INTERPARFUMS INC
For the period ended Mar 31, 2025. Filed May 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 5, 2025
IPAR$135.55+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001753926-24-001818
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-05.
0001753926-25-000738
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 63 current paragraphs.
26 unchanged; 28 reworded; 9 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Three Months Ended March 31, 2025 as Compared to the Three Months Ended March 31, 2024
Current report
For European based operations, sales increased 7% compared to the corresponding period of the prior year, driven by Jimmy Choo, Coach, and Lacoste, which grew by 36%, 11%, and 30%, respectively, respectively, compared to the corresponding period of the prior year. These increases were driven by continued strong performance for the I Want Choo and Jimmy Choo Man franchises, the introduction of Coach Man Extreme, and strong demand for Lacoste as the brand entered its second year under our management. Sales of Montblanc declined by 16%, which was driven by the substantial increase in sales in the first quarter of 2024 following the debut of Legend Blue. Sales are expected to increase through the balance of 2025 with the introduction of Montblanc Explorer Extreme later this year.
Current report
Sales by our United States based operations grew from an organic perspective 3% of a high 2024 base when first quarter organic sales expanded by 11%. Overall, on a reported basis, sales declined by 1% in thefirst quarter of 2025 compared to the corresponding period of the prior year, as a result of the discontinuation of the Dunhill license which had a 4% negative impact. Donna Karan/DKNY fragrance sales rose by 5% resulting from the continued strength of our Cashmere Mist franchise and MCM sales grew by 17% with the rollout of the MCM Collection. Following the start of its fragrance distribution in February 2024, Roberto Cavalli delivered a 28% increase in net sales. Sales of GUESS declined slightly during the quarter off a very high base in first quarter of 2024 when sales grew by 21%.
Current report
For United States based operations, gross profit margin as a percentage of net sales remained flat at 58.7% for thethree months ended March 31, 2025 and 2024 due to consistent brand and channel mix.
Current report
The Company’s selling, general and administrative expenses as a percentage of net sales were 41.6% for thethree months ended March 31, 2025 as compared to 41.5% for thethree months ended March 31, 2024. The percentage of net sales remained relatively flat from the prior year period as promotional and advertising spending increased as a percentage of net sales by 0.3%, offset by scale benefits related to other fixed selling, general and administrative items which decreased selling, general and administrative expenses as a percentage of net sales by 0.2%.
Current report
For European based operations, selling, general and administrative expenses increased 6.2%for thethree months ended March 31, 2025 as compared to the corresponding period of the prior year, and represented 38.7% of net sales for thethree months ended March 31, 2025, as compared to 39.1% for thethree months ended March 31, 2024. The decrease in selling, general and administrative expenses as a percentage of net sales resulted from a 0.3% reduction related to scale benefits related to fixed selling, general and administrative items, a 0.2% reduction related to royalty expense due to a favorable change in brand mix, partially offset by an increase of 0.1% related to higher advertising and promotional expenditures. For United States based operations, selling, general and administrative expenses increased 2.1%for thethree months ended March 31, 2025, as compared to the corresponding period of the prior year, and represented 47.6% of net sales for thethree months ended March 31, 2025, as compared to 46.0% for thethree months ended March 31, 2024, respectively. The increase in selling, general and administrative expenses as a percentage of net sales was largely driven by the annualization impact of the investment in infrastructure and headcount made throughout 2024 to support the growth of the business leading to increased employee related costs as percentage of net sales of 1.7% as well as increased promotional and advertising spending as a percentage of net sales of 0.7%. These increases were offset by efficiencies related to other fixed selling, general and administrative items which decreased selling, general and administrative expenses as a percentage of sales by 0.7%.
Current report
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 $150.8 million and $157.3 million as of March 31, 2025 and December 31, 2024, respectively. Interest expense was $1.5 million in the three months ended March 31, 2025 compared to $1.8 million in the prior year period.
