INTERPARFUMS INC

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 65%,65% and 68% of net sales for 2024,2023 and 2022, 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 68%,65% and 65% of net sales for 2025,2024 and 2023, respectively. We have built a portfolio of prestige brands, which include Boucheron, Coach, Goutal, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste, Lanvin, Longchamp, Moncler, Montblanc, Rochas, Solférino and Van Cleef & Arpels, whose products are distributed in over 120 countries around the world.

Previous wording

Through our United States based operations, we also produce and distribute fragrances and fragrance related products. United States based operations represented 35%,35% and 32% of net sales in 2024,2023 and 2022, 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 fragrances and fragrance related products. United States based operations represented 32%,35% and 35% of net sales in 2025,2024 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, 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. This diversified portfolio of top brands represented 76%,73% and 71% of total sales in 2024,2023, and 2022, respectively.

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. This diversified portfolio of top brands represented 77%,76% and 73% of total sales in 2025,2024, and 2023, respectively.

Previous wording

We grow our business intwo 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 by 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.

Current wording

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.

Previous wording

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 atone of our distribution centers. For those components received atone of our distribution centers, based upon production needs, the components are subsequently sent toone of several third party fillers, which manufacture the finished product for us and then deliver them toone of our distribution centers.

Current wording

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.

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 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

We evaluate indefinite-lived intangible assets for impairment at least annually during the fourth quarter, or more frequently when events occur or circumstances change, such as an unexpected decline in sales, that would more likely than not indicate that the carrying value of an indefinite-lived intangible asset may not be recoverable. When testing indefinite-lived intangible assets for impairment, the evaluation requires a comparison of the estimated fair value of the asset to the carrying value of the asset. The fair values used in our evaluations are estimated based upon discounted future cash flow projections using a weighted average cost of capital of 9.47%. The cash flow projections are based upon a number of assumptions, including future sales levels and future cost of goods and operating expense levels, as well as economic conditions, changes to our business model or changes in consumer acceptance of our products which are more subjective in nature. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded.

Current wording

We evaluate indefinite-lived intangible assets for impairment at least annually during the fourth quarter, or more frequently when events occur or circumstances change, such as an unexpected decline in sales, that would more likely than not indicate that the carrying value of an indefinite-lived intangible asset may not be recoverable. When testing indefinite-lived intangible assets for impairment, the evaluation requires a comparison of the estimated fair value of the asset to the carrying value of the asset. The fair values used in our evaluations are estimated based upon discounted future cash flow projections using a weighted average cost of capital of 8.34%. The cash flow projections are based upon a number of assumptions, including future sales levels and future cost of goods and operating expense levels, as well as economic conditions, changes to our business model or changes in consumer acceptance of our products which are more subjective in nature. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded.

Previous wording

At December 31, 2024 indefinite-lived intangible assets aggregated $116.2 million. The following table presents the impact a change in the following significant assumptions would have had on the calculated fair value in 2024 assuming all other assumptions remained constant:

Current wording

At December 31, 2025 indefinite-lived intangible assets aggregated $153.5 million. The following table presents the impact a change in the following significant assumptions would have had on the calculated fair value in 2025 assuming all other assumptions remained constant:

Previous wording

With respect to the application of ASC topic 350-30-35-8, the Lanvin brand names and trademarks would only have a finite life to our Company if the repurchase option were exercised, and in applying ASC topic 350-30-35-8, we assumed that the repurchase option is exercised. When exercised, Lanvin has an obligation to pay the exercise price and the Company would be required to convey the Lanvin brand names and trademarks back to Lanvin. The exercise price to be received (residual value) is well in excess of the carrying value of the Lanvin brand names and trademarks, therefore no amortization is required.

