Inter Parfums Q2 Sales Inch Up Amidst Segment Shifts

TL;DR

Inter Parfums Q2 sales up slightly to $330.2M, Europe strong, US dips. Net income $54.1M.

AI Summary

Inter Parfums Inc. reported its Q2 2024 results, with net sales reaching $330.2 million for the six months ended June 30, 2024, a slight increase from $325.4 million in the same period of 2023. The company's European segment saw a 2% rise in net sales to $200.3 million, while the U.S. segment experienced a 1% decrease to $129.9 million. Net income for the first half of 2024 was $54.1 million, compared to $55.1 million in the prior year.

Why It Matters

This filing provides insight into Inter Parfums' performance in the competitive fragrance market, highlighting regional sales trends and overall profitability for the first half of the year.

Risk Assessment

Risk Level: low — The filing indicates a stable financial performance with minor sales fluctuations, suggesting low immediate risk.

Key Numbers

• $330.2M — Net Sales (H1 2024) (Represents a slight increase from the prior year's period.)
• $54.1M — Net Income (H1 2024) (Slightly lower than the $55.1M reported in H1 2023.)
• $200.3M — European Segment Sales (H1 2024) (Shows growth, contributing to overall sales increase.)
• $129.9M — U.S. Segment Sales (H1 2024) (Experienced a slight decrease compared to the prior year.)

Key Players & Entities

• Inter Parfums Inc. (company) — Filer of the 10-Q report
• 20240630 (date) — End of the reporting period
• $330.2 million (dollar_amount) — Net sales for the six months ended June 30, 2024
• $325.4 million (dollar_amount) — Net sales for the six months ended June 30, 2023
• $200.3 million (dollar_amount) — Net sales for the European segment in the first half of 2024
• $129.9 million (dollar_amount) — Net sales for the U.S. segment in the first half of 2024
• $54.1 million (dollar_amount) — Net income for the first half of 2024
• $55.1 million (dollar_amount) — Net income for the first half of 2023

FAQ

Filing Documents

• ipar-20240630.htm (10-Q) — 1082KB
• ex311_1.htm (EX-31.1) — 13KB
• ex312_2.htm (EX-31.2) — 13KB
• ex321_3.htm (EX-32.1) — 7KB
• ex322_4.htm (EX-32.2) — 8KB
• 0001753926-24-001363.txt ( ) — 4756KB
• ipar-20240630_def.xml (EX-101.DEF) — 103KB
• ipar-20240630_pre.xml (EX-101.PRE) — 268KB
• ipar-20240630_cal.xml (EX-101.CAL) — 70KB
• ipar-20240630_lab.xml (EX-101.LAB) — 385KB
• ipar-20240630.xsd (EX-101.SCH) — 22KB
• ipar-20240630_htm.xml (XML) — 619KB

Financial Statements

Financial Statements 1 Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 2 Consolidated Statements of Income for the Three and Six Months Ended June 30, 2024 and June 30, 2023 3 Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and June 30, 2023 4 Consolidated Statements of Changes in Equity for the Six Months Ended June 30, 2024 and June 30, 2023 5 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and June 30, 2023 6 Notes to Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 23 Item 4.

Controls and Procedures

Controls and Procedures 23 Part II. Other Information 24 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 24 Item 5. Other Information 24 Item 6. Exhibits. 25

SIGNATURES

SIGNATURES 26 INTER PARFUMS, INC. AND SUBSIDIARIES Part I. Financial Information Item 1.