Current report
The Company hopes to continue to benefit from its strong financial position to potentially acquireone or more brands, either on a proprietary basis or as a licensee. In March 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 March 2025, we renewed the Coach license agreement for an additional five-year term, extending the license through June 30, 2031.
Current report
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.
Removed paragraphs (8)
Previous report
Three and Nine Months Ended September 30, 2024 as Compared to the Three and Nine Months Ended September 30, 2023
Previous report
Continuing the trend from the second quarter of 2024, the current third quarter saw strong sales growth as compared to the corresponding period of the prior year. This was driven by both the growing global fragrance market in combination with the addition of our newest brands, Lacoste and Roberto Cavalli, which contributed 10% to the increase.
Previous report
For European based operations, Jimmy Choo and Montblanc sales grew by 17% and 10%, respectively, compared to the corresponding period of the prior year, driven by the launch of Jimmy Choo I Want Choo Le Parfum and the ongoing strength in the Montblanc Explorer and Legend lines. Sales of Coach remained flat as compared to the corresponding period of the prior year. This was largely driven by the substantial increase in sales of Coach in the third quarter of 2023 of 32% as compared to the third quarter of 2022. During the first quarter of 2024, we began selling the Lacoste brand, which added $29 million and $68 million in sales during thethree andnine months ended September 30, 2024, respectively. During the third quarter of 2024, we rolled out the international launch of Lacoste Original and launched a new Karl Lagerfeld pillar, Ikonik.
Previous report
Sales by our United States based operations grew a modest 8.7% in the third quarter of 2024 off a high 2023 base when third quarter sales had expanded 64%. The addition and extension of Roberto Cavalli contributed to the continued growth in United States based operations with the debut of Sweet Ferocious in August of this year. GUESS and Donna Karan/DKNY rose 16% and 4%, respectively, compared to the corresponding period of the prior year, following the roll-out of GUESS Iconic and DKNY 24/7 building upon the strong performance of our legacy scents for both brands.
Previous report
For United States based operations, gross profit margin as a percentage of net sales was 59.2%and 58.2% for thethree and nine months ended September 30, 2024, respectively, as compared to 55.6% and 56.7% for the corresponding periods of the prior year. The increase in both periods was driven by favorable brand and channel mix.
Previous report
The Company’s selling, general and administrative expenses as a percentage of net sales were 38.9% and 41.8% for thethree andnine months ended September 30, 2024 as compared to 40.2% and 39.8% for thethree andnine months ended September 30, 2023. The increase in the first three quarters of the year was largely driven by increased spending on promotional and advertising activities as compared to the prior year period. Additionally, starting in 2024, the Company began to amortize the cost of the Lacoste license which represented $4.8 million during the first nine months of the year. These costs are being incurred at approximately $1.6 million quarterly over the remaining life of the license. The decrease in the third quarter was driven by the phasing of promotional and advertising activities by our European based operations discussed in detail below.
Previous report
For European based operations, selling, general and administrative expenses increased 9.6%and 15.6% for the three andnine months ended September 30, 2024 as compared to the corresponding period of the prior year, and represented 38.3% and 41.5% of net sales for thethree and nine months ended September 30, 2024, respectively, as compared to 42.3% and 40.1% for thethree and nine months ended September 30, 2023, respectively. As discussed above, this increase is driven by increased promotion and advertising spending as well as the impact of the amortization of the Lacoste license. While promotion and advertising spend increased on a year to date basis, a portion of the activities planned for the third quarter were pushed into the fourth quarter resulting in a decrease in selling, general and administrative expenses as a percentage of net sales in the current quarter as compared to the prior year period. For United States based operations, selling, general and administrative expenses increased 16.1%and 15.7% for thethree andnine months ended September 30, 2024, as compared to the corresponding period of the prior year, and represented 39.0% and 41.1% of net sales for thethree andnine months ended September 30, 2024, respectively, as compared to 36.5% and 39.3% for thethree andnine months ended September 30, 2023, respectively. The increase was largely driven by continued investment in infrastructure and headcount to support the growth of the business as well as increased promotional and advertising spending.
