
1,967
—
1,967
—
Total Assets
$
111,278
$
7,703
$
103,575
$
—
Liabilities:
Foreign currency forward exchange contracts not accounted for using hedge accounting
445
—
445
—
Foreign currency forward exchange contracts accounted for using hedge accounting
1,435
—
1,435
—
Total Liabilities
$
1,880
$
—
$
1,880
$
—
Page 9
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The carrying amount of cash and cash equivalents, short-term investments including money market funds and marketable equity securities, accounts receivable, other receivables, accounts payable and accrued expenses approximate fair value due to the short terms to maturity of these instruments. The carrying amount of loans payable approximates fair value as the interest rates on the Company’s indebtedness approximate current market rates. The fair value of the Company’s long-term debt was estimated based on the current rates offered to companies for debt with the same remaining maturities and is approximately equal to its carrying value.
Foreign currency forward exchange contracts are valued based on quotations from financial institutions and the value of interest rate swaps is the discounted net present value of the swaps using third party quotes from financial institutions.
6.
Derivative
Financial Instruments:
The
Company enters into fo reign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign
currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency. Before entering
into a derivative transaction for hedging purposes, we determine that a high degree of initial effectiveness exists between
the change in value of the hedged item and the change in the value of the derivative instrument from movement in exchange rates.
High effectiveness means that the change in the cash flows of the derivative instrument will effectively offset the change in
the cash flows of the hedged item. The effectiveness of each hedged item is measured throughout the hedged period and is based
on the dollar offset methodology and excludes the portion of the fair value of the foreign currency forward exchange contract
attributable to the change in spot-forward difference which is reported in current period earnings. Any hedge ineffectiveness
is also recognized as a gain or loss on foreign currency in the income statement. For contracts designated as hedges that are no longer deemed
highly effective, hedge accounting is discontinued, and gains and losses accumulated in other comprehensive income are reclassified
to earnings. If it is probable that the forecasted transaction will no longer occur, then any gains or losses accumulated
in other comprehensive income are reclassified to current-period earnings.
In
December 2022, to finance the acquisition of the Lacoste trademark, the Company entered into a € 50 million (approximately
$ 58.6 million ) 4 -year term loan with a variable interest rate. This variable rate debt was swapped for variable interest rate
debt with a maximum rate of 2 % per annum. This swap is a hedged derivative instrument and is therefore recorded at fair value
and changes in fair value are reflected in the accompanying consolidated statements of comprehensive income.
In
connection with the April 2021 acquisition of the office building complex in Paris, € 120 million (approximately $ 140.6 million)
of the purchase price was financed through a 10 -year variable rate term loan. The Company entered into interest rate swap contracts related
to € 80 million of the loan, effectively exchanging the variable interest rate to a fixed rate of approximately 1.1 %. This
derivative instrument is recorded at fair value and changes in fair value are reflected in the accompanying consolidated statements
of income.
Gains
and losses in derivatives designated as hedges are accumulated in other comprehensive income and gains and losses in derivatives
not designated as hedges are included in loss (gain) on foreign currency in the accompanying consolidated statements of income.
Such gains and losses were immaterial for the six months ended June 30, 2025 and 2024 , respectively.
All
derivative instruments are reported as either assets or liabilities on the consolidated balance sheet measured at fair value.
The fair value of interest rate swaps includes a liability position which is included in long-term debt on the accompanying consolidated balance sheet, and an asset position which is included in other assets on the accompanying balance sheet. The fair value of foreign currency forward exchange contracts at June 30, 2025 , resulted in a net asset and is included in other current assets on the accompanying consolidated balance sheet.
At June 30, 2025 , the Company had foreign currency contracts in the form of forward exchange contracts with notional amounts of approximately USD $ 111 million which all have maturities of less than one year .
Page 10
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
7.
Leases:
The
Com pany leases its offices and warehouses, vehicles, and certain office equipment, substantially all of which are classified as
operating leases. The Company currently has no material financing leases. The Company determines if an arrangement is a lease
at inception. Operating lease assets and obligations are recognized at the lease commencement date based on the present value
of lease payments over the lease term.
In
determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to
extend or terminate, depending on the lease. Renewal, termination or purchase options affect the lease term used for determining
lease asset value only if the option is reasonably certain to be exercised. The Company generally uses its incremental borrowing
rate based on information available at the lease commencement date for the location in which the lease is held in determining
the present value of lease payments.
As
of June 30, 2025 , the weighted average remaining lease term was 3.7 years and the weighted average discount rate used to determine
the operating lease liability was 3.1 %. Rental expense related to operating leases was $ 1.7 million and $ 3.4 million for the three and six months ended June 30, 2025 , respectively, as compared to $ 1.7 million and $ 3.3 million for the corresponding periods of the prior year . Operating lease payments included in operating cash flows totaled $ 4.2
million and $ 2.9 million for the six months ended June 30, 2025 and 2024 , respectively, and noncash additions to operating lease assets totaled $ 0.9 millio n and $ 0.8 million for the six months ended June 30, 2025 and 2024 , respectively.
8.
