INTERPARFUMS INC

Previous wording

We operate in the fragrance business, and manufacture, market and distribute a wide array of prestige fragrances and fragrance related products. We manage our business intwo segments, European based operations and United States based operations. Certain prestige fragrance products are produced and marketed by our European based operations through our 72% owned subsidiary in Paris, Interparfums SA, which is also a publicly traded company as 28% of Interparfums SA shares trade on the Euronext.

Current wording

We operate in the fragrance business, and manufacture, market and distribute a wide array of prestige fragrances and fragrance related products. We manage our business in two segments, European based operations and United States based operations. Certain prestige fragrance products are produced and marketed by our European based operations through our 72% owned subsidiary in Paris, Interparfums SA, which is also a publicly traded company as 28% of Interparfums SA shares trade on the Euronext.

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 72% ofnet sales for thethree months ended March 31, 2026 and 2025. We have built a portfolio of prestige brands, which include Boucheron, Coach, Goutal, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste, Lanvin, Longchamp, Moncler, Montblanc, Off-White, Rochas, Solférino and Van Cleef & Arpels, whose products are distributed in over 120 countries around the world.

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 70% and 72% of net sales for thesix months ended June 30, 2026 and 2025. We have built a portfolio of prestige brands, which include Annick Goutal, Boucheron, Coach, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste, Lanvin, Longchamp, Moncler, Montblanc, Off-White, 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 fragrance and fragrance related products. United States based operations represented 28% of net sales for thethree months ended March 31, 2026 and 2025. 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.

Current wording

Through our United States based operations, we also produce and distribute fragrance and fragrance related products. United States based operations represented 30% and 28% of net sales for thesix months ended June 30, 2026 and 2025, 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

As a percentage of net sales for thethree months ended March 31, 2026 and 2025, product sales for the Company’s largest brands represented 81% and 76%, respectively, with a split by brand as follows:

Current wording

As a percentage of net sales for thesix months ended June 30, 2026 and 2025, product sales for the Company’s largest brands represented 81% and 77%, respectively, with a split by brand as follows:

Previous wording

For the three months ended March 31, 2026, Macy's, our top retail customer, accounted for approximately 12% of net sales. No one customer represented 10% or more of net sales for the three months ended March 31, 2025.

Current wording

For thesix months ended June 30, 2026, Macy's, our top retail customer, accounted for approximately 10% of net sales. No one customer represented 10% or more of net sales for the six months ended June 30, 2025.

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 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 that 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 the components we need 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

Three Months Ended March 31, 2026 as Compared to the Three Months Ended March 31, 2025

Current wording

Three and Six Months Ended June 30, 2026 as Compared to the Three and Six Months Ended June 30, 2025

Previous wording

Net sales for thethree months ended March 31, 2026 increased 2% from thethree months ended March 31, 2025. The average dollar/euro exchange rate for the current first quarter was 1.17 compared to 1.05 in thefirst quarter of 2025, resulting in a positive foreign exchange impact on net sales of 4.6% in the three months ended March 31, 2026 as compared to the prior year period.

Current wording

Net sales for thethree months ended June 30, 2026 increased 2% from three months ended June 30, 2025. The average dollar/euro exchange rate for the current second quarter was 1.16 compared to 1.13 in the second quarter of 2025, resulting in a positive foreign exchange impact on net sales of 1% in the three months ended June 30, 2026 as compared to the prior year period. Net sales for the six months ended June 30, 2026 increased 2% as compared to thesix months ended June 30, 2025. The average dollar/euro exchange rate for the first six months of 2026 was 1.17 compared to 1.09 in the first six months of 2025, resulting in a positive foreign exchange impact on net sales of 3% in the six months ended June 30, 2026 as compared to the prior year period. The diversity of our overall brand portfolio again showed its strength as we saw strong growth from several of our larger brands which helped offset softness in other brands and geographies. The war in the Middle East, which again weighed on our results, represented a headwind of 3% in the second quarter and 2% for the first six months of the year. Excluding this effect, organic sales increased 4% in the second quarter of 2026 and 1% for the first six months of the year.