Previous report
Interest expense is primarily related to the financing of brand and licensing acquisitions. In December 2022, to finance the acquisition of the Lacoste trademark, the Company entered into a $56 million (€50 million)four-year loan agreement. The loan agreement bears interest at EURIBOR-1 month rates plus a margin of 0.825%. This variable rate debt was swapped for variable interest rate debt with a maximum rate of 2% per annum. Additionally, in April 2021, we completed the acquisition of the headquarters of Interparfums SA. The acquisition was financed by a 10-year approximately $128.5 million (€120 million) bank loan which bears interest atone-month Euribor plus 0.75%. Approximately $89.6 million (€80 million) of the variable rate debt was swapped for fixed interest rate debt with a maximum interest rate of 2% per annum. The swap effectively exchanges the variable interest rate to a fixed rate of approximately 1.1%. Additionally in July 2024, the Company entered into a$44.8 million (€40 million)three-year loan agreement that bears a fixed interest rate of 4.03%. The loan was used to purchase additional short-term investments. Long-term debt including current maturities aggregated $179.1 million and $157.5 million as of September 30, 2024 and December 31, 2023, respectively.
Reworded paragraphs (28)
Previous wording
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 67% of net sales for thenine months ended September 30, 2024 and 2023, 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. Our exclusive and worldwide license for the production and distribution of Lacoste brand perfumes and cosmetics became effective in January 2024.
Current wording
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 70% ofnet sales for thethree months ended March 31, 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. Our exclusive and worldwide license for the production and distribution of Lacoste brand perfumes and cosmetics became effective in January 2024.
Previous wording
Through our United States based operations, we also produce and distribute fragrance and fragrance related products. United States based operations represented 33% of net sales for thenine months ended September 30, 2024 and 2023, 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, Emanual Ungaro, Ferragamo, Graff, GUESS, Hollister, MCM, Oscar de la Renta and Roberto Cavalli brands.
Current wording
Through our United States based operations, we also produce and distribute fragrance and fragrance related products. United States based operations represented 28% and 30% of net sales for thethree months ended March 31, 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.
Previous wording
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, Montblanc, Coach, GUESS, Donna Karan/DKNY, Lacoste, and Ferragamo brand names.
Current wording
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.
Previous wording
As a percentage of net sales, product sales for the Company’s largest brands were as follows:
Current wording
As a percentage of net sales, product sales for the Company’s largest brands represented 76% and 74%, respectively, with a split by brand as follows:
Previous wording
Our reported net sales are impacted by changes in foreign currency exchange rates as greater than 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.
Current wording
Our reported net sales are impacted by changes in foreign currency exchange rates as approximately than 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.
Previous wording
Net sales for thethree months ended September 30, 2024 increased 15.4% from thethree months ended September 30, 2023. At comparable foreign currency exchange rates, net sales increased 15.0% from the third quarter of 2023. The average dollar/euro exchange rate for the current third quarter was 1.10 compared to 1.09 in the third quarter of 2023, while the average dollar/euro exchange rate was 1.09 for thenine months ended September 30, 2024 compared to 1.08 for thenine months ended September 30, 2023. Net sales for thenine months ended September 30, 2024 increased 10.3% as compared to thenine months ended September 30, 2023.
Current wording
Net sales for thethree months ended March 31, 2025 increased 5% from thethree months ended March 31, 2024. At comparable foreign currency exchange rates, net sales increased 6% from the first quarter of 2024. The average dollar/euro exchange rate for the current first quarter was 1.05 compared to 1.09 in the first quarter of 2024.
Previous wording
The third quarter growth was in line with expectations, and we are confident in our future as we look forward to executing our plans for the remainder of 2024. Our brands are in high demand in a robust environment for the fragrance industry, and we have many exciting developments planned for the Company. We have a large number of holiday programs planned as well as the launch of the Roberto Cavalli Wild Heart duo planned for the fourth quarter. While the pace of growth in the 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.