Share-Based Payments:
The Company maintains a stock option program for key employees, executives and directors. The plans, all of which have been approved by shareholder vote, provide for the granting of both nonqualified and incentive options. Options granted under the plans typically have a six -year term and vest over a four to five -year period. The fair value of shares vested during the six months ended June 30, 2025 and 2024 aggregated $ 0.02 million and $ 0.04 million , respectively. Compensation cost, net of estimated forfeitures, is recognized on a straight-line basis over the requisite service period for the entire award. Forfeitures are estimated based on historic trends. It is generally our policy to issue new shares upon exercise of stock options.
The following table sets forth information with respect to nonvested options for the six months ended June 30, 2025 :
Number of Shares
Weighted Average Grant-Date Fair Value
Nonvested options – beginning of period
118,650
$
30.02
Nonvested options granted
—
—
Nonvested options vested or forfeited
( 7,100
)
$
24.34
Nonvested options – end of period
111,550
$
30.38
Page 11
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Share-based payment expense decresased income before income taxes by $ 0.39 million and $ 0.95 million for the three and six months ended June 30, 2025 respectively, as compared to decreases of $ 0.58 million and $ 1.17 million for the three and six months ended June 30, 2024 respectively, and decreased income attributable to Interparfums, Inc. by $ 0.26 million and $ 0.62 million for the three and six months ended June 30, 2025 respectively, as compared to $ 0.38 million and $ 0.77 million for the corresponding periods of the prior year .
The following table summarizes stock option information as of June 30, 2025 :
Shares
Weighted Average
Exercise Price
Outstanding at January 1, 2025
248,430
$
103.00
Options forfeited
( 6,200
)
124.61
Options exercised
( 27,430
)
76.98
Outstanding at June 30, 2025
214,800
$
105.70
Options exercisable
103,250
$
82.55
Options available for future grants
498,595
As of June 30, 2025 , the weighted average remaining contractual life of options outstanding is 3.0 years ( 1.3 years for options exercisable); the aggregate intrinsic value of options outstanding and options exercisable is $ 6.2 million and $ 5.2 million , respectively; and unrecognized compensation cost related to stock options outstanding aggregated $ 2.9 million.
Cash proceeds, tax benefits and intrinsic value related to stock options exercised during the six months ended June 30, 2025 and 2024 were as follows:
(In thousands)
June 30, 2025
June 30, 2024
Cash proceeds from stock options exercised
$
2,112
$
1,370
Tax benefits
205
224
Intrinsic value of stock options exercised
1,618
1,409
There were no options granted during the six months ended June 30, 2025 and June 30, 2024 .
Expected volatility is estimated based on the historic volatility of the Company’s common stock. The expected term of the option is estimated based on historical data. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option and the dividend yield reflects the assumption that the dividend payout as authorized by the Board of Directors maintain its current payout ratio as a percentage of earnings.
In March 2022, Interparfums SA, our 72 % owned French subsidiary, approved a plan to grant an aggregate of 88,400 shares of its stock to all Interparfums SA employees and corporate officers having more than six months of employment at grant date, subject to certain corporate performance conditions. The corporate performance conditions were met and therefore in June 2025, 106,046 shares, adjusted for stock splits, were distributed.
The fair value of the grant had been determined based on the quoted stock price of Interparfums SA shares as reported by the Euronext on the date of grant. The aggregate cost of the grant of approximately $ 4.2 million was recognized as compensation cost on a straight-line basis over the requisite three and a quarter year service period.
Page 12
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
In order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed pursuant to this plan were pre-existing shares of Interparfums SA, purchased in the open market by Interparfums SA. As of June 30, 2025 the Company acquired 106,046 shares at an aggregate cost of $ 4.5 million .
All share purchases and issuances have been classified as equity transactions on the accompanying balance sheet.
9.
Net Income Attributable to Interparfums, Inc. Common Shareholders:
Net income attributable to Interparfums, Inc. per common share (“basic EPS”) is computed by dividing net income attributable to Interparfums, Inc. by the weighted average number of shares outstanding. Net income attributable to Interparfums, Inc. per share assuming dilution (“diluted EPS”), is computed using the weighted average number of shares outstanding, plus the incremental shares outstanding assuming the exercise of dilutive stock options using the treasury stock method.
The reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows:
Three months ended
Six Months Ended
(In thousands)
June 30,
June 30,
2025
2024
2025
2024
Numerator:
Net income attributable to Interparfums, Inc.
$
31,988
$
36,823
$
74,480
$
77,871
Denominator:
Weighted average shares
32,110
32,024
32,115
32,033
Effect of dilutive securities:
Stock options
39
242
47
233
Denominator for diluted earnings per share
32,149
32,266
32,162
32,266
Earnings per share:
Net income attributable to
Interparfums, Inc. common shareholders:
Basic
$
1.00
$
1.15
$
2.32
$
2.43
Diluted
$
0.99
$
1.14
$
2.32
$
2.41
Not included in the above computations are the effect of antidilutive potential common shares which consist of outstanding options to purchase 0.08 million shares of common stock for the three and six months ended June 30, 2025 and 0.05 million shares of common stock for the three and six months ended June 30, 2024 .
Page 13
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
10.
Segment and Geographic Areas:
The Company manufactures and distributes one product line, fragrances and fragrance related products. The Company manages its business in two segments, European based operations and United States based operations. The European based operations, assets and business operations are primarily conducted in France, and include the results and assets of Interparfums Luxury Brands, Inc ., located in the United States. For United States based operations, assets and business operations are primarily conducted in the United States, and include the results and assets of Interparfums Italia Srl , located in Italy. Both European based operations and United States based operations primarily represent the sale of prestige brand name fragrances.