Previous wording

For European based operations, sales in thethree months ended March 31, 2026 increased 2%, compared to the corresponding period of the prior year, which included a 5.5% positive foreign exchange impact. Coach fragrance sales grew 30%, in the first quarter of 2026, following an 11% increase in the prior year period. This growth was driven by strong sell-in following the launches of new extensions within the Coach Women and Coach Men franchises, Coach Cherry and Coach Platinum, as well as sustained strong demand across most existing lines. Montblanc fragrance sales rose 14% in the first quarter of 2026, driven by the launch of Legend Elixir, the continued success of Explorer Extreme, and a lower sales base in last year's first quarter. We plan to launch a new extension for the Explorer Extreme line in the second half of the year to sustain the brand. While Jimmy Choo fragrance sales continue to grow in the United States, supported by the ongoing success of the I Want Choo franchise and the first quarter launch of Jimmy Choo Man Parfum, overall brand net sales declined 4% in the first quarter of 2026. This reflected a moderate downturn in certain European and Asian markets. Fragrance sales of Lacoste declined 12% in the first quarter of 2026 against a high base in the prior year period in which sales grew 30% behind a very successful innovation program as well as challenging market conditions primarily in Eastern Europe. We remain confident in the brand's medium and long-term potential, given recent and upcoming extensions in 2026 and planned blockbuster launches in 2027 and 2028.

Current wording

For European based operations, sales in thethree months ended June 30, 2026 decreased 4%, compared to the corresponding period of the prior year, which included an organic decline of 5% partially offset by a 1% positive foreign exchange impact. Net sales in six months ended June 30, 2026 decreased 1%, compared to the corresponding period in the prior year, despite a 3% positive foreign exchange impact. Jimmy Choo sales grew 23% in the second quarter of 2026 and 8% in the first six months of 2026. The brand’s fragrances have continued to gain traction, particularly in the United States. This growth was driven by the continued success of the I Want Choo women’s franchise, launched in 2021, combined with the successful debut of the Jimmy Choo Man Parfum line launched earlier in 2026. Coach fragrance sales declined 8%, in the second quarter of 2026, following a 42% increase in the prior year period. The brand’s sales rose 10% in the first half of 2026 compared to the prior year period driven by strong performance in the United States, its primary market, continued demand across most existing lines, and by the launch of new extensions in the Coach Women and Coach Man franchises earlier in 2026. Montblanc sales remained flat in the second quarter of 2026 and increased 6% in the first six months of 2026 compared to the prior year periods, driven by favorable exchange rates and the ongoing success of the Montblanc Explorer Extreme line and the strength of the Legend franchise, which was enhanced in the first quarter of 2026 with the launch of Montblanc Legend Elixir. We plan to launch a third franchise in 2027, reflecting the Company’s commitment to the brand’s growth through innovation. Fragrance sales of Lacoste declined 19% and 16% in the second quarter of 2026 and the first half of 2026 against a high base in the prior year periods in which sales grew 59% and 44%, respectively, driven by a series of highly successful innovation programs in 2025. Challenges in the Eastern Europe continued to impact the brand’s performance in 2026. We remain confident in the brand's medium and long-term potential ahead of several major initiatives planned for 2027 and 2028.

Previous wording

While the 2026 first quarter experienced a slight decline in organic sales, net sales grew overall, and we remain cautiously optimistic about the remainder of 2026. Looking ahead to 2027, we continue to be optimistic by the enhanced offerings within our current portfolio of brands, the introduction of new fragrances from recently acquired brands and licenses, and the selective pursuit of incremental brand opportunities. While the pace of growth in the market is starting to normalize closer to historical levels following massive growth seen over the past few years, the power of our diverse brand portfolio, in combination with our agile operating model, should help us gain market share.

Current wording

With a rich lineup of fragrance extensions planned, we remain optimistic about the remainder of 2026. Looking ahead to 2027, we continue to be optimistic by the enhanced offerings within our current portfolio of brands, the introduction of new fragrances from recently acquired brands and licenses, and the selective pursuit of incremental brand opportunities. We have a series of blockbuster launches planned for 2027 and 2028, and with the proven strength of our business model, we remain well positioned to continue growing as we navigate a dynamic operating environment.