Current wording

In evaluating whether the Lanvin brand names and trademarks are definite or indefinite-lived, we applied the provisions of ASC topic 350-30-35-3 and concluded that the contraction provisions related to the repurchase option, originally exercisable in 2025 and amended to 2027, constrain the useful life of the Lanvin brand names and trademarks to the Company. Thus, the asset cannot be considered indefinite-lived. If exercised, Lanvin will have an obligation to pay the exercise price and the Company will be required to convey the Lanvin brand names and trademarks back to Lanvin. Although considered finite-lived due to the contractual provisions, in accordance with ASC topic 350-30-35-8, the asset is not being amortized as the exercise price (residual value) of the intangible asset exceeds its carrying value.

Previous wording

In determining the useful life of our Lanvin brand names and trademarks, we applied the provisions of ASC topic 350-30-35-3. The only factor that prevented us from determining that the Lanvin brand names and trademarks were indefinite lived intangible assets was Item c. “Any legal, regulatory, or contractual provisions that may limit the useful life.” The existence of a repurchase option, originally in 2025 and amended to 2027, may limit the useful life of the Lanvin brand names and trademarks to the Company. However, this limitation would only take effect if the repurchase option were to be exercised and the repurchase price was paid. If the repurchase option is not exercised, then the Lanvin brand names and trademarks are expected to continue to contribute directly to the future cash flows of our Company and their useful life would be considered to be indefinite.

Current wording

If the repurchase option expires and is not exercised, then the Lanvin brand names and trademarks would be expected to contribute directly to the future cash flows of our Company and the useful life would be considered to be indefinite at such time.

Previous wording

While we believe the estimates we have made are proper and the related results of operations for the period are presented fairly in all material respects, other assumptions could reasonably be justified that would change the amount of reported net sales, cost of sales, and selling, general and administrative expenses as they relate to the provisions for anticipated sales returns, allowance for doubtful accounts and inventory obsolescence reserves. For 2024, had these estimates been changed simultaneously by 5% in either direction, our reported gross profit would have increased or decreased by approximately $0.2 million and selling, general and administrative expenses would have changed by approximately $0.1 million. The collective impact of these changes on 2024 operating income, net income attributable to Interparfums, Inc., and net income attributable to Interparfums, Inc. per diluted share would be an increase or decrease of approximately$0.2 million,$0.2 million and $0.1, respectively.

Current wording

While we believe the estimates we have made are proper and the related results of operations for the period are presented fairly in all material respects, other assumptions could reasonably be justified that would change the amount of reported net sales, cost of sales, and selling, general and administrative expenses as they relate to the provisions for anticipated sales returns, allowance for doubtful accounts and inventory obsolescence reserves. For 2025, had these estimates been changed simultaneously by 5% in either direction, our reported gross profit would have increased or decreased by approximately $0.7 million and selling, general and administrative expenses would have changed by approximately $0.1 million. The collective impact of these changes on 2025 operating income, net income attributable to Interparfums, Inc., and net income attributable to Interparfums, Inc. per diluted share would be an increase or decrease of approximately$0.8 million,$0.5 million and $0.1, respectively.

Previous wording

Net sales in 2024 increased 10% compared to 2023. At comparable foreign currency exchange rates, net sales also increased 10% in 2024, as compared to 2023, of which 9% is related to new brands. The average dollar/euro exchange rate for 2024 was 1.08, in line with 2023.

Current wording

Net sales in 2025 increased 2% compared to 2024 on a reported basis. On an organic basis, sales were also up 2% as compared to 2024 with foreign exchange gains of 2% offsetting the negative impacts of the Dunhill exit in 2024. The average dollar/euro exchange rate for 2025 was 1.13, compared to 1.08 in 2024.

Previous wording

For European based operations, gross profit margin as a percentage of net sales was 67.0%,67.2% and 68.2% in 2024,2023 and 2022, respectively. European based operations were negatively impacted by brand and channel mix. These negative impacts were partially offset by the positive impact of certainone-time expenses related to inventory in 2023. For United States based operations, gross profit margin was 57.9%, 57.0% and 54.7% in 2024, 2023 and 2022, respectively. The year-over-year increase was driven by favorable brand and channel mix.