Information on the Company’s operations by segments is as follows:
Three Months Ended June 30, 2025
Six Months Ended June 30, 2025
United States
based operations
European
based operations
Total
United States
based operations
European
based operations
Total
Net sales
$
95,759
$
240,549
$
336,308
$
190,104
$
488,375
$
678,479
Eliminations (a)
—
( 2,372
)
( 2,372
)
—
( 5,724
)
( 5,724
)
95,759
238,177
333,936
190,104
482,651
672,755
Less: (b)
Cost of sales
37,606
76,143
76,572
161,525
Eliminations (a)
—
( 902
)
—
( 2,408
)
Segment gross margin
58,153
162,936
221,089
113,532
323,534
437,066
Less: (b)
Advertising and Promotion
15,902
52,939
31,289
89,079
Employee related costs
13,350
18,475
27,215
36,663
Royalties
7,235
20,470
14,273
41,493
Other segment items (c)
9,521
24,021
18,149
44,652
Segment income from operations
$
12,145
$
47,031
$
59,176
$
22,606
$
111,647
$
134,253
Reconciliation:
Interest expense
1,787
3,332
Loss on foreign currency
1,580
2,360
Interest and investment income
1,929
1,349
Other income
( 245
)
( 324
)
Income before income taxes
$
54,125
$
127,536
Page 14
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated
Financial Statements
Three Months Ended June 30, 2024
Six Months Ended June 30, 2024
United States
based operations
European
based operations
Total
United States
based operations
European
based operations
Total
Net sales
$
120,190
$
226,016
$
346,206
$
215,958
$
456,974
$
672,932
Eliminations (a)
—
( 3,977
)
( 3,977
)
—
( 6,740
)
( 6,740
)
120,190
222,039
342,229
215,958
450,234
666,192
Less: (b)
Cost of sales
52,234
70,628
91,834
153,816
Eliminations (a)
—
( 1,389
)
—
( 2,600
)
Segment gross margin
67,956
152,800
220,756
124,124
299,018
423,142
Less: (b)
Advertising and Promotion
16,962
49,426
31,896
82,817
Employee related costs
12,851
16,563
25,338
34,729
Royalties
8,324
18,700
15,495
38,718
Other segment items (c)
9,735
23,367
19,158
42,190
Segment income from operations
$
20,084
$
44,744
$
64,828
$
32,237
$
100,564
$
132,801
Reconciliation:
Interest expense
1,941
3,748
Loss (gain) on foreign currency
634
( 270
)
Interest and investment loss (income)
1,076
( 1,944
)
Other income
( 74
)
( 37
)
Income before income taxes
$
61,251
$
131,304
(a)
Eliminations of intercompany sales relate to European based operations products sold to United States based operations.
(b)
The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
(c)
Other segment items for each reportable segment include expenses for professional services, travel and entertainment, rent, warehousing, shipping, depreciation and amortization, and other selling, general and administrative costs.
Page 15
INTERPARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Other segment disclosures:
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Net income attributable to Interparfums, Inc.:
United States
$
9,555
$
15,225
$
18,223
$
24,752
Europe
23,535
23,412
58,744
56,097
Eliminations
( 1,102
)
( 1,814
)
( 2,487
)
( 2,978
)
$
31,988
$
36,823
$
74,480
$
77,871
Depreciation and amortization expense:
United States
$
1,753
$
1,703
$
3,433
$
3,427
Europe
4,611
4,299
8,858
8,593
$
6,364
$
6,002
$
12,291
$
12,020
Interest and investment income:
United States
$
( 508
)
$
( 1
)
$
( 740
)
$
( 4 )
Europe
2,437
700
2,089
( 2,628
)
Eliminations
—
377
—
688
$
1,929
$
1,076
$
1,349
$
( 1,944
)
Interest expense:
United States
$
394
$
703
$
604
$
1,155
Europe
1,393
1,615
2,728
3,281
Eliminations
—
( 377
)
—
( 688
)
$
1,787
$
1,941
$
3,332
$
3,748
Income tax expense:
United States
$
1,813
$
3,781
$
3,525
$
5,598
Europe
11,103
11,191
27,552
26,264
Eliminations
12
( 319
)
( 141
)
( 459
)
$
12,928
$
14,653
$
30,936
$
31,403
Additions to long-lived assets(a):
United States
$
372
$
512
$
542
$
938
Europe
16,176
818
39,941
1,756
$
16,548
$
1,330
$
40,483
$
2,694
(a) Total long-lived assets include property, equipment and leasehold improvements, trademarks, licenses, and other intangible assets, and right-of-use assets.
June 30,
December 31,
2025
2024
Total Assets:
United States
$
416,333
$
352,139
Europe
1,163,019
1,073,326
Eliminations
( 17,604
)
( 14,204
)
$
1,561,748
$
1,411,261
Page 16
INTERPARFUMS, INC. AND SUBSIDIARIES
I tem 2 :
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Information
Statements in this report which are not historical in nature are forward-looking statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. In some cases, you can identify forward-looking statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will” and “would” or similar words. You should not rely on forward-looking statements because actual events or results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors. These factors include, but are not limited to, the risks and uncertainties discussed under the headings “Forward Looking Statements” and “Risk Factors” in Interparfums’ annual report on Form 10-K for the fiscal year ended December 31, 2024 , and the reports Interparfums files from time to time with the Securities and Exchange Commission (“SEC”). Interparfums does not intend to and undertakes no duty to update the information contained in this report.