Previous wording

In thethree months ended March 31, 2026, net sales in our largest market, North America, rose 7% as compared to the prior year period behind continued market growth, the launch of several extensions, in particular for Coach, as well as successful marketing and advertising investments, while sales in Western Europe remained flat behind slow consumer demand. Our sales in Asia/Pacific decreased by 7% driven by distribution changes we implemented in 2025 in South Korea and India, and softer consumer demand in Australia/New Zealand, which were partially compensated by strong growth in China. Central and South America net sales increased 23% due to the success of women's and men's Coach franchises and the strength of the Montblanc Legend line. Our net sales in Eastern Europe decreased 12% in thethree months ended March 31, 2026 as compared to the prior year period driven by operational difficulties in certain countries, which disproportionately impacted Lanvin and Lacoste. Middle East and Africa net sales also declined 12% primarily due to recent intensification of the conflicts in those regions.

Current wording

In thesix months ended June 30, 2026, net sales in our largest market, North America, rose 5% as compared to the prior year period, driven by continued market growth, the launch of several extensions, particularly for Coach, as well as successful marketing and advertising investments, while sales in Western Europe declined 3% due to slower consumer demand. Our sales in Asia/Pacific increased by 14% driven by brand initiatives with Coach and Montblanc and expansion of GUESS in Australia and New Zealand. Our new affiliate in Korea is off to a strong start, and after sluggish sales over the past few years, the business is growing again in the first half of 2026. Central and South America net sales increased 15% due to the success of women’s and men’s Coach franchises and the strength of the Montblanc Legend line. Our net sales in Eastern Europe decreased 7% in thesix months ended June 30, 2026 as compared to the prior year period driven by operational difficulties in certain countries, which disproportionately impacted Lanvin and Lacoste. The war in the Middle East has again led to a significant decline in our sales in the Middle East and Africa Region that was down 24%, weighting significantly on our overall results.

Previous wording

The Company’s gross profit margin as a percentage of net sales was 65.1%for thethree months ended March 31, 2026 as compared to 63.7% for the corresponding period of the prior year. The increase was the result of favorable segment, brand and channel mix as well as lower than expected destruction costs. These were partially offset by tariffs which represented an expense of $6 millionin thethree months ended March 31, 2026 as compared to the prior year period.

Current wording

The Company’s gross profit margin as a percentage of net sales was 65.5% and 65.3% for the three and six months ended June 30, 2026 as compared to 66.2% and 65.0% for the corresponding period of the prior year. The increase was the result of favorable segment, brand and channel mix as well as lower than expected destruction costs. These were partially offset by tariff impacts which represented a net expense of $8.2 million in thesix months ended June 30, 2026 as compared to the prior year period. Furthermore, as of June 30, 2026, the company has received $8.7 million in IEEPA tariff refunds, of which $6.9 million have been recognized as a non-recurring reduction in cost of sales. Overall, the Company is expecting approximately $17.6 million in refunds.

Previous wording

For European based operations, gross profit margin as a percentage of net sales was 67.4% for thethree months ended March 31, 2026, respectively, as compared to 65.5% for the corresponding period of the prior year. The increase was the result of favorable brand and channel mix as well as lower than expected destruction costs. These were partially offset by tariffs which represented an expense of $4 millionin the three months ended March 31, 2026 as compared to the prior year period.

Current wording

For European based operations, gross profit margin as a percentage of net sales was 67.4% for the three and six months ended June 30, 2026, as compared to 68.3% and 66.9% for the corresponding period of the prior year, respectively. The decrease in the three months ended June 30, 2026 was the result of unfavorable brand and channel mix, as well as higher costs related to tariffs, partially offset by one time tariff refunds. The increase in the six months ended June 30, 2026 was the result of favorable brand and channel mix, lower destruction costs, as well as $2.7 million of IEEPA tariff refunds. These were partially offset by tariffs, which represented an additional expense of $4.5 million in the six months ended June 30, 2026 as compared to the prior year period.

Previous wording

The Company’s selling, general and administrative expenses as a percentage ofnet sales were 43.6% for the three months ended March 31, 2026 ascompared to 41.6%for the three months ended March 31, 2025. The increase in selling, general and administrative expenses as a percentage of net sales in the quarter resulted from royalty costs growing ahead of sales driven by unfavorable brand mix as well higher logistics costs related to supply chain transitions and channel mix.