Current wording
Thefirst quarter growth was ahead of expectations, and we are confident in our future as we look forward to executing our plans for the remainder of 2025. A new blockbuster for Ferragamo, Fiamma, debuted at the end of March 2025 and a new blockbuster, Roberto Cavalli Serpentine, will launch in the second quarter. We have a large number of brand extensions across many of our brands launching throughout the year, including a new flankers for Coach Woman, Lacoste L.12.12 and Original in the second quarter 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.
Previous wording
In the nine months ended September 30, 2024, net sales in our largest market, North America, rose 8% as compared to the prior year period, followed by increases in the Western Europe and Asia/Pacific markets of 16% and 9%, respectively. Our net sales in Central and South America and the Middle East and Africa were also robust, up 24% and 4%, respectively in the nine months ended September 30, 2024 as compared to the prior year period. Additionally, our travel retail business is continuing to strengthen. Eastern Europe was adversely impacted by sourcing constraints earlier in the year, which returned to normal business levels in the third quarter of 2024.
Current wording
In thethree months ended March 31, 2025, net sales in our largest market, North America, rose 14% as compared to the prior year period, followed by an increase in the Western Europe of 1%. Our sales in Asia/Pacific decreased slightly by 3% driven by a higher base from 2024 in Australia. Our net sales in Eastern Europe were also robust, up 46% in thethree months ended March 31, 2025 as compared to the prior year period where we faced temporary sourcing constraints. Central and South America net sales declined 10%, also off a high base in 2024 when the region grew 31%. Middle East and Africa net sales declined 16% due to macroeconomic challenges and a disproportionate impact from the exit of the Dunhill license due to its significant presence there.
Previous wording
The Company’s gross profit margin as a percentage of net sales was 63.9% and 63.6%for thethree and nine months ended September 30, 2024, respectively, as compared to 63.9% and 63.3% for the corresponding periods of the prior year. The increase in the nine month period ending September 30, 2024 as compared to the prior year period was driven bythe impact of certain one-time expenses related to inventory in 2023 partially offset by unfavorable segment, brand and channel mix in the current year. Gross profit margins remained flat from the same three month period in the prior year.
Current wording
The Company’s gross profit margin as a percentage of net sales was 63.7%for thethree months ended March 31, 2025 as compared to 62.5% for the corresponding period of the prior year. The increase in thethree months ended March 31, 2025 as compared to the prior year period was driven by favorable segment mix in the current year.
Previous wording
For European based operations, gross profit margin as a percentage of net sales was 66.2%and 66.3% for thethree and nine months ended September 30, 2024, respectively, as compared to 68.6% and 66.6% for the corresponding periods of the prior year. European based operations were negatively impacted by brand and channel mix during the three and nine months ended September 30, 2024 as compared to the prior year period.
Current wording
For European based operations, gross profit margin as a percentage of net sales was 65.5% for thethree months ended March 31, 2025, respectively, as compared to 64.0% for the corresponding period of the prior year. European based operations were positively impacted by brand and channel mix during thethree months ended March 31, 2025 as compared to the prior year period.
Previous wording
Generally, we do not bill customers for shipping and handling costs, and such costs, which aggregated $3.8 millionand $8.8 million for thethree and nine months ended September 30, 2024, respectively, as compared to $3.9 million and $11.4 million for the corresponding periods of the prior year, 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. The improvement in shipping and handling costs during the three and nine months ended September 30, 2024 as compared to corresponding periods in 2023 is a direct benefit of lower transportation costs seen globally.
Current wording
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 sales.