Current wording

For European based operations, gross profit margin as a percentage of net sales was 66.1%,67.0% and 67.2% in 2025,2024 and 2023, respectively. The bulk of the 0.9% erosion in gross margin was driven by tariffs which represented $9 million in 2025. For United States based operations, gross profit margin was 58.2%, 57.9% and 57.0% in 2025, 2024 and 2023, respectively. The year-over-year increase was driven by favorable brand mix driven by the Dunhill discontinuation, channel mix, and pricing actions which more than offset the negative $4.2 million impact of tariffs.

Previous wording

Costs relating to purchase with purchase and gift with purchase promotions are reflected in cost of sales, and aggregated $61.5 million, $52.3 million and $43.1 million in 2024,2023 and 2022, respectively, and represented 4.2%,4.0% and 4.0% of net sales, respectively.

Current wording

Costs relating to purchase with purchase and gift with purchase promotions are reflected in cost of sales, and aggregated $54.6 million, $61.5 million and $52.3 million in 2025,2024 and 2023, respectively, and represented 3.7%,4.2% and 4.0% of net sales, respectively.

Previous wording

The Company’s selling, general and administrative expenses as a percentage of nets sales were 44.7%,44.6% and 45.3% in 2024,2023 and 2022, respectively. The percentage of net sales remained flat from the prior year as increased amortization cost from the addition of the Lacoste license, which represented $6 million for the year, were offset due to promotional and advertising activities by our European based operations growing slower than sales growth in 2024.

Current wording

The Company’s selling, general and administrative expenses as a percentage of nets sales were 45.5%,44.7% and 44.6% in 2025,2024 and 2023, respectively. The percentage of net sales increased by 0.8% from the prior year driven by higher promotional and advertising activities which represent 0.5% of the increase, as well as unfavorable segment mix.

Previous wording

For European based operations, selling, general and administrative expenses increased 9% and 13% in 2024 and 2023, respectively, as compared to the corresponding prior year period, and represented 46.3%,47.1% and 48.2% of net sales in 2024,2023 and 2022, respectively. The increases in expenses are in line with fluctuations in sales for European operations, primarily from increases in employee related costs due to a one-time severance payment of $2.2 million, and higher royalty costs offset bypromotion and advertising expenditures growing slower than sales. Furthermore, promotion and advertising activities originally planned for the third and fourth quarter were phased into 2025 resulting in a decrease in selling, general and administrative expenses as a percentage of net sales in 2024 as compared to 2023.

Current wording

For European based operations, selling, general and administrative expenses increased 7% and 9% in 2025 and 2024, respectively, as compared to the corresponding prior year period, and represented 46.7%,46.3% and 47.1% of net sales in 2025,2024 and 2023, respectively. The increases in selling, general and administrative expenses stem from a combination of higher promotion and advertising expenditures and the increased costs were broadly in line with fluctuations in sales on other selling, general and administrative cost buckets.

Previous wording

For United States based operations, selling, general and administrative expenses increased 14% and 35% in 2024 and 2023, respectively, as compared to the corresponding prior year period, and represented 40.5%,39.7% and 39.1% of net sales in 2024,2023 and 2022, respectively. The increases in selling, general and administrative expenses as a percentage of net sales were largely driven by continued investment in infrastructure and employee headcount to support the growth of the business as well as increased promotional and advertising spending.

Current wording

For United States based operations, selling, general and administrative expenses decreased 2% in 2025 after increasing 14% in 2024, as compared to the corresponding prior year period, and represented 42.0%,40.5% and 39.7% of net sales in 2025,2024 and 2023, respectively. While we endeavored to generate efficiencies, and were ultimately able to reduce costs overall, the increases in selling, general and administrative expenses as a percentage of net sales were largely driven by lower sales in 2025 with the discontinuation of Dunhill in 2024, as we protected promotion and advertising investments and made the choice not to reduce the infrastructure and employee headcount in light of new licenses which will be joining our portfolio in future years.

