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- **Revenue Resilience**: European sales +5% YoY, driven by a stronger euro, while U.S. sales (-5%) reflect strategic portfolio shifts. Key brands like Jimmy Choo, Coach, and Montblanc, etc.

**【CEO Summary Section】**
- **Revenue Growth and Market Dynamics**: European-based operations sales rose 5% year-over-year, driven by a stronger euro, while U.S.-based sales declined 5% (excluding Dunhill). Key brands like Jimmy Choo Fragrance saw a 16% surge, and Coach fragrances grew 6% due to new launches like Coach Gold.
- **Innovation and New Launches**: Introduced Serpentine (Roberto Cavalli's new fragrance) and the direct-to-consumer e-commerce channel Solférino. Targeting 100 retail doors by September 2026 and 500 by 2030. Digital sales on Amazon and TikTok Shop are accelerating, with fragrance holding 50% market share in beauty categories.
- **Operational Efficiency**: Transitioned 100% of packing, shipping, and order fulfillment to third-party providers. Implementing the first sale rule for U.S. imports to mitigate tariffs, expected completion by Q2 2026. Inventory management improved, with finished goods mix optimized.
- **Pricing Strategy**: Implemented selective price increases (2% average) on prestige and luxury brands, with minimal consumer resistance. Third-quarter unit pricing rose 5.9%, offsetting input cost pressures.

**【CFO Financial Commentary】**
- **Financial Performance**: Q3 2025 net sales $430 million (+1% YoY), operating income $109 million (+2%), and diluted EPS $2.05 (+6%). Gross margin expanded 80 bps year-to-date to 64.4%, despite Q3 tariffs reducing margin by 40 bps.
- **Segment Breakdown**: European-based operations gross margin 66.6% (year-to-date), U.S.-based 59% (excluding Dunhill). SG&A expenses optimized, with A&P spend at 15.3% of Q3 sales. Inventory reduced 6% YoY, focusing on finished goods.
- **Cash Flow and Share Repurchase**: Operating cash flow $68 million (18% of net income), with $7.5 million in share repurchases year-to-date. Balance sheet remains strong with $188 million cash and $688 million working capital.
- **Guidance**: Full-year 2025 sales $1.47 billion (+1%), EPS $5.12. 2026 outlook for moderate growth, with 2027 acceleration via new licenses (Off-White, Longchamp, Goutal).

**【Q&A Key Highlights】**
- **Holiday Sales Confidence**: Strong October gift set sales, Amazon momentum, and minimal inventory overhang. Q3 unit sales growth 1%, pricing (+7% in September) offsetting macro challenges.
- **Tariff Mitigation Progress**: First sale rule implementation for U.S. imports to reduce tariff impact, expected completion Q2 2026. Gross margin erosion (~50 bps) in Q4 due to ongoing tariff adjustments.
- **New Brand Pipeline**: 2027 launches of Off-White, Goutal, and Longchamp fragrances, with Longchamp targeting $100 million in annual sales. Portfolio optimization focuses on high-margin, scalable brands like Coach, Jimmy Choo, and Montblanc.

Interparfums, Inc. (IPAR) Q3 2025 Earnings Call Transcript

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