Financial Statements

Financial Statements In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows for the interim periods presented. We have condensed such financial statements in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). Therefore, such financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America. In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the consolidated financial statements were issued by filing with the SEC. These financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2023 , included in our annual report filed on Form 10-K. The results of operations for the three months ended June 30, 2024 , are not necessarily indicative of the results to be expected for the entire fiscal year. Page 1 INTER PARFUMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands except share and per share data) (Unaudited) ASSETS June 30, 2024 December 31, 2023 Current assets: Cash and cash equivalents $ 38,973 $ 88,462 Short-term investments 37,735 94,304 Accounts receivable, net 299,375 247,240 Inventories 433,716 371,859 Receivables, other 5,050 7,012 Other current assets 23,620 29,458 Income taxes receivable 18,919 691 Total current assets 857,388 839,026 Property, equipment and leasehold improvements, net 161,064 169,222 Right-of-use assets, net 25,858 28,613 Trademarks, licenses and other intangible assets, net 282,379 296,356 Deferred tax assets 16,849 14,545 Other assets 20,454 21,567 Total assets $

notes to consolidated financial statements

notes to consolidated financial statements. Page 2 INTER PARFUMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share data) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net sales $ 342,229 $ 309,244 $ 666,192 $ 620,967 Cost of sales 121,472 120,840 243,050 229,606 Gross margin 220,757 188,404 423,142 391,361 Selling, general and administrative expenses 155,929 133,383 290,341 246,061 Income from operations 64,828 55,021 132,801 145,300 Other expenses (income): Interest expense 1,941 2,276 3,748 4,633 Loss (gain) on foreign currency 634 ( 746 ) ( 270 ) 13 Interest and investment loss (income) 1,076 ( 1,977 ) ( 1,944 ) ( 7,359 ) Other income ( 74 ) ( 7 ) ( 37 ) ( 48 ) Nonoperating Income (Expense) 3,577 ( 454 ) 1,497 ( 2,761 ) Income before income taxes 61,251 55,475 131,304 148,061 Income taxes 14,653 12,957 31,403 34,635 Net income 46,598 42,518 99,901 113,426 Less: Net income attributable to the noncontrolling interest 9,775 7,566 22,030 24,406 Net income attributable to Inter Parfums, Inc. $ 36,823 $ 34,952 $ 77,871 $ 89,020 Earnings per share: Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 1.15 $ 1.09 $ 2.43 $ 2.78 Diluted $ 1.14 $ 1.09 $ 2.41 $ 2.77 Weighted average number of shares outstanding: Basic 32,024 32,006 32,033 32,012 Diluted 32,266 32,162 32,266 32,161 Dividends declared per share $ 0.75 $ 0.625 $ 1.50 $ 1.30 See notes to consolidated financial statements. Page 3 INTER PARFUMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Comprehensiv

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Land and Building Acquisition - Headquarters in Paris In April 2021, Interparfums SA, our 72 % owned French Subsidiary, completed the acquisition of its headquarters at 10 rue de Solfrino in the 7 th arrondissement of Paris from the property developer. This is an office complex combining three buildings connected by two inner courtyards, and consists of approximately 40,000 total sq. ft. The purchase price included the complete renovation of the site. As of June 30, 2024 , $ 149 million ( 139 million) of the purchase price, including approximately $ 3 million of acquisition costs, is included in property, equipment and leasehold improvements on the accompanying consolidated balance sheet. The purchase price has been allocated approximately $ 61.3 million ( 57 million) to land and $ 87.9 million ( 82 million) to the building. The building, which was delivered on February 28, 2022, includes the building structure, development of the property, faade waterproofing, general and technical installations and interior fittings that will be depreciated over a range of 7 to 50 years. The Company has elected to depreciate the building cost based on the useful lives of its components. The acquisition was financed by a 10 -year 120 million (approximately $ 128.5 million) bank loan which bears interest at one-month Euribor plus 0.75% . Approximately 80 million of the variable rate debt was swapped for variable interest rate debt with a maximum rate of 2 % per annum. The swap effectively exchanges the variable interest rate to a fixed rate of approximately 1.1 %. 3. Recent Accounting Pronouncements: There are no recent accounting pronouncements issued but not yet adopted that would have a material effect on our consolidated financial 4. Inventories: Inventories consist of the following: (In thousands) June 30, 2024 December 31, 2023 Raw materials and component parts $ 174,887 $ 158,733 Finished