Current wording

The Company’s selling, general and administrative expenses as a percentage of net sales were 51.2% and 47.4% for the three andsix months ended June 30, 2026 as compared to 48.5% and 45.0% for the three andsix months ended June 30, 2025. The increase in selling, general and administrative expenses as a percentage of net sales in both the quarter and six month period resulted from marketing investments in brands, royalty costs growing ahead of sales driven by unfavorable brand mix as well higher logistics costs related to supply chain transitions and channel mix.

Previous wording

For European based operations, selling, general and administrative expenses increased 8.8%for the three months ended March 31, 2026, respectively as compared to the corresponding period of the prior year, and represented 41.4% of net sales for thethree months ended March 31, 2026, as compared to 38.7% for thethree months ended March 31, 2025. The increase in expenses was largely driven by increases in employee related costs as we are building up our Korean subsidiary and higher logistics costs related to increased warehouse fees. Royalty costs also grew ahead of sales driven by unfavorable brand mix. For United States based operations, selling, general and administrative expenses increased 2.5% for thethree months ended March 31, 2026 as compared to the corresponding period of the prior year, in line with sales increases, and represented 47.9% of net sales for thethree months ended March 31, 2026, as compared to 47.6% for thethree months ended March 31, 2025.

Current wording

For European based operations, selling, general and administrative expenses increased 7.5% andincreased 8.1% for the three andsix months ended June 30, 2026, respectively as compared to the corresponding period of the prior year, and represented 53.9% and 47.4% of net sales for the three andsix months ended June 30, 2026, as compared to 48.2% and 43.4% for the three andsix months ended June 30, 2025. The increase in expenses for both periods was largely driven by higher marketing expenses due to the timing of product launches in the second quarter of 2026 as well as investments behind the brands. Royalty costs also grew ahead of sales driven by unfavorable brand mix. Employee related costs expanded as we are building up our Korean subsidiary, and we also saw higher logistics costs related to increased warehouse fees and supply chain transitions. For United States based operations, selling, general and administrative expenses increased 8.6% andincreased 5.6% for the three andsix months ended June 30, 2026, respectively, as compared to the corresponding period of the prior year, below sales increases, and represented 44.2% and 46.0% of net sales for the three andsix months ended June 30, 2026, as compared to 48.0% and 47.8% for the three andsix months ended June 30, 2025. Despite higher selling, general and administrative investments overall, the decrease as a percentage of net sales in the three and six month periods were driven by productivity gains behind the accelerated sales growth, which were partially offset by unfavorable brand mix on royalty expenses.

Previous wording

Promotionand advertising included in selling, general and administrative expenses aggregated $51.6 million for the three months ended March 31, 2026, respectively, as compared to $51.5 million for the corresponding period of the prior year and represented 15.0% of net sales for the three months ended March 31, 2026, respectively, as compared to 15.2% 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 are also investing in line with anticipated sell out by our retailers, which we believe are higher than our reported sales. 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. 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 $77.2 million and $128.8 million for the three andsix months ended June 30, 2026, respectively, as compared to $68.8 million and $120.4 million for the corresponding period of the prior year and represented 22.6% and 18.8% of net sales for the three andsix months ended June 30, 2026, respectively, as compared to 20.6% and 17.9% 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, new brands and to build brand awareness. We believe that our promotion and advertising efforts have a beneficial effect on sales, and as such, the Company is focused on increasing promotional and advertising spending to support the continued success of our brands. We are reinvesting the tariff refunds in order to protect our top line growth and set ourselves up for a successful 2027, as such, we anticipate that on a full year basis, promotion and advertising expenditures will approach our long term target of approximately 21% of net sales.

Previous wording

Royalty expense included inselling, general and administrative expenses aggregated$31.9 million for thethree months ended March 31, 2026, respectively, as compared to $28.1 million for the corresponding period of the prior year. Royalty expense represented 9.3%of net sales for thethree months ended March 31, 2026 as compared to 8.3% 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 $30.9 million and $62.8 million for the three andsix months ended June 30, 2026, respectively, as compared to $27.7 million and $55.8 million for the corresponding period of the prior year. Royalty expense represented 9.1% and 9.2% of net sales for the three andsix months ended June 30, 2026 as compared to 8.3% of net sales for the corresponding periods of the prior year. This increase was primarily driven by unfavorable 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 21.5% for thethree months ended March 31, 2026, respectively, as compared to 22.2% for the corresponding period 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 14.4% and 17.9% for the three andsix months ended June 30, 2026, respectively, as compared to 17.7% and 20.0% for the corresponding period of the prior year.

