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    IPAR
    Earnings call· Jun 2026(Q2 FY26)

    INTERPARFUMS Q2 FY26 earnings call IPAR

    Aug 5, 2026 Source

    Executive summary

    Interparfums Q2 FY26 — Strong H1 Performance Driven by Key Brands and Digital Growth

    Interparfums delivered solid Q2 FY26 results, with strong brand performance and digital commerce offsetting regional headwinds in the Middle East and parts of Europe. The company maintains its full-year outlook, supported by strategic investments in marketing and an anticipated robust pipeline of blockbuster launches and new brand introductions in 2027 and 2028, reinforcing its commitment to long-term profitable growth.

    Highlights

    5

    • Consolidated sales grew 2% in Q2 and H1 2026, with organic sales up 4% in Q2 excluding Middle East headwinds.

    • Asia Pacific sales increased 14% in H1, driven by Coach and Montblanc, and a new Korean affiliate.

    • U.S.-based operations saw net sales rise 18% in Q2 and 10% in H1, benefiting from strong demand and tariff refunds.

    • First half gross margin expanded by 30 basis points to 65.3%, primarily due to favorable mix and lower destruction costs.

    • Operating cash flow reached $46 million in H1, up from $5 million in the prior year period, representing 49% of net income.

    Concerns

    5

    • Middle East and Africa sales fell 24% in H1 due to ongoing war in the region, impacting brands like Roberto Cavalli.

    • Western Europe declined 3% and Eastern Europe was down 7% in H1 due to softer consumer demand and operational difficulties.

    • Consolidated operating profit declined to $123 million in H1, with operating margin at 17.9% compared to 20% in prior year.

    • European-based operations net sales declined 4% in Q2 and 1% in H1, with 5% organic declines in each period.

    • Gross margin in European-based operations declined to 67.4% in Q2 from 68.3% in prior year, due to unfavorable mix and higher tariffs.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year sales
    $1.48 billion
    high materiality
    High
    Full-year diluted EPS
    $4.85
    high materiality
    High
    Full-year A&P expenditures
    approach 21% of net sales
    medium materiality
    Medium
    Full-year gross margins
    improve by roughly 150 basis points
    medium materiality
    Medium
    Return to improved growth
    improved growth
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    European-based operations
    Net sales declined modestly, with 5% organic declines, partially offset by favorable FX. Faced tough year-over-year comparison. Gross margin declined in Q2 due to unfavorable mix and higher tariffs, but H1 improved due to mix, lower destruction costs, and IEEPA tariff refunds. SG&A increased due to product launches, brand investments, royalties, employee costs, and logistics.
    Organic decline: 5% (Q2), 5% (H1)Gross margin: 67.4% (Q2) vs 68.3% (prior Q2), 67.4% (H1) vs 66.9% (prior H1)SG&A: $125 million (Q2), $229 million (H1)SG&A as % of net sales: 53.9% (Q2), 47.4% (H1)IEEPA tariff refunds: $2.7 million (H1)Initial tariff expense: $4.5 million (H1)Net income as % of net sales: 10% (Q2) vs 13.6% (prior Q2), 15% (H1) vs 16.6% (prior H1)
    		—-4% (Q2), -1% (H1)—Net income: $23 million (Q2), $73 million (H1)
    United States-based operations
    Net sales rose significantly, benefiting from a favorable comparison base. Organic growth was strong. Gross margin expanded due to tariff refunds and lower destruction costs, offsetting unfavorable mix and higher ongoing tariffs. SG&A grew below sales growth, reflecting productivity gains.
    Organic growth: 17% (Q2), 8% (H1)Gross margin: 61.6% (Q2) vs 60.7% (prior Q2), 60.3% (H1) vs 59.7% (prior H1)SG&A as % of net sales: 44.2% (Q2) vs 48% (prior Q2), 46% (H1) vs 47.8% (prior H1)IEEPA tariff refunds: $4.2 million (H1)Net income as % of net sales: 13.7% (Q2) vs 10% (prior Q2), 11.4% (H1) vs 9.6% (prior H1)
    		—18% (Q2), 10% (H1)—Net income: $15 million (Q2), $24 million (H1)

    Operational metrics

    45
    Interparfums SA ownership
    72
    Current

    Interparfums SA is the company's French subsidiary.

    Consolidated sales growth
    2
    Q2, H1 2026

    Reported sales growth for both periods.

    Organic sales growth (ex-Middle East)
    4
    Q2 2026

    Organic sales growth excluding war-related headwinds in the Middle East.

    Organic sales growth (ex-Middle East)
    1
    H1 2026

    Organic sales growth excluding war-related headwinds in the Middle East.

    North America sales growth
    5
    H1 2026

    North America is the largest market.

    Asia Pacific sales growth
    14
    H1 2026

    Driven by Coach and Montblanc, and new Korean affiliate.

    South America sales growth
    15
    H1 2026

    Behind continued success of Coach for women and Montblanc's Legend line.

