What Interparfums (IPAR) Said on Its Q3 Earnings Call

Key Points

• Q3 sales were flat at $430 million, as European operations grew 4% and offset a 7% decline in U.S. operations. About $10 million in U.S. gift-set sales were delayed into Q4; excluding the delay, U.S. sales would have been flat.
• Interparfums raised its 2026 sales outlook to approximately €1.49 billion and kept its diluted earnings forecast at $4.85 per share. Management expects Q4 sales to decline 3%, including roughly two percentage points of foreign-exchange headwinds.
• Q3 gross margin expanded to 67.1% from 63.5%, aided by favorable product and channel mix and lower destruction costs. Tariff refunds also supported results, but the company does not expect material additional refunds or recurring savings in 2027.

Interparfums NASDAQ: IPAR reported flat third-quarter sales of $430 million as growth in its European-based operations offset a decline in its U.S. business, where delayed gift set shipments shifted approximately $10 million in sales into the fourth quarter.

The fragrance company moderately raised its 2026 sales outlook while maintaining its earnings forecast. Chief Financial Officer Michel Atwood said the guidance implied a 3% decline in fourth-quarter sales, including about two percentage points of foreign exchange headwinds.

For the first nine months of 2026, sales rose 1% and net income increased to $142 million, or $4.43 per diluted share, from $140 million, or $4.36 per share, a year earlier.

Regional and brand performance

Chairman and CEO Jean Madar said growth in North America, Asia Pacific, and Central and South America helped offset weaker conditions elsewhere. Nine-month sales rose 4% in North America and 12% in both Asia Pacific and Central and South America. Sales fell 15% in Eastern Europe and 19% in the Middle East and Africa.

Madar attributed the Eastern European decline to operational difficulties in certain countries and said the war in the Middle East continued to weigh on results. Atwood said the company was not seeing improvements in either region.

Among the company’s largest brands, Coach sales rose 15% year to date, including 23% growth in the third quarter. Montblanc sales increased 8% over nine months, while Jimmy Choo rose 5%. Lacoste declined 9% year to date, although its third-quarter sales returned to growth.

Atwood said the company’s seven largest brands accounted for 82% of year-to-date sales and grew 6%. Its direct-to-retail channel, representing 42% of sales, grew 8%.

Margins and shipment delays

Third-quarter gross margin expanded to 67.1% from 63.5% a year earlier. Atwood attributed the improvement primarily to favorable segment, brand and channel mix and lower destruction costs, partly offset by tariffs.

The company recognized $16.4 million in tariff refunds in its income statement for the first nine months, including $14.8 million as a nonrecurring reduction in cost of sales. Atwood said another $1.4 million in unrealized refunds would mostly be reflected in fourth-quarter cost of sales. He said the company did not expect material additional refunds or for the savings to recur in 2027.

European-based operations posted a 4% third-quarter sales increase, while U.S.-based operations declined 7%. Excluding the approximately $10 million in delayed gift set shipments, U.S. sales would have been flat, Atwood said.

Madar said gift sets are assembled in Turkey and that longer transit times contributed to the delay. To reduce the risk of a recurrence, the company plans to receive 2027 gift sets 60 to 90 days earlier, including Christmas merchandise beginning in June.

Outlook and launch pipeline

Atwood said Interparfums raised its 2026 sales outlook from EUR 1.48 billion to approximately EUR 1.49 billion and maintained its diluted earnings forecast of $4.85 per share. The earnings outlook includes the full benefit of $17.9 million in tariff refunds, which he said helped support advertising and promotion spending and offset higher-than-expected tariff and logistics costs.

The company expects full-year advertising and promotion spending to approach 21% of net sales. Atwood said he expects that level to be the norm, including in 2027, when it could be slightly higher. Formal 2027 guidance is scheduled for Nov. 18.

Interparfums is preparing new fragrances for Longchamp and Off-White in 2027, as well as a PUMA fragrance launch in the second half of that year. Madar said the company also plans new Annick Goutal fragrances and bath products in 2027.

Executives described early U.S. holiday demand as strong. Madar said sell-through was good and that he was not concerned about excess inventory at retailers or distributors, while noting that the final weeks of the year are important for store-level sales.

Atwood said higher energy and transportation costs were creating pressure, but the company was pursuing cost savings and would take price increases only where needed. Madar added that the company was not expecting major cost increases or planning price increases in 2027.

About Interparfums (NASDAQ:IPAR)

Interparfums, Inc NASDAQ: IPAR develops, manufactures and distributes prestige fragrances and related beauty products. The company operates primarily through licensing agreements with fashion, luxury and lifestyle brands, creating perfumes, colognes, body products and other fragrance-related offerings for men and women.

Its portfolio has included internationally recognized names such as Montblanc, Jimmy Choo, Coach, Kate Spade New York, Rochas, Boucheron, Van Cleef & Arpels, Oscar de la Renta and Karl Lagerfeld, although brand relationships and licensing arrangements may change over time.

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