Previous wording
Promotion and advertising included in selling, general and administrative expenses aggregated $66.8 million and $181.5 million for thethree andnine months ended September 30, 2024, respectively, as compared to $62.8 million and $152.6 million for the corresponding periods of the prior year and represented 15.7% and 16.6% of net salesfor thethree andnine months ended September 30, 2024, respectively, as compared to 17.1% and 15.4% 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 product launches and to build brand awareness. We believe that our promotion and advertising efforts have a beneficial effect on sales. Historically, the Company incurred the majority of our promotional and advertising expenditures in the second half of the year. Beginning in 2024, the Company implemented a strategy to increase spending in the first half of the year to better support and drive business growth throughout the year. Additionally, as the first three quarters of 2024 saw a lighter innovation program than prior years, the Company focused on increasing promotional and advertising spending to support the continued success of our existing brands and to support the initial launches of our new brands, Lacoste and Roberto Cavalli. We also 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.
Current wording
Promotion and advertising included in selling, general and administrative expenses aggregated $51.5 million for thethree months ended March 31, 2025, as compared to $48.3 million for the corresponding period of the prior year and represented 15.2% of net salesfor thethree months ended March 31, 2025, as compared to 14.9% for the corresponding period of the prior year. Promotion and advertising are integral parts of our industry, and we continue to invest heavily to support new product 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.
Previous wording
Royalty expense included in selling, general and administrative expenses aggregated $34.0 million and $88.2 million for thethree and nine months ended September 30, 2024, respectively, as compared to $29.1 million and $77.2 million for the corresponding periods of the prior year. Royalty expense represented 8.0% and 8.1% of net sales for thethree and nine months ended September 30, 2024, respectively, as compared to 7.9% and 7.8% of net sales for the corresponding periods of the prior year. This increase was primarily driven by unfavorable brand mix.
Current wording
Royalty expense included in selling, general and administrative expenses aggregated $28.1 million for thethree months ended March 31, 2025, respectively, as compared to $27.2 million for the corresponding periods of the prior year. Royalty expense represented 8.3% of net sales for thethree months ended March 31, 2025 as compared to 8.4% of net sales for the corresponding periods of the prior year. This slight decrease was primarily driven by favorable brand mix.
Previous wording
As a result of the above analysis regarding net sales, gross profit margins and selling, general and administrative expenses, our operating margins aggregated 25.0% and 21.9% for thethree and nine months ended September 30, 2024, respectively, as compared to 23.7% and 23.5% for the corresponding periods of the prior year.
Current wording
As a result of the above analysis regarding net sales, gross profit margins and selling, general and administrative expenses, our operating margins aggregated 22.2% for thethree months ended March 31, 2025, respectively, as compared to 21.0% for the corresponding period of the prior year.
Previous wording
Overall, other income and expense for thenine months ended September 30, 2024, was a loss of $7.1 million as compared to a gain of $2.2 million in the corresponding prior year period. The main drivers of this change are discussed in more detail below. These include an increase in interest expense on borrowings of $0.3 million, a loss on foreign currency of $3.7 million, and a reduction of interest income related to cash and cash equivalents and short-term investments of $1.4 million. Additionally, there was a one-time gain of $3.1 million recognized in 2023 related to the sale of marketable securities.
Current wording
Overall, other income and expense for thethree months ended March 31, 2025, was a loss of $1.7 million as compared to a gain of $2.1 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 $0.8 million in the first quarter of 2025, and a gain of $0.9 million in the first quarter of 2024. Another driver of this change is the impact of our unrealized gains and losses on marketable securities where we had recordedan unrealized loss of $0.7 million in the first quarter of 2025 andan unrealized gain of $1.4 million in the first quarter of 2024. Changes in interest expense and interest income were relatively flat year-over-year.
Previous wording
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. Greater than 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 thethree and nine months ended September 30, 2024 and 2023.
Current wording
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 thethree months ended March 31, 2025 and 2024.