Previous wording

Promotion and advertising included in selling, general and administrative expenses aggregated $280.5 million, $261.3 million and $212.4 million in 2024,2023 and 2022, respectively. Promotion and advertising represented 19.3%,19.8% and 19.5% of net sales in 2024,2023 and 2022, respectively. 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 had a beneficial effect on sales. Additionally, as 2024 saw a lighter innovation program than in 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. As noted above, some promotion and advertising expenses were phased into 2025 for European based operations in order to further strengthen our first half of 2025. Long-term, we continue to anticipate that on a full year basis, promotion and advertising expenditures should aggregate approximately 21% of net sales.

Current wording

Promotion and advertising included in selling, general and administrative expenses aggregated $294.7 million, $280.5 million and $261.3 million in 2025,2024 and 2023, respectively. Promotion and advertising represented 19.8%,19.3% and 19.8% of net sales in 2025,2024 and 2023, respectively. 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 had a beneficial effect on sales. Additionally, as 2025 saw a lighter innovation program than in prior years, the Company focused on increasing promotional and advertising spending to protect sell-out and support the continued success of our existing brands and fuel our new brands, Lacoste and Roberto Cavalli. We also invested disproportionally in the launch and brand building of our proprietary brand, Solférino. Long-term, we continue to anticipate that on a full year basis, promotion and advertising expenditures should aggregate approximately 21% of net sales. In 2026, we expect we will continue to make progress towards this goal as we ramp up investments to support the launches of Goutal in 2026 and prepare for the launches of the new fragrances under our Longchamps license and Off-White trademark in 2027.

Previous wording

Royalty expense included in selling, general and administrative expenses aggregated $117.8 million, $103.8 million and $87.0 million in 2024,2023 and 2022, respectively. Royalty expense represented 8.1%,7.9% and 8.0% of net sales in 2024,2023 and 2022, respectively, due to changes in brand mix.

Current wording

Royalty expense included in selling, general and administrative expenses aggregated $121.7 million, $117.8 million and $103.8 million in 2025,2024 and 2023, respectively. Royalty expense represented 8.2%,8.1% and 7.9% of net sales in 2025,2024 and 2023, respectively, due to changes in brand mix.

Previous wording

The Company reviews intangible assets with indefinite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There was an impairment charge for trademarks with indefinite useful lives of $4.0 million and $6.8 million in 2024 and 2022, respectively, relating to our Rochas fashion business and an impairment charge for trademarks with indefinite useful lives of $0.9 million in 2022 relating to our Intimate trademark. There was no impairment charge for trademarks with indefinite useful lives in 2023.

Current wording

The Company reviews intangible assets with indefinite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There was an impairment charge for trademarks with indefinite useful lives of$4.0 million in 2024, relating to our Rochas fashion business. There were no impairment charges for trademarks with indefinite useful lives in 2025 and 2023.

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 18.9%,19.1% and 17.9% for the years ended December 31, 2024,2023 and 2022, respectively.

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 18.2%,18.9% and 19.1% for the years ended December 31, 2025,2024 and 2023, respectively.

Previous wording

Overall, other income and expense was a loss of $6.4 million, $1.8 million, and $0.1 million in 2024,2023, and 2022, respectively. The main drivers of the change between 2024 and 2023 are discussed in more detail below. These include an increase in interest expense on borrowings of $0.4 million, a gain on foreign currency of $0.5 million, a gain on interest income related to cash and cash equivalents and short-term investments of $0.5 million, and losses on marketable securities of $2.1 million of which $1.5 million is unrealized. Additionally, there was aone-time gain of $3.1 million recognized in 2023 related to the sale of marketable securities.

Current wording

Overall, other income and expense was a gain of $1.0 million in 2025 as compared to losses of $6.4 million, and $1.8 million in 2024, and 2023, respectively. The main drivers of the change between 2025 and 2024 are discussed in more detail below. These include a one-time gain of $7.6 million related to a debt extinguishment, a hurt on foreign currency of $3.7 million, a gain on interest income related to cash and cash equivalents and short-term investments of $1.2 million, and a reduction in interest expense on borrowings of $0.7 million.