Overview
We operate in the fragrance business, and manufacture, market and distribute a wide array of prestige fragrances and fragrance related products. We manage our business in two segments, European based operations and United States based operations. Certain prestige fragrance products are produced and marketed by our European based operations through our 72 % owned subsidiary in Paris, Interparfums SA, which is also a publicly traded company as 28 % of Interparfums SA shares trade on the Euronext.
We produce and distribute fragrance products through our European based operations primarily under license agreements with brand owners, and European based fragrance product sales represented approximately 72 % and 68 % of net sales for the six months ended June 30, 2025 and 2024 , respectively. We have built a portfolio of prestige brands, which include Boucheron, Coach, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste, Lanvin, Moncler, Montblanc, Rochas and Van Cleef & Arpels, whose products are distributed in over 120 countries around the world.
Through our United States based operations, we also produce and distribute fragrance and fragrance related products. United States based operations represented 28 % and 32 % of net sales for the six months ended June 30, 2025 and 2024 , respectively. These fragrance products are sold primarily pursuant to license or other agreements with the owners of the Abercrombie & Fitch, Anna Sui, Donna Karan/DKNY, Emanuel Ungaro, Ferragamo, Graff, GUESS, Hollister, MCM, Oscar de la Renta and Roberto Cavalli brands.
Substantially all of our prestige fragrance brands are licensed from unaffiliated third parties, and our business is dependent upon the continuation and renewal of such licenses. With respect to the Company’s largest brands, we license the Jimmy Choo, Coach , Montblanc , GUESS, Lacoste, Donna Karan/DKNY, and Ferragamo brand names.
As a percentage of net sales, product sales for the Company’s largest brands represented 77 % and 74 %, respectively, with a split by brand as follows:
Six Months Ended
June 30,
2025
2024
Coach
17
%
14
%
Jimmy Choo
17
%
16
%
Montblanc
15
%
17
%
GUESS
10
%
11
%
Lacoste
8
%
6
%
Donna Karan/DKNY
6
%
6
%
Ferragamo
3
%
4
%
Page 17
INTERPARFUMS, INC. AND SUBSIDIARIES
Quarterly sales fluctuations are influenced by the timing of new product launches as well as the third and fourth quarter holiday season. In certain markets where we sell directly to retailers, seasonality is more evident. We primarily sell directly to retailers in France, the United States, and Italy.
We grow our business in two distinct ways. First, we grow by adding new brands to our portfolio, through new licenses or other arrangements, or outright acquisitions of brands. Second, we grow through the introduction of new products and by supporting new and established products through advertising, merchandising and sampling, as well as phasing out underperforming products, so we can devote greater resources to those products with greater potential. The economics of developing, producing, launching and supporting products influence our sales and operating performance each year. The introduction of new products may have some cannibalizing effect on sales of existing products, which we take into account in our business planning.
Our business is not capital intensive, and it is important to note that we do not own manufacturing facilities. We act as a general contractor and source our needed components from our suppliers. These components are received and stored directly at our third party fillers or received at one of our distribution centers. For those components received at one of our distribution centers, based upon production needs, the components are subsequently sent to one of several third party fillers, which manufacture the finished product for us and then deliver them to one of our distribution centers.
As with any global business, many aspects of our operations are subject to influences outside our control. We believe we have a strong and well diversified brand portfolio with global reach and potential. As part of our strategy, we plan to continue to make investments behind fast-growing markets and channels to grow market share.
Our reported net sales are impacted by changes in foreign currency exchange rates as approximately 50 % of net sales of our European based operations are denominated in U.S. dollars, while almost all costs of our European based operations are incurred in euro. We address certain financial exposures through a controlled program of risk management that includes the use of derivative financial instruments and primarily enter into foreign currency forward exchange contracts to reduce the effects of fluctuating foreign currency exchange rates.
Recent Important Events
Please see our discussion of Recent Important Events, which is incorporated by reference to Note 2 to the Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 .
Discussion of Critical Accounting Policies
Information regarding our critical accounting policies can be found in our 2024 Annual Report on Form 10-K filed with the SEC.
Page 18
INTERPARFUMS, INC. AND SUBSIDIARIES
Results of Operations
Three and Six Months Ended June 30, 2025 as Compared to the Three and Six Months Ended June 30, 2024
Net Sales:
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions)
2025
2024
% Change
2025
2024
% Change
European based product sales
$
240.5
$
226.0
6
%
$
488.4
$
457.0
7
%
United States based product sales
95.8
120.2
( 20 )
%
190.1
216.0
12
%
Eliminations
( 2.4
)
( 4.0
)
n/a
( 5.7
)
( 6.8
)
n/a
$
333.9
$
342.2
( 2 )
%
$
672.8
$
666.2
1
%
*n/a = not applicable
Net sales for the three months ended June 30, 2025 decreased 2 % from the three months ended June 30, 2024 . Organic sales for the three months ended June 30, 2025, which exclude the impact of foreign exchange and the discontinuation of the Dunhill license, also decreased 2% compared to the prior year period. The average dollar/euro exchange rate for the current second quarter was 1.13 compared to 1.08 in the second quarter of 2024 resulting in an increase of net sales of 2% in the three months ended June 30, 2025 as compared to the prior year period. Net sales for the six months ended June 30, 2025 increased 1 % as compared to the six months ended June 30, 2024 . Organic sales for the six months ended June 30, 2025 increased 2.5% as compared to the prior year period. For the six months ended June 30, 2025, the impact of exchange rates on net sales was an increase of 0.4% as compared to the prior year period.