Previous wording
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 $2.5 million in the nine months ended September 30, 2024 compared to $3.9 million in the prior year period. As of September 30, 2024, short-term investments also include approximately $8.9 million of marketable equity securities of other companies in the luxury goods sector. In the first quarter of 2023, the Company sold marketable securities which generated a gain of $3.1 million. The Company purchased additional marketable securities throughout 2023 and in the first nine months of 2024, resulting in an unrealized loss of $0.9 million for the first nine months of 2024.
Current wording
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 $1.3 million in thethree months ended March 31, 2025 compared to $1.6 million in the prior year period. As of March 31, 2025, short-term investments also include approximately $7.3 million of marketable equity securities of other companies in the luxury goods sector. In the first quarter of 2025, the Company had unrealized losses on these securities $0.7 million on these securities compared to unrealized gains of $1.4 million for the three months ended March 31, 2024.
Previous wording
Our consolidated effective tax rate was 23.7% and 23.5% for thenine months ended September 30, 2024 and 2023, respectively. The effective tax rate for European based operations was 25.0% for both thenine months ended September 30, 2024 and 2023, while the effective tax rate for United States based operations was 19.8% for thenine months ended September 30, 2024, as compared to 18.8% 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.
Current wording
Our consolidated effective tax rate was 24.5% and 23.9% for thethree months ended March 31, 2025 and 2024, respectively. The effective tax rate for European based operations was 25.5% and 25.0% for thethree months ended March 31, 2025 and 2024, respectively, while the effective tax rate for United States based operations was 18.1% for thethree months ended March 31, 2025, as compared to 17.7% 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.
Previous wording
Net income attributable to Interparfums, Inc. was $62.3 millionand $140.1 million for thethree and nine months ended September 30, 2024, respectively, as compared to $53.2 million and $142.2 million for the corresponding periods of the prior year.
Current wording
Net income attributable to Interparfums, Inc. was $42.5 million for thethree months ended March 31, 2025 as compared to $41.0 million for the corresponding period of the prior year.
Previous wording
Net income attributable to European based operations was $54.4 millionand $132.6 million for thethree and nine months ended September 30, 2024, respectively, as compared to $46.0 million and $133.5 million for the corresponding periods of the prior year, while net income attributable to United States based operations was $24.3 millionand $49.0 million for thethree and nine months ended September 30, 2024, respectively, as compared to $20.2 million and $46.1 million for 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.
Current wording
Net income attributable to European based operations was $48.1 million for thethree months ended March 31, 2025, as compared to $44.9 million for the corresponding periods of the prior year, while net income attributable to United States based operations was $8.7 million for thethree months ended March 31, 2025, as compared to $9.5 million for 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.
Previous wording
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 thenine months ended September 30, 2024 and 2023. Net profit margins attributable to Interparfums, Inc. for thenine months ended September 30, 2024 and 2023 aggregated 12.8% and 14.4%, respectively.
Current wording
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 thethree months ended March 31, 2025 and 2024. Net profit margins attributable to Interparfums, Inc. for thethree months ended March 31, 2025 and 2024 aggregated 12.5% and 12.7%, respectively.
Previous wording
Our conservative financial tradition has enabled us to amass significant cash balances. As of September 30, 2024, we had $157.2 million in cash, cash equivalents and short-term investments, most of which are held in euro by our European based operations and is readily convertible into U.S. dollars. We have not had any liquidity issues to date, and do not expect any liquidity issues relating to such cash and cash equivalents and short-term investments.
Current wording
Our conservative financial tradition has enabled us to amass significant cash balances. As of March 31, 2025, we had $171.9 million in cash, cash equivalents and short-term investments, most of which are held in euro by our European based operations and is readily convertible into U.S. dollars. We have not had any liquidity issues to date, and do not expect any liquidity issues relating to such cash and cash equivalents and short-term investments.
Previous wording
As of September 30, 2024, working capital aggregated $617 million. Approximately 76% of the Company’s total assets are held by European based operations, and approximately $253 million of trademarks, licenses and other intangible assets are also held by European based operations.