Previous wording

Overall, other income and expense for thethree months ended March 31, 2026, was a gain of $1.1 million as compared to a loss of $1.7 million in the corresponding prior year period. The main drivers of the change are discussed in more detail below. These include the positive impact of the change in foreign currency where we recognized a loss of only $0.1 million in the first three months of 2026 compared to a loss of $0.8 million in the first three months of 2025. Additionally, we had a gain on interest income related to cash and cash equivalents and short-term investments of $1.7 million and a reduction in interest expense on borrowings of $0.1 million.

Current wording

Overall, other income and expense for the six months ended June 30, 2026, was a gain of $0.4 million as compared to a loss of $6.7 million in the corresponding prior year period. The main drivers of the change are discussed in more detail below. These include the positive impact of the change in foreign currency where we recognized a loss of only $0.2 million in the first half of 2026 compared to a loss of $2.4 million in the first half of 2025. Additionally, we had a gain on interest income related to cash and cash equivalents and short-term investments of $4.4 million and a reduction in interest expense on borrowings of $0.5 million.

Previous wording

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 $157.3 million and $176.0 million as of March 31, 2026 and December 31, 2025, respectively. Interest expense was $1.4 million in thethree months ended March 31, 2026 compared to $1.5 million in the prior year period.

Current wording

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 $142.8 million and $176.0 million as of June 30, 2026 and December 31, 2025, respectively. Interest expense was $2.6 million in thesix months ended June 30, 2026 compared to $3.1 million in the prior year period.

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. 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, 2026 and 2025.

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 and six months ended June 30, 2026 and 2025.

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 $1.6 million in thethree months ended March 31, 2026 compared to $1.3 million in the prior year period. Additionally, we recognized gains on marketable equity securities of $0.7 million in the three months ended March 31, 2026 compared a loss of $0.7 million in the three months ended March 31, 2025.

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 $3.0 million in thesix months ended June 30, 2026 compared to $2.6 million in the prior year period. Additionally, we recognized gains on marketable equity securities of $0.1 million in thesix months ended June 30, 2026 compared a loss of $3.4 million in thesix months ended June 30, 2025.

Previous wording

Our consolidated effective tax rate was 24.6% and 24.5% for thethree months ended March 31, 2026 and 2025, respectively. The effective tax rate for European based operations remained flat at 25.4% for thethree months ended March 31, 2026 as compared to 25.5% for the three months ended 2025. The effective tax rate for United States based operations was 19.7% for thethree months ended March 31, 2026, as compared to 18.1% 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 deduction-eligible 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 24.2% and 24.3% for the six months ended June 30, 2026 and 2025, respectively. The Company's effective income tax rate is primarily affected by the geographic mix of earnings among jurisdictions with different statutory tax rates, the benefit associated with the Foreign-Derived Intangible Income ("FDII") deduction, excess tax benefits related to stock-based compensation, state income taxes, and other permanent differences recognized during the period. These items collectively result in the Company's effective tax rate differing from the U.S. federal statutory rate. The company does not have a jurisdictional tax forecast but uses a forecasted tax rate by segment to validate the quarterly effective tax rate. The effective tax rate for our European based operations remained flat at 25.4% for both the six months ended June 30, 2026 and 2025. The effective tax rate for United States based operations was 20.4% for the six months ended June 30, 2026, 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 deduction-eligible 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. We also did not have any material discreet tax items this quarter nor significant changes in uncertain tax positions, valuation allowances, tax examinations, or enacted law changes. The Company was notified in June 2026 by the Internal Revenue Service that the Company will undergo an audit for the 2024 tax year.

Previous wording

Net income attributable to Interparfums, Inc. was $43.4 million for thethree months ended March 31, 2026, respectively, as compared to $42.5 millionfor the corresponding period of the prior year.

Current wording

Net income attributable to Interparfums, Inc. was $30.5 million and $73.9 million for thethree and six months ended June 30, 2026, respectively, as compared to $32.0 million and $74.5 million for the corresponding period of the prior year.