For European based operations, sales in the three months ended June 30, 2025 increased 6% on a reported basis and 4% on an organic basis, compared to the corresponding period of the prior year, driven by Lacoste and Coach, which grew by 59% and 42%, respectively. These increases were driven by continued strong performance in these brand's established lines, plus the successful launches of Coach for Men Eau de Parfum and Coach Women Gold . Jimmy Choo fragrance sales declined 20% compared to a high base in the corresponding period of the prior year. However, brand sales increased 5% for the six months ended June 30, 2025 compared to the corresponding period of the prior year due to the introduction of Jimmy Choo Man Extreme in the first quarter and the continued popularity of the I Want Choo fragrance family. Sales of Montblanc were broadly flat in the second quarter, but are expected to increase through the balance of 2025 with the recent launch of Explorer Extreme. For the six months ended June 30, 2025, European based operations sales increased 7% on a reported basis and 6% on an organic basis, compared to the corresponding period of the prior year.
For United States based operations, sales in the three months ended June 30, 2025 decreased 20% compared to the corresponding period of the prior year as a result of the discontinuation of the Dunhill license which had an 8% negative impact. With the phase-out of Dunhill fragrances completed in August of 2024, we expect minimal impact on a quarter-over-quarter comparison going forward. GUESS and Donna Karan/DKNY fragrance sales in the three months ended June 30, 2025 declined by 8% and 13%, respectively, compared to the corresponding period of the prior year, driven by the timing of product launches and tariff generated supply chain disruptions. Roberto Cavalli fragrance sales continue to benefit from our integration, growing 23% and 25% in the three and six months ended June 30, 2025, respectively, compared to the corresponding periods in the prior year. MCM sales rose by 3% in the second quarter compared to the second quarter of 2024 with the continued success from the launch of the MCM Collection . For the six months ended June 30, 2025, United States based operations sales decreased 12% on a reported basis and 6% on an organic basis, compared to the corresponding period of the prior year.
While the second quarter saw a slight overall decline, we are confident in our future as we look forward to executing our plans for the remainder of 2025 . A new blockbuster, Roberto Cavalli Serpentine, began limited distribution in the second quarter and will expand throughout the remainder of the year. We have a large number of brand extensions across many of our brands launching throughout the year, including a new flanker for Lacoste Original and a new flanker for I Want Choo in the second half of 2025 . Additionally, extensions are set to debut for Donna Karan Cashmere Collection , GUESS Bella Vita , and DKNY 24 / 7 . While the pace of growth in the fragrance market is starting to slow down, the power of our diverse brand portfolio, in combination with our agile operating model, should help us gain market share.
Page 19
INTERPARFUMS, INC. AND SUBSIDIARIES
Net Sales to Customers by Region
Six Months Ended
(In millions)
June 30,
2025
2024
North America
$
245.4
$
229.7
Western Europe
176.1
170.6
Asia/Pacific
91.8
104.8
Central and South America
63.6
59.2
Middle East and Africa
50.1
61.6
Eastern Europe
45.8
40.3
$
672.8
$
666.2
In the six months ended June 30, 2025 , net sales in our largest market, North America, rose 7 % as compared to the prior year period, followed by an increase in Western Europe of 3 %. Our sales in Asia/Pacific decreased by 12 % driven by a higher base from 2024 in Australia and distribution disruptions in South Korea in the current year while the overall trend remains positive in China and Japan. Our net sales in Eastern Europe were also robust, up 14 % in the six months ended June 30, 2025 as compared to the prior year period when we faced temporary sourcing constraints. Central and South America net sales increased 7 %. Middle East and Africa net sales declined 19 % primarily due to a disproportionate impact from the exit of the Dunhill license due to its significant presence. Excluding the impact of Dunhill, Middle East and Africa net sales declined 6% due to the impacts of the conflicts in the region and a reduction in the number of doors in many markets that are now more focused on higher-end luxury fragrances.
Gross Profit Margin
Three Months Ended
Six Months Ended
(in millions)
June 30,
June 30,
2025
2024
2025
2024
European based operations
Net sales
$
240.5
$
226.0
$
488.4
$
457.0
Cost of sales
76.1
70.6
161.5
153.8
Gross profit margin
$
164.4
$
155.4
$
326.9
$
303.2
Gross profit margin as a percentage of net sales
68.3
%
68.8
%
66.9
%
66.3
%
United States based operations
Net sales
$
95.8
$
120.2
$
190.1
$
216.0
Cost of sales
37.6
52.2
76.6
91.8
Gross profit margin
$
58.2
$
68.0
$
113.5
$
124.2
Gross profit margin as a percentage of net sales
60.7
%
56.5
%
59.7
%
57.5
%
The Company’s gross profit margin as a percentage of net sales was 66.2 % and 65.0 % for the three and six months ended June 30, 2025 as compared to 64.5 % and 63.5 % for the corresponding period of the prior year. The increase in the three and six months ended June 30, 2025 as compared to the prior year period was driven by favorable segment and brand mix in the current year.