Previous wording

Interest expense is primarily related to the financing of brand and licensing acquisitions and the financing of the headquarters of Interparfums SA. The increase in interest expense in 2024 is related to increased borrowings during the year. In December 2022, to finance the acquisition of the Lacoste trademark, the Company entered into a $51.9 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 $124.7 million (€120 million) bank loan which bears interest atone-month Euribor plus 0.75%. Approximately $83.1 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 $41.6 million (€40 million)three-year loan agreement that bears a fixed interest rate of 4.03%. The loan was used to improve our short-term cash position. Long-term debt including current maturities aggregated $157.3 million, $157.5 million and $180.0 million as of December 31, 2024,2023 and 2022, respectively.

Current wording

Interest expense is primarily related to the financing of brand and licensing acquisitions and the financing of the headquarters of Interparfums SA. The decrease in interest expense in 2025 is related to decreases in interest rates in 2025. In December 2022, to finance the acquisition of the Lacoste trademark, the Company entered into a $58.8 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 $141 million (€120 million) bank loan which bears interest at one-month Euribor plus 0.75%. Approximately $94 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%. In July 2024, the Company entered into a $47 million (€40 million) three-year loan agreement that bears a fixed interest rate of 4.03%. Additionally in June 2025, the Company entered into a$23.5 million (€20 million) three-year loan agreement that bears a fixed interest rate of 3.0% and into a $35.3 million (€30 million) three-year loan agreement which bears interest at one-month Euribor plus 0.88%. The three most recent loans were used to improve our short-term cash position. Long-term debt including current maturities aggregated $176.0 million, $157.3 million and $157.5 million as of December 31, 2025, 2024 and 2023, respectively.

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 each 2024,2023, and 2022.

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 each 2025, 2024, and 2023.

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 securities. Interest income was $4.4 million in 2024 compared to $3.9 million in 2023. As of December 31, 2024, short-term investments also include approximately $7.7 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 2024, resulting in an losses of $2.1 million during 2024, of which $1.5 million was unrealized.

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 securities. Interest income was $5.8 million in 2025 compared to $4.6 million in 2024.

Previous wording

Our consolidated effective tax rate was 24.2%,24.8% and 22.2% in 2024,2023 and 2022, respectively.

Current wording

Our consolidated effective tax rate was 23.3%,24.2% and 24.8% in 2025,2024 and 2023, respectively.

Previous wording

The effective tax rate for European based operations was 25.8%,27.3% and 25.2% in 2024,2023 and 2022, respectively. Our effective tax rate in 2023 differs from the 25% statutory rate due to aone-time tax assessment of €2.8 million ($3.1 million) included in tax expense as the result of a tax audit conducted for the 2020 and 2021 tax years.

Current wording

The effective tax rate for European based operations was 24.2%,25.8% and 27.3% in 2025,2024 and 2023, respectively. The lower effective tax rate in 2025 compared to 2024 resulted from a $3 million favorable outcome in 2025 to our mutual agreement procedure between the French and United States tax authorities in which we were able to reclaim the tax assessment paid in France in 2023. The gain was offset by a $1 million one-time tax assessment in 2025 included in the tax expense as a result of a tax audit conducted for the 2022 and 2023 tax years. Our higher effective tax rate in 2023 was driven by a one-time tax assessment of € 2.8 million ($3.1 million) included in tax expense as the result of a tax audit conducted for the 2020 and 2021 tax years, and which was recovered in 2025 as discussed above.

Previous wording

The effective tax rate for United States based operations was 20.4%,19.3% and 13.8% in 2024,2023 and 2022, respectively. Our effective tax rate 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. Additionally, in the third quarter of 2022, our United States based operations recognized aone-time tax benefit of $2.5 million associated with the 2021 Salvatore Ferragamo acquisition. At the time of the acquisition, we had not recognized a deferred tax benefit as there were uncertainties concerning its potential recoverability; however, as of September 30, 2022, recoverability was deemed likely. Other than as discussed above, we did not experience any significant changes in tax rates, and none were expected in the jurisdictions where we operate.

