Interparfums, Inc.

Greetings and welcome to the Interparfums 2022 fourth quarter and year-end conference call and webcast. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Karen Daly, InterPerfume's investor relations representative and president and vice president at the Equity Group. Thank you. You may begin.

Thank you, Doug. On behalf of the company, I would like to note that this conference call may contain forward-looking statements which involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from projected results. These factors may be found in the company's filings with the Securities and Exchange Commission under the headings Forward-Looking Statements and Risk Factors in their most recent annual report on Form 10-K. Forward-Looking Statements speak only as of the date on which they are made, and Interperson Inc. undertakes no obligation to update the information discussed. It is now my pleasure to turn the call over to Mr. Jean Mazar, Chairman and Chief Executive Officer of Interperson Inc. Jean, you may begin.

Thank you, Karen. Good morning, everyone, and thank you for participating in today's call. I will start the ball rolling, and later you will hear from Michelle Atwood, our CFO, who has been with us now for six months. For anyone new to Interparfums, keep in mind that when we refer to our European-based operations, we are talking about our 72% owned French subsidiary called Interparfums SA. And when we refer to our US-based operation, we are talking about our wholly owned domestic subsidiaries. 2022 will always be remembered as the year we topped 1 billion in net sales. In 2022, our sales reached $1,087,000,000 to be exact, resulting in diluted EPS of $3.78, a record year marked by a 24% increase in net sales and a 38% increase in earnings per share. 2022 will also be remembered as the year Donna Karan and VTNY Fragrances joined our portfolio as the first full year producing and selling Ferragamo fragrance and also the first full year that our Italian office was operational and finally the year in which we entered into a license agreement with Lacoste. But it wasn't Easy selling. 2022 was also a year of rampant inflation, surging dollar, holdups in transportations, component shortages, and other supply chain headaches, along with China lockdown, and of course, a war in Eastern Europe. Let's move on to business by region. First, I want to focus on North America, our largest market. You may recall that for several reasons, through the first nine months of 2022, sales were up by only 4% in North America. As we reported earlier this year, we had logistic difficulties stemming from a change in shipping software, which delayed shipments. Plus, in 2021, you may recall many U.S. customers pressed us to deliver their holiday shipments in the third quarter, fearing supply chain problems. Those two factors were the main reasons why North American sales rose 140% for the first nine months of 2021. But that flip-flopped in 2022 when a large amount of holiday gift sets initially scheduled for delivery in the first quarter, didn't get shipped until the fourth quarter, making for a huge fourth quarter comeback. We booked $147 million in sales in the final quarter, resulting in a 22% increase in 2022 North American sales for the full year. Now, for the rest of the world, Sales in Western Europe and Asia rose 28% and 19% respectively. Central and South America grew sales by 24% and the Middle East by 44%. Even Eastern Europe achieved modest sales growth of 6% despite the conflict in Ukraine and sanctions on Russia. What is notable about Eastern Europe is that through the first nine months of the year, sales were down 16%, so to be 6% ahead at FIERAD is a good turn of events. With the exception of China, our travel retail business has shown remarkable resiliency. As we have stated over the course of 2022, The strength of the dollar minimized the accomplishments of our European operation, which grew sales in US dollars by 12%, but grew 20% in constant currency. For Montblanc, we launched a new flanker called Legend Red, which contributed to a 15% sales increase in dollars, but 22% increase in constant currency. Jimmy Choo welcomed the I Want You Forever Pilar and Man Aqua, both flankers, which combined with Legacy Scents produced a 23% increase in sales in dollars, but a 29% increase in constant currency. Coach fragrance sales were up 18% in dollars and 22% in constant currency as we introduced a new men's fragrance family called Open Road and wild rose for women. Our Montclair duo was on the market for a full year while in 2021, the program debuted in a limited number of outlets late in the year. Among our other new product launches was a product for fragrance for Boucheron called Saint Goulier, Sparkle for Kate Spade, and Byzance Gold for Rochasse. Now, let's discuss U.S. operations, which achieved sales growth of 58% in 2022, and we have doubled our sales versus 2019 pre-COVID. In the U.S., we launched Uomo for men and the Sister Scents for the Bellavita Fragrance family for guests, which spurred grand sales growth by 24%. With the introduction of Alibi and continued sales of brand favorites, Oscar de la Renta brand sales rose also by 24%. And Abercrombie & Fitch enlarged the authentic and away pillars with new flankers, growing sales by 28%. And Hollister welcomed Canyon and Wave