    Western Europe sales decline
    3
    H1 2026

    Due to softer consumer demand.

    Eastern Europe sales decline
    7
    H1 2026

    Amid operational difficulties in certain markets, impacting Lanvin and Lacoste.

    Middle East and Africa sales decline
    24
    H1 2026

    War in the region continued to weigh on results, impacting Roberto Cavalli.

    Coach brand growth
    10
    H1 2026

    Driven by strong performance in the U.S. and new extensions.

    Montblanc brand growth
    6
    H1 2026

    Due to favorable exchange rates and success of Explorer Extreme and Legend franchise.

    Jimmy Choo brand growth
    823% jump in Q2
    H1 2026

    Particularly strong in the U.S. with I Want Choo and Jimmy Choo Man.

    GUESS brand growth
    11
    H1 2026

    Bolstered by Iconic Blue for men and Amore Napoli extension.

    Ferragamo brand growth
    1741% jump in Q2
    H1 2026

    Geographically broad growth with Signorina and Ferragamo lines.

    Donna Karan/DKNY brand growth
    1228% increase in Q2
    H1 2026

    Healthy demand across categories and e-commerce growth.

    Roberto Cavalli brand growth
    8
    H1 2026

    Fueled by new introductions, but impacted by Middle East war.

    Lacoste brand decline
    16vs 44% growth in prior H1
    H1 2026

    Due to tough comparison and Eastern Europe pressures.

    Solferino points of sale
    100
    end of H1 2026

    Newly created wholly-owned brand.

    Travel retail % of total net sales
    7in line with prior periods
    Current

    Strongest in New York, softer elsewhere.

    Tariff additional expense
    8.2compared to last year
    H1 2026

    Net additional expense in cost of sales.

    IEEPA tariff refunds received
    8.7
    as of June 30, 2026

    Total IEEPA tariff refunds owned are $17.6 million.

    IEEPA tariff refunds recognized
    6.9
    Q2 2026

    Recognized as a nonrecurring reduction in cost of sales.

    Consolidated gross margin
    65.3up from 65% in prior H1
    H1 2026

    Expanded by 30 basis points.

    A&P spending
    12918.8% of sales
    H1 2026

    Reflects ongoing commitment to investing in brands.

    Consolidated operating profit
    123
    H1 2026

    Declined in H1 2026.

    Consolidated operating margin
    17.9compared to 20% in prior H1
    H1 2026
    Other income and expenses
    0.4from $6.7 million loss in prior H1
    H1 2026

    Positive impact of $7 million, driven by higher interest income and gains on securities.

    Consolidated effective tax rate
    24.2stable compared to 24.3% in prior H1
    H1 2026
    Consolidated net income
    74held stable
    H1 2026
    Consolidated diluted EPS
    2.31compared to $2.32 in prior H1
    H1 2026
    Cash, cash equivalents and short-term investments
    211
    June 30, 2026

    Balance sheet remains strong.

    Working capital
    664
    June 30, 2026
    Accounts receivable decline
    3
    from year-end 2025

    Driven by changes in channel mix.

    Days sales outstanding
    73decreased slightly from 74 days in prior year period
    June 30, 2026
    Inventories
    376declined 12% compared to prior year period
    June 30, 2026

    Driving inventory efficiencies.

    Inventory days on hand
    26934-day reduction
    June 30, 2026
    Share repurchase program
    —
    Current

    Board authorized as an additional capital allocation tool, for shares of Interparfums, Inc. or Interparfums SA.

    Line of credit authorization
    250
    Current

    Board authorized to support share repurchase program, enhancing financial flexibility.

    7 largest brands % of H1 sales
    81
    H1 2026
    7 largest brands growth
    6
    H1 2026
    Direct-to-retail channel % of H1 sales
    42
    H1 2026
    Direct-to-retail channel growth
    9
    H1 2026
    Top 20 brand region combination % of sales
    84
    Current
    Top 20 brand region combination growth
    7
    Current

    Showcasing the overall strength of core business.

    Industry KPIs

    9
    MetricValueDetails
    Channel mixDigital commerce remains a growth driver
    Underlying sales growth2%%
    Power brands contribution81%%
    Brand marketing investment$129 millionUSD
    Brand health superiority scoresBella Blanca from Oscar de la Renta took Best Eau de Parfum at The Marie Claire Fragrance Awards 2026; Ferragamo Signorina Romantica honored as best true gourmand fragrance at Who What Wear Fragrance Awards 2026.
    Market value share by geographyGUESS stands among the top 15 fragrance brand in Australia
    Productivity cost savings programCost saving initiatives
    Developed vs emerging market splitNorth America up 5%, Asia Pacific up 14%, South America up 15%%
    Underlying operating margin bridge17.9%%

    Product announcements

    3
    ProductTypeDetails
    Solferino 11th fragrancelaunch
    Longchamp fragranceslaunch
    Off-White fragranceslaunch

    Deals & partnerships

    2
    New distributor in IndiaDistribution agreement to bring Coach, Montblanc, Jimmy Choo and other brands to India.

    Teamed up with a new distributor to expand presence in one of the world's fastest-growing beauty markets.

