Interparfums (NASDAQ:IPAR) reported 2% sales growth in both the second quarter and first half of 2026, as gains in North America, Asia Pacific and Central and South America offset declines in parts of Europe and the Middle East and Africa.
Chairman and Chief Executive Officer Jean Madar said the company’s results reflected demand for its global fragrance portfolio, new product extensions and improved performance at its U.S.-based operations. Excluding headwinds related to the war in the Middle East, organic sales increased 4% in the second quarter and 1% for the first half.
Regional and Brand Performance
North America, Interparfums’ largest market, grew 5% in the first half, supported by new Coach product extensions and marketing investments. Asia Pacific sales rose 14%, aided by Coach and Montblanc initiatives, GUESS expansion in Australia and New Zealand, and the early performance of the company’s Korean affiliate. Central and South America increased 15%, led by Coach and Montblanc.
Those gains were partly offset by a 3% decline in Western Europe, a 7% decline in Eastern Europe and a 24% decline in the Middle East and Africa. Madar said the Middle East conflict continued to weigh on results, while Eastern Europe faced operational difficulties in certain markets.
Among the company’s major brands, Coach sales grew 10% during the first half, while Montblanc increased 6%, Jimmy Choo rose 8%, GUESS advanced 11%, and Ferragamo gained 17%. Ferragamo’s second-quarter sales jumped 41%, with the Signorina and Ferragamo lines benefiting from launches introduced in late 2025 and a commercial innovation program implemented in May.
Donna Karan DKNY sales rose 12% in the first half, including a 28% second-quarter increase. Madar highlighted e-commerce as a growing contributor for the brand, with Cashmere Mist deodorant continuing to generate demand through TikTok Shop and Amazon. Roberto Cavalli grew 8% in the first half, while Lacoste declined 16% against a comparison period that included strong product launches and amid pressure in Eastern Europe.
The company said its seven largest brands, which represented 81% of first-half sales, grew 6%. Its direct-to-retail channel represented 42% of sales and increased 9%.
Margins, Tariffs and Investment
Chief Financial Officer Michel Atwood said first-half gross margin expanded 30 basis points to 65.3%, aided by brand and channel mix as well as lower inventory destruction costs. The improvement was partly offset by tariffs, which added $8.2 million in expense during the first half compared with the prior year.
As of June 30, the company had received $8.7 million in refunds related to IEEPA tariffs, including $6.9 million recognized as a non-recurring reduction in cost of sales during the second quarter. Interparfums received the remaining balance of the $17.6 million in expected refunds in July, which Atwood said would benefit the third and fourth quarters.
The company expects full-year gross margin to improve by roughly 150 basis points. About 110 basis points of that improvement is expected to come from tariff refunds, with the remainder tied to mix and cost-efficiency initiatives.
Interparfums increased advertising and promotional spending to $129 million, or 18.8% of sales, in the first half. Atwood said the company intends to reinvest tariff refunds into brand support and expects full-year advertising and promotional spending to approach its long-term target of about 21% of net sales.
First-half operating profit was $123 million, producing an operating margin of 17.9%, compared with 20% in the prior-year period. Net income was unchanged at $74 million, or $2.31 per diluted share, compared with $2.32 per diluted share a year earlier.
Segment Results and Balance Sheet
European-based operations recorded a 4% second-quarter sales decline and a 1% first-half decline. The segment faced a strong prior-year comparison and saw organic sales decline 5% in both periods. First-half net income attributable to European operations was $73 million, or 15% of sales, compared with 16.6% a year earlier.
U.S.-based operations benefited from comparison to a 2025 quarter affected by weaker innovation and tariff-related supply-chain disruptions. Second-quarter sales in the segment rose 18%, including 17% organic growth, while first-half sales increased 10%. First-half net income attributable to U.S. operations increased to $24 million, or 11.4% of sales, from 9.6% in the prior year.
The company ended June with $211 million in cash equivalents and short-term investments and working capital of $664 million. Inventory declined 12% to $367.76 million, while inventory days on hand fell by 34 days to 269 days. Operating cash flow improved to $46 million in the first half from $5 million a year earlier.
Interparfums’ board also authorized a share repurchase program and approved a line of credit of up to $250 million to support potential repurchases of Inter Parfums Inc. shares, Interparfums SA shares, or both. Atwood said the company would use the authorization in a measured manner while prioritizing business investment and strategic opportunities.
Outlook and 2027 Pipeline
The company maintained its 2026 outlook for sales of approximately $1.48 billion and diluted earnings per share of $4.85. Atwood said the forecast incorporates the benefit of the $17.6 million in tariff refunds, which are expected to help fund brand investments while offsetting higher-than-expected tariffs and logistics costs.
Management expects improved growth in 2027, supported by major launches across several of its larger brands. Madar said Montblanc, Coach, GUESS and Jimmy Choo are each expected to introduce a “blockbuster” new fragrance pillar during 2027, with launches staggered across the year.
Interparfums also plans to launch Longchamp and Off-White fragrances in 2027. Madar said Longchamp has the potential to become a $100 million brand, while Off-White men’s and women’s fragrances are scheduled to launch near the end of the first quarter. The company is also preparing additional products for Rick Owens and Solférino.
Management said it remained cautious about the Middle East conflict, demand conditions in certain international markets, foreign exchange movements and potential supplier price increases. Still, executives cited the fragrance category’s resilience, a growing digital commerce opportunity and the company’s innovation pipeline as factors supporting its longer-term outlook.
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.
