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Interparfums, Inc. IPAR reported first-quarter 2025 results, wherein the bottom line beat the Zacks Consensus Estimate. Both earnings and sales increased year over year. The company continues to gain from sustained consumer demand for its key fragrance brands and the launch of innovative new scents.
IPAR maintained steady inventory levels while accelerating raw material conversion to finished goods in anticipation of potential supply chain constraints. To offset recent tariffs, the company is realigning its supply chain with key markets, exploring alternative sourcing outside China and planning selective price increases of 4% to 6% in August 2025.
Interparfums, Inc. Price, Consensus and EPS Surprise
Interparfums, Inc. price-consensus-eps-surprise-chart | Interparfums, Inc. Quote
IPAR’s Quarterly Performance: Key Insights
Interparfums posted quarterly earnings of $1.32 per share, which increased 4% from $1.27 reported in the prior-year period. The metric beat the Zacks Consensus Estimate, which was pegged at $1.13 per share.(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The company reported consolidated net sales of $339 million, which increased 5% from $324 million posted in the year-ago period. On an organic basis — excluding the effects of foreign exchange fluctuations and the exit of the Dunhill license — Interparfums achieved a 7% rise in net sales. This growth was primarily driven by the strong performance of Jimmy Choo, Coach and Lacoste fragrances across its European operations, alongside solid gains from Donna Karan/DKNY, MCM and Roberto Cavalli fragrances in its U.S.-based business.
In its largest markets — North America and Western Europe — the company delivered sales increases of 14% and 1%, respectively. Eastern Europe experienced a strong rebound with a 46% rise in sales, recovering from a 22% decline in the prior-year quarter that had been impacted by temporary sourcing challenges, now resolved.
In the Asia/Pacific region, sales declined by 3%, reflecting a tough year-over-year comparison. Sales in Central and South America decreased by 10%. The Middle East and Africa region posted a 16% decline, primarily due to macroeconomic headwinds and the significant impact of IPAR’s exit from the Dunhill license, which had a strong presence in that market.
Insight Into IPAR’s Costs & Margins Performance
Interparfums reported a consolidated gross margin of 63.7%, representing a 120-basis point (bps) increase compared to 62.5% in the prior-year period. This improvement was primarily driven by a positive brand and channel mix.
During the quarter, selling, general and administrative (SG&A) expenses were 41.6% of net sales, an increase of 10 bps year over year. This rise was caused by increased spending on advertising and promotional (A&P) activities, partially offset by efficiencies and scale benefits associated with other fixed SG&A items.
For IPAR’s European-based operations, SG&A expenses as a percentage of net sales declined to 38.7%, down from 39.1% in the first quarter of 2024. This improvement was primarily attributed to scale benefits in fixed costs and positive brand mix on royalties, partially offset by increased A&P investments.
In the company’s U.S.-based operations, SG&A expenses as a percentage of net sales rose by 160 bps, primarily due to higher A&P spending, among other reasons. This was somewhat countered by cost efficiencies in other SG&A areas.
During the quarter, IPAR incurred $52 million in A&P initiatives to enhance brand visibility and support new product launches — a 7% year-over-year rise. This investment represents 15.2% of net sales, up from 14.9% in the first quarter of the previous year.
The company’s operating income rose 10% to $75 million. The operating margin expanded and stood at 22.2%, up from 21% reported in the year-ago quarter.