    Karry WangGlobal fragrance ambassador for Ferragamo.

    Chinese singer and actor Karry Wang joined the Ferragamo family as the brand's global fragrance ambassador.

    Risks & headwinds

    5
    War in the Middle EastH1 2026, ongoing

    Middle East and Africa sales fell 24% in H1

    Mitigation: Diversified footprint allowed overall growth; cautiously optimistic about balance of '26.

    Moderating demand in international marketsH1 2026, ongoing

    Western Europe down 3% (H1), Eastern Europe down 7% (H1)

    Mitigation: Diversified footprint and strong brand performance.

    Overall economic concernsCurrent

    Consumers remain increasingly selective

    Mitigation: Fragrance category remains resilient as an affordable indulgence; focus on brands with personality, quality, and global reach.

    TariffsH1 2026, ongoing

    Net additional expense of $8.2 million in H1 2026

    Mitigation: Manufacturing primarily in Europe, rates largely in line with existing operations; positioning distributors closer to point of sale; cost saving initiatives.

    Inflationary impactsOngoing

    Potential impacts as suppliers adjust pricing

    Mitigation: Closely monitoring.

    What to watch in Q3 FY26

    5

    IEEPA Tariff Refunds Impact

    Q3 and Q4 2026
    Current$6.9 million recognized in Q2
    TargetRemaining balance of $17.6 million to benefit Q3 and Q4

    Why it matters

    These refunds will contribute to gross margin improvement and allow for reinvestment in A&P, impacting profitability and growth initiatives.

    In July 2026, we received the remaining balance of the $17.6 million in IEEPA tariff refunds owned. These funds will benefit quarter 3 and quarter 4 of this year.

    Q&A highlights

    5

    How is consumer selectivity manifesting in fragrance (fewer add-ons, smaller sizes, promotions)? Are there changes in China demand, with international brands performing better?

    Management sees healthy demand, no significant increase in promotional activity or shift to smaller sizes. China market is doing well, with significant growth, especially when leveraging celebrity ambassadors.

    “There is no particular increase of small size, and we do not see any more -- no particular promotional activity. So we will not have anything special to report on that. Regarding China, what we can see is that when we are able to find and sign celebrity ambassadors that have hundred millions of followers, of course, this accelerate the sale.”

    asked by Sydney Wagner · answered by Jean Madar

    2 min read5 chapters

    Detailed Narrative

    01

    Global Brand Performance & Regional Dynamics

    Interparfums reported 2% sales growth in Q2 and H1 2026, with organic sales up 4% in Q2 excluding Middle East headwinds. North America grew 5% in H1, Asia Pacific 14%, and South America 15%. However, Western Europe declined 3%, Eastern Europe 7%, and Middle East and Africa fell 24% due to regional conflicts. Key brands like Coach (up 10%), Montblanc (up 6%), Jimmy Choo (up 8%), GUESS (up 11%), Ferragamo (up 17%), and Donna Karan/DKNY (up 12%) showed strong H1 momentum.

    02

    Innovation & New Brand Development

    The company is preparing for significant launches in 2027, including blockbusters for Montblanc, Coach, GUESS, and Jimmy Choo, which are expected to drive high single-digit to low double-digit growth. New brands like Longchamp and Off-White are also slated for 2027 launches, with Longchamp having the potential to become a $100 million brand. Solferino, a wholly-owned brand, expanded to 100 points of sale and plans an 11th fragrance launch in H2 2026.

    03

    Digital Commerce & Consumer Engagement

    Digital commerce, particularly Amazon and TikTok Shop, remains a significant growth driver. Amazon is the largest online beauty retailer in the U.S. and Europe, while TikTok Shop is the fourth largest in the U.S. The company is adapting its engagement strategies to meet consumers across social media, marketplaces, and in-stores, focusing on storytelling and consistent brand experiences.

    04

    Tariffs & Cost Management

    The company does not expect meaningful changes to its cost structure from new Section 301 tariffs, as rates are largely in line with existing operations. It is actively working on cost-saving initiatives and positioning distributors closer to points of sale to mitigate tariff impact🌐s. IEEPA tariff refunds totaling $17.6 million have been received, with $6.9 million recognized in Q2 and the remainder expected to benefit Q3 and Q4.

    05

    Financial Position & Capital Allocation

    Interparfums maintains a strong balance sheet with $211 million in cash and equivalents and $664 million in working capital as of June 30, 2026. Operating cash flow significantly improved to $46 million in H1 from $5 million in the prior year. The Board authorized a share repurchase program and a $250 million line of credit to enhance financial flexibility, with a disciplined approach to capital allocation.

    AI-generated summary of the company’s earnings call. Not investment advice.