For European based operations, gross profit margin as a percentage of net sales was 68.3 % and 66.9 % for the three and six months ended June 30, 2025 , respectively, as compared to 68.8 % and 66.3 % for the corresponding period of the prior year. European based operations were negatively impacted by brand and channel mix during the three months ended June 30, 2025 as compared to the prior year period, while brand and channel mix were favorable overall in the first half of 2025.
Page 20
INTERPARFUMS, INC. AND SUBSIDIARIES
For United States based operations, gross profit margin as a percentage of net sales was at 60.7 % and 59.7 % for the three and six months ended June 30, 2025 respectively, as compared to 56.5 % and 57.5 % for the corresponding periods of the prior year. The increase in both periods was mainly driven by the discontinuation of Dunhill products which were sold at lower margins in 2024 as is customary during sell-off periods.
Generally, we do not bill customers for shipping and handling costs, which are included in selling, general and administrative expenses in the consolidated statements of income. As such, our Company’s gross profit may not be comparable to other companies, which may include these expenses as a component of cost of goods sold.
Selling, general and administrative expenses
Three Months Ended
Six Months Ended
(In millions)
June 30,
June 30,
2025
2024
2025
2024
European based operations
Selling, general and administrative expenses
$
115.9
$
108.1
$
211.9
$
198.5
Selling, general and administrative expenses as a percentage of net sales
48.2
%
47.8
%
43.4
%
43.4
%
United States based operations
Selling, general and administrative expenses
$
46.0
$
47.9
$
90.9
$
91.9
Selling, general and administrative expenses as a percentage of net sales
48.0
%
39.8
%
47.8
%
42.5
%
The Company’s selling, general and administrative expenses as a percentage of net sales was 48.5 % and 45.0 % for the three and six months ended June 30, 2025 as compared to 45.6 % and 43.6 % for the three and six months ended June 30, 2024 . The increase was largely driven by increased spending on promotional and advertising activities and increased employee related costs in both the second quarter and first half of 2025 as compared to the prior year periods.
For European based operations, selling, general and administrative expenses increased 7% for both the three and six months ended June 30, 2025 a s compared to the corresponding periods of the prior year, and represented 48.2 % and 43.4% of net sales for the three and six months ended June 30, 2025 , as compared to 47.8% and 43.4% for the three and six months ended June 30, 2024 . The increase in selling, general and administrative expenses as a percentage of net sales in the second quarter resulted from an increase in employee related costs due to a one time adjustment resulting from the ending of the 2022 free-share plan in France. For United States based operations, selling, general and administrative expenses decreased 3.9% and 1.0% for the three and six months ended June 30, 2025 as compared to the corresponding periods of the prior year, and represented 48.0% and 47.8% of net sales for the three and six months ended June 30, 2025, as compared to 39.8% and 42.5% for the three and six months ended June 30, 2024. The increase in selling, general and administrative expenses as a percentage of net sales was largely driven by lower sales in 2025 with the discontinuation of Dunhill in 2024.
Promotion and advertising included in selling, general and administrative expenses aggregated $68.8 million and $120.4 million for the three and six months ended June 30, 2025 , respectively, as compared to $ 66.4 million and $ 114.7 million for the corresponding periods of the prior year and represented 20.6 % and 17.9 % of net sales for the three and six months ended June 30, 2025 , respectively, as compared to 19.4 % and 17.2 % for the corresponding periods of the prior year. Promotion and advertising are integral parts of our industry, and we continue to invest heavily to support new pr oduct launches and to build brand awareness. We believe that our promotion and advertising efforts have a beneficial effect on sales. As such, the Company is focused on increasing promotional and advertising spending to support the continued success of our brands. Additionally, we continue to develop and implement omnichannel concepts and compelling content to deliver an integrated consumer experience. Long term, we continue to anticipate that on a full year basis, promotion and advertising expenditures will aggregate approximately 21 % of net sales.
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INTERPARFUMS, INC. AND SUBSIDIARIES
Royalty expense included in selling, general and administrative expenses aggregated $27.7 million and $55.8 million for the three and six months ended June 30, 2025 , respectively, as compared to $ 27.0 million and $ 54.2 million for the corresponding periods of the prior year. Royalty expense represented 8.3 % of net sales for both the three and six months ended June 30, 2025 as compared to 7.9 % and 8.1 % of net sales for the corresponding periods of the prior year. This increase was primarily driven by unfavorable brand mix.
Income from Operations
As a result of the above analysis regarding net sales, gross profit margins and selling, general and administrative expenses, our operating margins aggregated 17.7 % and 20.0 % for the three and six months ended June 30, 2025 , respectively, as compared to 18.9 % and 19.9 % for the corresponding period of the prior year.
Other Income and Expense
Overall, other income and expense for the six months ended June 30, 2025 , was a loss of $6.7 million as compared to a loss of $1.5 million in the corresponding prior year period. The main drivers of this change are discussed in more detail below. One of the main drivers is the impact of our gains and losses on foreign currency where we recognized a loss of $2.4 million in the first half of 2025 compared to a gain of $0.3 million in the first half of 2024 . Another driver of this change is the impact of our gains and losses on marketable securities where we had recorded a loss of $3.4 million in the first half of 2025 and a loss of $0.6 million in the first half of 2024 . Changes in interest expense and interest income were favorable year-over-year with net interest expense of $1.1 million during the six months ended June 30, 2025 as compared to a net interest expense of $0.8 million in the prior year period.