Current wording

The effective tax rate for United States based operations was 21.5%,20.4% and 19.3% in 2025,2024 and 2023, respectively. Our effective tax rate 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, deductions we are allowed for a portion of our foreign derived intangible income, and 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 the jurisdictions where we operate.

Previous wording

The Company estimated the effect of its foreign derived intangible income (“FDII”) and recorded a tax benefit of $2.4 million, $2.4 million and $1.5 million as of December 31, 2024,2023 and 2022, respectively. Share-based compensation resulted in a discrete tax benefit of $0.7 million, $1.2 million and $0.8 million in 2024,2023 and 2022, respectively.

Current wording

The Company estimated the effect of its foreign derived intangible income (“FDII”) and recorded a tax benefit of $2.2 million, $2.4 million and $2.4 million as of December 31, 2025,2024 and 2023, respectively. Share-based compensation resulted in a discrete tax benefit of $0.02 million, $0.7 million and $1.2 million in 2025,2024 and 2023, respectively.

Previous wording

Net income attributable to European based operations was $140.1 million, $124.0 million and $107.3 million in 2024,2023 and 2022, respectively, while net income attributable to United States based operations was $68.9 million, $63.8 million and $43.7 million in 2024,2023 and 2022, respectively. The significant fluctuations in net income for both European and United States based operations are directly related to the previous discussions relating to changes in sales, gross profit margins, selling, general and administrative expenses.

Current wording

Net income attributable to European based operations was $143.9 million, $140.1 million and $124.0 million in 2025,2024 and 2023, respectively, while net income attributable to United States based operations was $68.8 million, $68.9 million and $63.8 million in 2025,2024 and 2023, respectively. The significant fluctuations in net income for both European and United States based operations are directly related to the previous discussions relating to changes in sales, gross profit margins, 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 27.7%,28.1% and 27.9% of European based operations net income in 2024,2023 and 2022, respectively. Net profit margins attributable to Interparfums, Inc. aggregated 11.3%,11.6% and 11.1% in 2024,2023 and 2022, 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 27.4%,27.7% and 28.1% of European based operations net income in 2025,2024 and 2023, respectively. Net profit margins attributable to Interparfums, Inc. aggregated 11.3%,11.3% and 11.6% in 2025,2024 and 2023, respectively.

Previous wording

Our conservative financial tradition has enabled us to amass significant cash balances. As of December 31, 2024, we had $234.7 million in cash and 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 December 31, 2025, we had $295.2 million in cash and 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 December 31, 2024, working capital aggregated $582 million. Approximately 76% of the Company’s total assets are held by European based operations, and approximately $246 million of trademarks, licenses and other intangible assets are also held by European based operations.

Current wording

As of December 31, 2025, working capital aggregated $683 million. Approximately 78% of the Company’s total assets are held by European based operations, and approximately $293 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. In December 2024, our 72% owned French subsidiary, Interparfums SA, obtained 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 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 began shipping products in February 2024.

Current wording

In December 2024, our 72% owned French subsidiary, Interparfums SA, acquired all Off-White brand names and registered trademarks for Class 3 fragrance and cosmetic products, subject to an existing license that expired on December 31, 2025, when Interparfums SA began 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 began shipping products in February 2024.