Previous wording

Net income attributable to European based operations was $49.9 million for thethree months ended March 31, 2026, as compared to $48.1 million for the corresponding period of the prior year, while net income attributable to United States based operations was $8.4 million for thethree months ended March 31, 2026, as compared to $8.7 million the corresponding period of the prior year. The 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 $22.8 million and $72.6 million for thethree and six months ended June 30, 2026, as compared to $32.7 million and $80.9 million for the corresponding period of the prior year, while net income attributable to United States based operations increased to $15.5 million and $23.9 million for the three and six months ended June 30, 2026, as compared to $9.6 million and $18.2 million for the corresponding period of the prior year. The 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 thethree months ended March 31, 2026 and 2025. Net profit margins attributable to Interparfums, Inc. for thethree months ended March 31, 2026 and 2025 aggregated 12.6% and 12.5%, 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 thesix months ended June 30, 2026 and 2025. Net profit margins attributable to Interparfums, Inc. for the six months ended June 30, 2026 and 2025 aggregated 10.8% and 11.1%, respectively.

Previous wording

Our conservative financial tradition has enabled us to amass significant cash balances. As of March 31, 2026, we had $237.1 million in cash, cash equivalents and short-term investments, the majority of which are held in euros by our European based operations and is readily convertible into U.S. dollars. We have not experienced any liquidity issues to date, and do not expect any liquidity issues relating to such cash and cash equivalents and short-term investments.

Current wording

Our conservative financial tradition has enabled us to amass significant cash balances. As of June 30, 2026, we had $211.3 million in cash, cash equivalents and short-term investments, the majority of which are held in euros by our European based operations and is readily convertible into U.S. dollars. We have not experienced any liquidity issues to date, and do not expect any liquidity issues relating to such cash and cash equivalents and short-term investments.

Previous wording

As of March 31, 2026, working capital aggregated $692 million. Approximately 79% of the Company’s total assets are held by European based operations, and approximately $285 million of trademarks, licenses and other intangible assets are also held by European based operations.

Current wording

As of June 30, 2026, working capital aggregated $664 million. Approximately 74% of the Company’s total assets are held by European based operations, and approximately $280 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 acquire one or more brands, either on a proprietary basis or as a licensee. In January 2026, we entered into long-term global licensing agreements for the creation, development and distribution of fragrances and fragrance related products under the David Beckham and Nautica brands, effective April 1, 2028 and January 1, 2030, respectively. In July 2025, our 72% owned French subsidiary, Interparfums SA, signed an exclusive fragrance license agreement with Longchamp running through December 31, 2036. Our rights under these licenses are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The first launch under our Longchamp license is expected in 2027. In June 2025, our 72% owned French subsidiary, Interparfums SA, acquired all intellectual property rights relating to Maison Goutal held by Amorepacific Europe, which is operating the Goutal brand under an existing license agreement that expired on December 31, 2025, when Interparfums SA began commercial use of the fragrance brand. Additionally, in June 2025, we renewed the Coach license agreement for an additional five-year term, extending the license through June 30, 2031.

Current wording

The Company hopes to continue to benefit from its strong financial position to potentially acquire one or more brands, either on a proprietary basis or as a licensee. In January 2026, we entered into long-term global licensing agreements for the creation, development and distribution of fragrances and fragrance related products under the David Beckham and Nautica brands, effective April 1, 2028 and January 1, 2030, respectively. In July 2025, our 72% owned French subsidiary, Interparfums SA, signed an exclusive fragrance license agreement with Longchamp running through December 31, 2036. Our rights under these licenses are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The first launch under our Longchamp license is expected in 2027. In June 2025, our 72% owned French subsidiary, Interparfums SA, acquired all intellectual property rights relating to Maison Goutal held by Amorepacific Europe, which was operating the Annick Goutal brand under an existing license agreement that expired on December 31, 2025, when Interparfums SA began commercial use of the fragrance brand. Additionally, in June 2025, we renewed the Coach license agreement for an additional five-year term, extending the license through June 30, 2031.