Interest expense is primarily related to the financing of brand and licensing acquisitions as well as our headquarters in Paris. Long-term debt including current maturities aggregated $210.0 million and $ 157.3 million as of June 30, 2025 and December 31, 2024 , respectively. Interest expense was $3.1 million in the six months ended June 30, 2025 compared to $3.5 million in the prior year period.
We enter into foreign currency forward exchange contracts to manage exposure related to receivables from unaffiliated third parties denominated in a foreign currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency. Approximately 50 % of net sales of our European based operations are denominated in U.S. dollars. Gains and losses in derivatives designated as hedges are accumulated in other comprehensive income and gains and losses in derivatives not designated as hedges are included in (gain) loss on foreign currency on the accompanying consolidated income statements. Such gains and losses were immaterial in the three and six months ended June 30, 2025 and 2024 .
Interest and investment income represents interest earned on cash and cash equivalents and short-term investments and realized and unrealized gains and losses on marketable equity securities. Interest income was $2.6 million in the six months ended June 30, 2025 compared to $1.7 million in the prior year period. As of June 30, 2025 , short-term investments also include approximately $3.5 million of marketable equity securities of other companies in the luxury goods sector. In the second quarter of 2025 , the Company had unrealized losses on these securities $1.1 million compared to unrealized gains of $1.5 million for the corresponding period of the prior year.
Income Taxes
Our consolidated effective tax rate was 24.3% and 23.9 % for the six months ended June 30, 2025 and 2024 , respectively. The effective tax rate for European based operations was 25.4% and 25.0 % for the six months ended June 30, 2025 and 2024 , respectively, while the effective tax rate for United States based operations was 18.8% for the six months ended June 30, 2025 , as compared to 19.9 % for the corresponding period of the prior year. Our effective tax rate for United States based operations differs from the 21 % statutory rate in the United States as it is a blended rate across multiple jurisdictions, and takes into account benefits received from the exercise of stock options as well as deductions we are allowed for a portion of our foreign derived intangible income, slightly offset by state and local taxes. Other than as discussed above, we did not experience any significant changes in tax rates, and none were expected in jurisdictions where we operate.
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INTERPARFUMS, INC. AND SUBSIDIARIES
Net Income
Three Months Ended
Six Months Ended
(In thousands)
June 30,
June 30,
2025
2024
2025
2024
Net income attributable to European based operations
$
32,745
$
33,187
$
80,864
$
78,127
Net income attributable to United States based operations
9,555
15,225
18,223
24,752
Eliminations
( 1,103
)
( 1,814
)
( 2,487
)
( 2,978
)
Net income
41,197
46,598
96,600
99,901
Less: Net income attributable to the noncontrolling interest
9,209
9,775
22,120
22,030
Net income attributable to Interparfums, Inc.
$
31,988
$
36,823
$
74,480
$
77,871
Net income attributable to Interparfums, Inc. was $ 32.0 million and $74.5 million for the three and six months ended June 30, 2025 , respectively, as compared to $ 36.8 million and $ 77.9 million for the corresponding period of the prior year.
Net income attributable to European based operations was $ 32.7 million and $ 80.9 million for the three and six months ended June 30, 2025 , as compared to $ 33.2 million and $ 78.1 million for the corresponding periods of the prior year, while net income attributable to United States based operations was $ 9.6 million and $ 18.2 million the three and six months ended June 30, 2025 , as compared to $ 15.2 million and $ 24.8 million the corresponding periods of the prior year. The significant fluctuations in net income for both European based operations and United States based operations are directly related to the previous discussions pertaining to changes in sales, gross margin, and selling, general and administrative expenses.
The noncontrolling interest arises from our 72 % owned subsidiary in Paris, Interparfums SA, which is also a publicly traded company as 28 % of Interparfums SA shares trade on the Euronext. Net income attributable to the noncontrolling interest is directly related to the profitability of our European based operations and aggregated 28 % of European based operations net income for both the six months ended June 30, 2025 and 2024 . Net profit margins attributable to Interparfums, Inc. for the six months ended June 30, 2025 and 2024 aggregated 11.1% and 11.7 %, respectively.
Liquidity and Capital Resources
Our conservative financial tradition has enabled us to amass significant cash balances. As of June 30, 2025 , we had $205.4 million in cash, cash equivalents and short-term investments, the majority of which are held in euro by our European based operations and is readily convertible into U.S. dollars. We have not experienced any liquidity issues to date, and do not expect any liquidity issues relating to such cash and cash equivalents and short-term investments.
As of June 30, 2025 , working capital aggregated $654.0 million. Approximately 74% of the Company’s total assets are held by European based operations, and approximately $298.3 million of trademarks, licenses and other intangible assets are also held by European based operations.
The Company is party to a number of licenses and other agreements for the use of trademarks and rights in connection with the manufacture and sale of its products expiring at various dates through 2039 . In connection with most of these license agreements, the Company is subject to minimum annual advertising commitments, minimum annual royalties and other commitments. See Item 8 . Financial Statements and Supplementary Data – Note 11 – Commitments in our 2024 annual report on Form 10-K, which is incorporated by reference herein. Future advertising commitments are estimated based on planned future sales for the license terms that were in effect at December 31, 2024 , without consideration for potential renewal periods and do not reflect the fact that our distributors share our advertising obligations.
