Interparfums (NASDAQ:IPAR) executives highlighted record 2025 results and detailed how tariffs, foreign exchange, and retailer inventory behavior shaped performance during the company’s fourth-quarter earnings call. Chairman and CEO Jean Madar said the fragrance market “returned to a more historically normalized level of growth” after recent strength, while CFO Michel Atwood emphasized that operational actions and portfolio momentum helped the company navigate a volatile backdrop.
Record sales year, but margin pressure from tariffs and FX
Madar said 2025 was a record year, with sales rising to $1.49 billion, including a fourth-quarter record of $386 million. Consolidated Q4 sales increased 7% reported and 3% organically, supported by launches rolled out late in the third quarter and holiday demand.
Gross margin for 2025 declined 20 basis points to 63.6%, which Atwood attributed primarily to tariffs. He said tariffs drove about $12.8 million of higher costs in 2025, or roughly 0.9% of sales, and management partially offset the impact through brand and segment mix as well as pricing. Operating results were pressured by lower gross margin and higher advertising and promotion (A&P) investment. Fourth-quarter operating income was $28 million (7.1% margin) versus $36 million (10% margin) in the prior-year quarter, while full-year operating income declined 2% to $270 million, with operating margin down 80 basis points to 18.2%.
Brand performance: GUESS, Cavalli, Lacoste among standouts
In the U.S. segment, Q4 sales increased 4%, driven by GUESS and Donna Karan Beauty NY as well as stronger growth from Roberto Cavalli and MCM. GUESS and Donna Karan returned to growth in Q4, rising 7% and 8%, respectively. Madar credited GUESS momentum to the Iconic and Seductive franchise and the third-quarter launch of GUESS La Mia Bella Vita, while Donna Karan gains were driven mainly by Cashmere Mist and DKNY Be Delicious. For the full year, GUESS sales were flat and Donna Karan/DKNY declined 4%, which management attributed largely to unfavorable comparisons tied to 2024 launch timing.
Roberto Cavalli sales rose 33% in both Q4 and the full year in its second full year under Interparfums’ management. Madar pointed to the exclusive May–August introduction of Serpentine at Dubai Duty Free and subsequent global distribution expansion. MCM sales rose 40% in Q4 and 17% for the full year, supported by a six-scent collection launched in early 2025. Ferragamo declined 9% for the year but held steady in Q4, supported by the third-quarter launch of Sublime Leather.
European-based operations sales increased 9% in Q4 (4% organic growth and 4% favorable FX) and 7% for the year (4% organic). Madar said Coach, Lacoste, and Montblanc led Q4 performance, while Jimmy Choo, the company’s largest brand, delivered another year of growth. Jimmy Choo grew 6% in 2025, aided by I Want Choo With Love and the men’s franchise. Coach sales rose 5% in Q4 and 15% for the year, with strength across men’s and women’s lines; management also announced a five-year extension of the Coach agreement through 2031.
Lacoste was a major highlight, with sales up 23% in Q4 and 28% for the year to $108 million, exceeding management’s initial expectation of $100 million. Montblanc rose 22% in Q4, driven by Explorer Extreme and the Legend line, and finished 2025 broadly in line with 2024.
Solferino expansion and new licenses: Beckham and Nautica
Madar said the company remains optimistic about Solferino, its first proprietary ultra-luxury direct-to-consumer offering, comprising 10 premium scents. Solferino reached 40 doors worldwide by the end of 2025, with plans to add 50 more doors in the first half of 2026 and a long-term goal of up to 500 doors by the end of 2030. He also said Solferino entered the U.S. through Bloomingdale’s online and seven store locations, with additional rollout planned for the fall.
Management also discussed portfolio expansion. In January, Interparfums announced exclusive long-term worldwide fragrance licenses with David Beckham and Nautica, along with a 15-year extension of its GUESS license through 2048. Madar said the company has capacity to take on additional licenses and is working on more opportunities, though he cautioned there are “no guarantees.” Executives noted the company’s operating structure across segments and hubs enables it to manage more brands, citing plans to manage David Beckham out of Italy, Nautica out of the U.S., and Longchamp out of France.
Channels, tariffs, and efficiency initiatives
Executives described continued strength in e-commerce, citing expanded presence on Amazon and early traction on TikTok Shop, particularly for select Donna Karan/DKNY products. Travel retail sales grew 6% in 2025 and represent about 7% of total net sales, with Cavalli, Lacoste, and Coach performing well.
Operationally, Madar said the transition to 100% third-party providers for packing, shipping, warehousing, and order fulfillment is expected to be completed by the end of March. He also described efforts to shift manufacturing closer to points of sale, including moving production for three GUESS lines to Italy and redirecting component shipments from China to Europe rather than the U.S. He said that change—representing about 15% of U.S. manufacturing—generated $3.5 million in tariff savings.
On pricing, management said it took select pricing actions in the second half of 2025 averaging roughly 2% across brands, primarily in U.S. prestige and luxury. Madar said no further pricing actions are planned unless there is a “significant change in the market.” In Q&A, Atwood said promotions ticked up slightly in Q4, including more “friends and family” discounting, but characterized it as not significant and noted the category typically leans on gift sets and gifts-with-purchase rather than heavy discounting.
Cash flow, capital return, and 2026 outlook
Atwood said 2025 net income reached a record $168 million, with diluted EPS of $5.24. Fourth-quarter net income was $28 million, or $0.88 per diluted share, up 16% year over year. He highlighted a one-time $7.6 million gain tied to debt extinguishment in Q4, higher interest income as cash increased, and lower interest expense, partly offset by a foreign currency loss of $3.7 million.
Interparfums ended the period with $295 million in cash, equivalents, and short-term investments and working capital near $700 million. Inventory was down 6% year over year, with days on hand improving to 244 from 259. Operating cash flow rose to $215 million, up $27 million, and the company repurchased $14 million of shares in 2025 while maintaining an annual dividend of $3.20 per share.
For 2026, management maintained its prior outlook for sales of approximately $1.48 billion and diluted EPS of $4.85, reflecting the absence of a one-time 2025 gain, tariff impacts, and investments to develop newer brands and support the broader portfolio ahead of 2027. Executives said they expect tariffs to remain a headwind in 2026 but believe mitigation efforts and the full-year effect of August 2025 price increases can help keep gross margin flat for the year, with pressure expected earlier in 2026 and improvement later as the company laps tariff impacts and cost programs ramp.
In Q&A, Madar and Atwood reiterated the company’s conservative approach to guidance, citing limited visibility despite a strong start to 2026. They also described a “flankering” strategy for 2026, with a more significant pipeline of blockbuster launches planned for 2027 across key brands.
About Interparfums (NASDAQ:IPAR)
Interparfums, Inc is a global fragrance company that designs, manufactures and distributes a broad range of premium perfume and cosmetic products. Operating primarily through licensing agreements with established fashion and luxury brands, the company oversees every stage of product development from concept and formulation to production and global distribution. Its portfolio encompasses well-known names in the fragrance industry, including Montblanc, Coach, Jimmy Choo, Van Cleef & Arpels and Lanvin, among others.
The company’s core activities include fragrance creation, brand management and international logistics.