Previous wording

Cash provided by operating activities aggregated $0.1 million for thethree months ended March 31, 2026 compared to cash used in operating activity of $7.4 million for thethree months ended March 31, 2025. For thethree months ended March 31, 2026, working capital items used $67.3 million in cash from operating activities, as compared to $70.0 million in the 2025 period. From a cash flow perspective, accounts receivables are up 6% from year end 2025. The balance is reasonable based onfirst quarter 2026 sales levels and seasonality of the business. Days' sales outstanding increased to 78 days, up from 74 days in the corresponding period of the prior year, driven by changes in our channel mix. Despite the increase, 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, 2026 increased 7% from year end 2025. Despite the increase, we continue to drive inventory efficiencies and work to increase conversion of raw materials into finished goods, resulting in finished goods making up 64% of our inventory levels at March 31, 2026 as compared to 63% at March 31, 2025. Despite foreign exchange headwinds, our inventories are down significantly year over year with $370 million at March 31, 2026 compared to $396 million at March 31, 2025, translating to a reduction of 17 days inventory on hand.

Current wording

Cash provided by operating activities aggregated $45.7 million for thesix months ended June 30, 2026 compared to $4.5 million for thesix months ended June 30, 2025. For thesix months ended June 30, 2026, working capital items used $61.7 million in cash from operating activities, as compared to $108.9 million in the 2025 period. From a cash flow perspective, accounts receivables are down 3% from year end 2025. The balance is reasonable based on 2026 sales levels and seasonality of the business. Days' sales outstanding decreased slightly to 73 days, from 74 days in the corresponding period of the prior year, driven by changes in our channel mix. We continue to see strong collection activity and do not anticipate any issues with collections of accounts receivable. From a cash flow perspective, inventory levels as of June 30, 2026 increased 9% from year end 2025 driven by the seasonality of the business. Despite foreign exchange headwinds, our inventories are down significantly year over year with $376 million at June 30, 2026 compared to $425 million at June 30, 2025, translating to a reduction of 34 days inventory on hand as we continue to drive inventory efficiencies and work to increase conversion of raw materials into finished goods. Operating cash flow also benefited in the six months ended June 30 2026 from the receipt of $8.7 million of IEEPA tariff refunds. The Company has paid an additional $8.9 million of IEEPA tariffs which were not yet refunded at June 30, 2026, of which $8 million was received in July 2026.

Previous wording

Cash flows used in investing activities in 2026 are comprised of the net effect of purchases and sales of short-term investments. These investments consist of certificates of deposit with maturities greater thansix months, marketable equity securities and other contracts. In the first quarter of 2026, our strong cash flow position has enabled us to increase our short-term investments by $23 million compared to the year ended December 31, 2025.

Current wording

Cash flows used in investing activities in 2026 are comprised of the net effect of purchases and sales of short-term investments. These investments consist of certificates of deposit with maturities greater than six months, marketable equity securities and other contracts.

Previous wording

In March 2025, the Company paid approximately $19.7 million for the purchase of the Goutal trademark.

Current wording

In March 2025, the Company paid approximately $19.7 million for the purchase of the Annick Goutal trademark.

Previous 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 and is typically not material. 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, what we spend on tools and molds fluctuates depending on our new product development 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

Our short-term financing requirements are expected to be met by available cash on hand at March 31, 2026, and by short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2026 consist of $45 million in unsecured revolving lines of credit provided by a consortium of domestic commercial banks and approximately $9.2 million(€8 million) in credit lines provided by a consortium of international financial institutions. There was $4.6 million of short-term borrowings outstanding pursuant to these facilities as of March 31, 2026 and $7.6 million outstanding as of March 31, 2025.

Current wording

Our short-term financing requirements are expected to be met by available cash on hand at June 30, 2026, and by short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2026 consist of $45 million in unsecured revolving lines of credit provided by a consortium of domestic commercial banks and approximately $9.1 million (€8 million) in credit lines provided by a consortium of international financial institutions. There was $2.8 million of short-term borrowings outstanding pursuant to these facilities as of June 30, 2026 and $9.4 million outstanding as of June 30, 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 thethree months ended March 31, 2026; however, we have already started to see the impacts of tariffs on our cost structure and had adjusted our pricing accordingly in 2025. We continue to monitor for potential inflationary impacts as our suppliers potentially adjust their pricing as well.

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 thesix months ended June 30, 2026; however, we have already started to see the impacts of tariffs on our cost structure and had adjusted our pricing accordingly in 2025. We continue to monitor for potential inflationary impacts as our suppliers potentially adjust their pricing as well.