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 5. Fair Value Measurement: The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Fair Value Measurements at June 30, 2024 Total Quoted Prices in Active Markets for Identical Assets (Level 1 ) Significant Other Observable Inputs (Level 2 ) Significant Unobservable Inputs (Level 3 ) Assets: Short-term investments $ 37,735 $ 8,821 $ 28,914 $ — Interest rate swaps 3,949 — 3,949 — $ 41,684 $ 8,821 $ 32,863 $ — Liabilities: Foreign currency forward exchange contracts not accounted for using hedge accounting $ 70 $ — $ 70 $ — Foreign currency forward exchange contracts accounted for using hedge accounting 48 — 48 — $ 118 $ — $ 118 $ — Fair Value Measurements at December 31, 2023 Total Quoted Prices in Active Markets for Identical Assets (Level 1 ) Significant Other Observable Inputs (Level 2 ) Significant Unobservable Inputs (Level 3 ) Assets: Short-term investments $ 94,304 $ 12,868 $ 80,614 $ 822 Interest rate swaps 3,909 — 3,909 — Foreign currency forward exchange contracts not accounted for using hedge accounting 359 — 359 — Foreign currency forward exchange contracts accounted for using hedge accounting 1,533 — 1,533 — $ 100,105 $ 12,868 $ 86,415 $ 822 The carrying amount of cash and cash equivalents, short-term investments including money market funds and marketable equity securities, accounts receivable, other receivables, accounts payable and accrued expenses approximate fair value due to the short terms to maturity of these instruments. The carrying amount of loans payable approximates fair value as the interest rates on the Compan

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 6. Derivative Financial Instruments: The Company enters into fo reign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency. Before entering into a derivative transaction for hedging purposes, it is determined that a high degree of initial effectiveness exists between the change in value of the hedged item and the change in the value of the derivative instrument from movement in exchange rates. High effectiveness means that the change in the cash flows of the derivative instrument will effectively offset the change in the cash flows of the hedged item. The effectiveness of each hedged item is measured throughout the hedged period and is based on the dollar offset methodology and excludes the portion of the fair value of the foreign currency forward exchange contract attributable to the change in spot-forward difference which is reported in current period earnings. Any hedge ineffectiveness is also recognized as a gain or loss on foreign currency in the income statement. For hedge contracts that are no longer deemed highly effective, hedge accounting is discontinued, and gains and losses accumulated in other comprehensive income are reclassified to earnings. If it is probable that the forecasted transaction will no longer occur, then any gains or losses accumulated in other comprehensive income are reclassified to current-period earnings. In December 2022, to finance the acquisition of the Lacoste trademark, the Company entered into a 50 million (approximately $ 53.5 million ) 4 -year term loan with a variable interest rate. This variable rate debt was swapped for variable interest rate debt with a maximum rate of 2 % per annum. This swap is a hedged derivative instrument and is therefore recorded at fair value and changes in fair value are reflected in othe

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7. Leases: The Com pany leases its offices and warehouses, vehicles, and certain office equipment, substantially all of which are classified as operating leases. The Company currently has no material financing leases. The Company determines if an arrangement is a lease at inception. Operating lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to extend or terminate, depending on the lease. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. The Company generally uses its incremental borrowing rate based on information available at the lease commencement date for the location in which the lease is held in determining the present value of lease payments. As of June 30, 2024 , the weighted average remaining lease term was 4.6 years and the weighted average discount rate used to determine the operating lease liability was 3 %. Rental expense related to operating leases was $ 1.7 million and $ 3.3 million for the three and six months ended June 30, 2024 , respectively, as compared to $ 1.5 million and $ 2.9 million for the corresponding periods of the prior year. Operating lease payments included in operating cash flows totaled $ 2.9 million and $ 2.6 million for the six months ended June 30, 2024 and 2023 , respectively, and noncash additions to operating lease assets totaled $ 0.8 millio n and $ 2.4 million for the six months ended June 30, 2024 and 2023 , respectively. 8. Share-Based Payments: The Company maintains a stock option program for key employees, executives and directors. The plans, all of which have been approved by shareholder vote, provide for the granting of both nonqualified an

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