Current wording
As of March 31, 2025, working capital aggregated $604.6 million. Approximately 78% of the Company’s total assets are held by European based operations, and approximately $277.0 million of trademarks, licenses and other intangible assets are also held by European based operations.
Previous wording
The Company hopes to continue to benefit from its strong financial position to potentially acquireone or more brands, either on a proprietary basis or as a licensee. Discussions have been underway since 2023 with a view to renewing the Van Cleef & Arpels license agreement. The license is to be renewed for an additional 9-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.
Current wording
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. Additionally, 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.
Previous wording
Cash provided by operating activities aggregated $49.7 million for thenine months ended September 30, 2024 and compared to $24.3 million for thenine months ended September 30, 2023. For thenine months ended September 30, 2024, working capital items used $147.0 million in cash from operating activities, as compared to $169.1 million in the 2023 period. Although from a cash flow perspective accounts receivables are up 41% from year end 2023, the balance is reasonable based on third quarter 2024 record sales levels and seasonality of the business. While day’s sales outstanding was 83 days, up from 71 days in the corresponding period of the prior year driven by changes in our channel mix, 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 September 30, 2024 increased 9% from year end 2023 in support of our overall sales growth as well as the building up of inventory related to the inclusion of the Lacoste and Roberto Cavalli licenses which require large inventory needs to support the launches of these brands. Additionally, as we are working to manage down our inventory levels, we have seen increased conversion of raw materials into finished goods resulting in finished goods making up 63% of our inventory levels at September 30, 2024 as compared to 58% at September 30, 2023. 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.
Current wording
Cash used in operating activities aggregated $7.4 million for thethree months ended March 31, 2025 and compared to $52.0 million for thethree months ended March 31, 2024. For thethree months ended March 31, 2025, working capital items used $72.5 million in cash from operating activities, as compared to $111.7 million in the 2024 period. Although from a cash flow perspective accounts receivables are up 8% from year end 2024, the balance is reasonable based onfirst quarter 2025 record sales levels and seasonality of the business. Day’s sales outstanding remained consistent at 74 days, up slightly from 73 days in the corresponding period of the prior year driven by changes in our channel mix, 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 March 31, 2025 increased 3% from year end 2024 in support of our overall sales growth. Additionally, as we are working to manage down our inventory levels, we have seen increased conversion of raw materials into finished goods resulting in finished goods making up 63% of our inventory levels at March 31, 2025 as compared to 55% at March 31, 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.
Previous wording
Our short-term financing requirements are expected to be met by available cash on hand at September 30, 2024, and by short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2024 consist of a $25 million unsecured revolving line of credit provided by a domestic commercial bank and approximately $8 million in credit lines provided by a consortium of international financial institutions. There was $9.0 million of short-term borrowings outstanding pursuant to these facilities as of September 30, 2024 and $4.5 million outstanding as of September 30, 2023.
Current wording
Our short-term financing requirements are expected to be met by available cash on hand at March 31, 2025, and by short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2025 consist of a $70 million unsecured revolving line of credit provided by a consortium of domestic commercial banks and approximately $8.7 million(€8 million) in credit lines provided by a consortium of international financial institutions. There was $7.6 million of short-term borrowings outstanding pursuant to these facilities as of March 31, 2025 and $8.3 million outstanding as of March 31, 2024.
Previous wording
In February 2023, the Board of Directors authorized an annual dividend of $2.50 per share. In February 2024, the Board of Directors further increased the annual dividend to $3.00 per share. The next quarterly cash dividend of $0.75 per share is payable on December 31, 2024, to shareholders of record on December 16, 2024.
Current wording
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 June 30, 2025, to shareholders of record on June 13, 2025.
Previous wording
Inflation rates in the United States and foreign countries in which we operate did not have a significant impact on operating results for thenine months ended September 30, 2024
Current wording
Inflation rates in the United States and foreign countries in which we operate did not have a significant impact on operating results for thethree months ended March 31, 2025