The Company hopes to continue to benefit from its strong financial position to potentially acquire one or more brands, either on a proprietary basis or as a licensee. In July 2025, our 72% owned French subsidiary, Interparfums SA, signed an exclusive fragrance license agreement with Longchamp running through December 31, 2036. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The first launch is expected in 2027. In June 2025, our 72 % owned French subsidiary, Interparfums SA, acquired all intellectual property rights relating to Maison Goutal held by Amorepacific Europe. Amorepacific Europe will continue to operate the Goutal brand under an existing license agreement that expires on December 31, 2025, when Interparfums SA will begin commercial use of the fragrance brand. Additionally, in June 2025, we renewed the Coach license agreement for an additional five -year term, extending the license through June 30, 2031.
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INTERPARFUMS, INC. AND SUBSIDIARIES
In December 2024, our 72 % owned French subsidiary, Interparfums SA, obtained all Off-White brand names and registered trademarks for Class 3 fragrance and cosmetics products, subject to an existing license that expires on December 31, 2025, when Interparfums SA will begin commercial use of the fragrance brands. Furthermore, in December 2024, we renewed the Van Cleef & Arpels license agreement for an additional nine -year term, beginning January 1, 2025. In July 2023, we entered into a global licensing agreement for the creation, development and distribution of fragrances and fragrance related products under the Roberto Cavalli brand. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. This license took effect in July 2023, and we began shipping products in February 2024.
In December 2022, we entered into a long-term global licensing agreement for the creation, development and distribution of fragrances and fragrance related products under the Lacoste brand. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. This license took effect and products started to ship in January 2024.
Cash provided by operating activities aggregated $4.5 million for the six months ended June 30, 2025 compared to cash used in operating activities of $ 26.5 million for the six months ended June 30, 2024 . For the six months ended June 30, 2025 , working capital items used $108.9 million in cash from operating activities, as compared to $ 140.2 million in the 2024 period. F rom a cash flow perspective, accounts receivables are down 1% from year end 2024 . The balance is reasonable based on second quarter 2025 sales levels and seasonality of the business. Day’s sales outstanding remained consistent at 74 days, up slightly from 72 days in the corresponding period of the prior year driven by changes in our channel mix, as we are still seeing strong collection activity and do not anticipate any issues with collections of accounts receivable. From a cash flow perspective, inventory levels as of June 30, 2025 increased 5% from year end 2024 as is customary as we prepare for second half sales and holiday season orders. As compared to June 30, 2024, our inventory levels have decreased as we continue to work to manage down our inventory. We are doing this by increasing conversion of raw materials into finished goods resulting in finished goods making up 65.0% of our inventory levels at June 30, 2025 as compared to 59.7% at June 30, 2024 . Due to past supply constraints, we had strived to carry more inventory overall, source the same components from multiple suppliers and when possible, manufacture products closer to where they are sold. These constraints have largely abated and we are gradually reversing some of these previous interventions. We are beginning to see the impacts of these recent inventory management efforts and will continue to work to optimize inventory levels.
Cash flows provided by investing activities in 2025 are comprised of the net effect of purchases and sales of short-term investments. These investments consist of certificates of deposit with maturities greater than six months, marketable equity securities and other contracts. At June 30, 2025 , approximately $2.3 million of certificates of deposit contain penalties where we would forfeit a portion of the interest earned in the event of early withdrawal.
These proceeds were offset by the payment for capital expenditures during the quarter. In March 2025, the Company paid approximately $19.7 million for the purchase of the Goutal Trademark. Additionally, during the second quarter the Company purchased approximately $15.3 million of additional property in Paris attached to its French headquarters.
Our business is not capital intensive as we do not own any manufacturing facilities. On a full year basis, we typically spend approximately $ 5 million on tools and molds, depending on our new product development calendar. Capital expenditures also include amounts for office fixtures, computer equipment, and industrial equipment needed at our distribution centers.
Cash flows used in financing activities in 2025 reflect issuances and repayments of debt and payment of dividends to stockholders.
Our short-term financing requirements are expected to be met by available cash on hand at June 30, 2025 , and by short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2025 consist of $70 million unsecured revolving lines of credit provided by a consortium of domestic commercial banks and approximately $9.4 million (€8 million) in credit lines provided by a consortium of international financial institutions. There was $9.4 million of short-term borrowings outstanding pursuant to these facilities as of June 30, 2025 and $18.5 million outstanding as of June 30, 2024 .
In February 2024, the Board of Directors authorized an annual dividend of $ 3.00 per share. In February 2025, the Board of Directors further increased the annual dividend to $ 3.20 per share. The next quarterly cash dividend of $ 0.80 per share is payable on September 30, 2025, to shareholders of record on September 15, 2025.
We believe that funds provided by or used in operations can be supplemented by our present cash position and available credit facilities, so that they will provide us with sufficient resources to meet all present and reasonably foreseeable future operating needs.
Inflation rates in the United States and foreign countries in which we operate did not have a significant impact on operating results for the six months ended June 30, 2025 ; however, we anticipate potential inflationary impacts in the second half of 2025 due to potential increased costs from tariffs.
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INTERPARFUMS, INC. AND SUBSIDIARIES
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.