Previous wording

Cash provided by operating activities aggregated $187.6 million, $105.8 million, and $73.0 million in 2024,2023 and 2022, respectively. In 2024, working capital items used $49.7 million in cash from operating activities, as compared to $102.0 million in 2023 and $107.7 million in 2022. Although, from a cash flow perspective, accounts receivable is up 17% from year-end 2023, the balance is reasonable based upon 2024 record sales levels. While days sales outstanding was 66 days, up from 62 days and 60 days in 2023 and 2022, respectively, 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 are up 5% in support of our overall sales growth. Inventory days on hand increased slightly to 259 days in 2024, as compared to 252 days in 2023, and 227 days in 2022, as we have built up 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 December 31, 2024 as compared to 57% and 49% at December 31, 2023 and 2022, respectively. 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 provided by operating activities aggregated $214.9 million, $187.6 million, and $105.8 million in 2025,2024 and 2023, respectively. In 2025, working capital items used $20.7 million in cash from operating activities, as compared to $51 million in 2024 and $103.2 million in 2023. Although, from a cash flow perspective, accounts receivable is up 8% from year-end 2024, the balance is reasonable based upon 2025 record sales levels. While days sales outstanding was 73 days, up from 66 days and 62 days in 2024 and 2023, respectively, 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 are down 15% and inventory days on hand decreased to 244 days in 2025, as compared to 259 days in 2024, and 252 days in 2023. These decreases are a direct result of the Company's efforts to manage down our inventory levels. We have seen increased conversion of raw materials into finished goods in recent years resulting in finished goods making up 63% of our inventory levels at both December 31, 2025 and 2024 as compared to 57% at December 31, 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 seeing the impacts of these recent inventory management efforts and will continue to work to optimize inventory levels.

Previous wording

Cash flows used in investing activities in 2024 reflect the purchases and sales of short-term investments. These investments consist of certificates of deposit with maturities greater than three months, marketable equity securities and other contracts. At December 31, 2024, approximately $2.1 million of certificates of deposit contain penalties where we would forfeit a portion of the interest earned in the event of early withdrawal.

Current wording

Cash flows used in investing activities in 2025 reflect the purchases and sales of short-term investments. These investments consist of certificates of deposit with maturities greater than three months, marketable equity securities and other contracts. At December 31, 2025, approximately $2.4 million of certificates of deposit contain penalties where we would forfeit a portion of the interest earned in the event of early withdrawal.

Previous wording

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.

Current wording

Our business is not capital intensive as we do not own any manufacturing facilities. On a full year basis, spend on tools and molds fluctuates depending on our new product development calendar and is typically not material. Capital expenditures also include amounts for office fixtures, computer equipment and industrial equipment needed at our distribution centers.

Previous wording

Cash flows used in financing activities in 2024 reflect issuances and repayment of debt and payment of dividends to stockholders.

Current wording

Cash flows used in financing activities in 2025 predominately reflect issuances and repayment of debt and payment of dividends to stockholders.

Previous wording

In July 2024, the Company entered into a $41.6 million (€40 million) three-year loan agreement that bears a fixed interest rate of 4.03%. Additionally, in December 2022, to finance Interparfums SA’s acquisition of the Lacoste trademark, Interparfums SA entered into an approximately $51.9 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.

Current wording

In June 2025, the Company entered into a $23.5 million (€20 million) three-year loan agreement that bears a fixed interest rate of 3.0% and into a $35.3 million (€30 million) three-year loan agreement that bears a variable interest rate of Euribor 1-month plus a margin of 0.88%. Additionally, in July 2024, the Company entered into a $47 million (€40 million) three-year loan agreement that bears a fixed interest rate of 4.03%.

Previous wording

Our short-term financing requirements are expected to be met by available cash on hand at December 31, 2024, and by short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2024 consist of a $70 million unsecured revolving lines of credit provided by a consortium of domestic commercial banks and approximately $8.3 million in credit lines provided by a consortium of international financial institutions. Balances due from short-term borrowings totaled $8.3 million and $4.4 million as of December 31, 2024 and 2023, respectively.

Current wording

Our short-term financing requirements are expected to be met by available cash on hand at December 31, 2025, and by short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2025 consist of $45 million unsecured revolving lines of credit provided by a consortium of domestic commercial banks and approximately $9.4 million in credit lines provided by a consortium of international financial institutions. Balances due from short-term borrowings totaled $9.4 million and $8.3 million as of December 31, 2025 and 2024, respectively.