brand extensions to grow the brand's fragrance franchise by 16%. As we have said, Newer brands, such as Ferragamo, were included for all of 2022, but only in the final quarter of 2021, and Donacaran and DKNY sales were consolidated starting in July of 2022. It now appears very clearly that the combination of Donacaran and DKNY franchise will emerge as our second largest brand within U.S. operations. Starting this year, we have taken over production from the former licensee, Estée Lauder, and have been able to build inventory and gain better control over the supply chain, which in 2022 limited sales and shipments. As our guideline implies, 2023 should be an even better year with new products and brand extensions unveiling throughout the year. 2023, not unlike 2022, will be dominated by brand extension for all of our major and midsize brands, following an exceptional new product launch schedule in 2021, which included many that were delayed from 2020. As I have said on previous calls, the advantage of flankers and extensions for a successful pillar is that we can leverage the design elements, packaging, components, photography labels, as well as advertising and promotional materials across all members of the fragrance family. And the big news we announced in December was the signing of the 15-year exclusive fragrance license agreement with Lacoste, perhaps the most widely recognized sports fashion brand globally. Effective January 1, 2024, we will take over the bronze legacy fragrance collection for men and women, and our plan calls for something new to hit the market that year. For generations, the instantly identified crocodile logo has adorned sportswear, eyewear, leather goods, home goods, watches, and of course, fragrance. In fact, I recently read that when Lacoste was founded in In 1933, it was the first brand to feature a logo on its clothing. Lacoste should rank among our largest brands, having generated 2022 sales of over $100 million. As I say on every conference call, our search for additional brands, both established and rising stars, remains a priority for the company. Another piece of good news is Richemont, the owners of Montblanc, our largest brand with sales approaching $200 million, has agreed to extend our fragrance license through December 31, 2013, adding five years to our partnership. So with a seven-year window, we are better able to plan new product launches promotion and advertising, and distribution planned well into the future. While our new ERP system is hardly a fun topic, it is vitally important to our future. I will admit that we outgrew our old system faster than we could replace it, but it was worth the wait. With component suppliers, fillers, and customers across the globe, it was quite a task to keep track of inventory real-time. Today, authorized personnel can easily access from any secure device, anywhere in the world, whatever they need, from the quantities and location of goods to the status of existing orders. They can reserve goods in the cell, and we have implemented EDI for certain large customers. A major portion of the ERP system has been deployed with additional modules in the works, including more vendor portals. This was a big investment, a big headache along the way, and many problems still to solve. But the payoff, even if viscerally in the game, will be very rewarding. I don't have to tell you that the growth of the fragrance industry has been extraordinary over the past two years, and we see no sign of a slowdown. Of all the key beauty categories, fragrance is the fastest growing, far outpacing hair care, makeup, and skin care. As a pure play in fragrance, with a diverse, well-balanced, and well-recognized portfolio of brands, plus an exceptional staff who are well positioned to continue to gain market share. We now have four brands with sales ranging from 100 to 200 million, and they have been growing annual sales by double digits. Overall, our midsize brands are performing exceptionally well as well. Among the trends working in our favor and for most of our peers, is the popularity of higher concentration products and higher-priced luxury brands. In addition, while perfume has always been and continues to be a popular gift for Mother's Day, Christmas, and Valentine's Day, in recent years, more shoppers are buying fragrance for themselves. They are building fragrance wardrobes, and they are indulging in brands that may be out of reach price-wise in clothing and jewelry. Since the pandemic, fragrance buyers have grown exponentially, and when consumers start taking interest in a category, they typically stay. While our 2023 guidance barely factors in China, perhaps kicking in late in the year, the opportunity over time is enormous. I've read estimates that only 3% of the Chinese population is wearing fragrance, but those that do are young, high-end shoppers. Doing business in China has a host of challenges beyond COVID-related restrictions, China's weaker economy and sluggish store traffic. For example, it can take 8 to 12 months to be granted today a health registration on a new fragrance product. That said, if a Chinese retail and online market opens faster, and if Chinese travel retail becomes more robust, we will need to revisit the subject of guidance. But for now, we are rightfully conservative, cautious, and comfortable with our estimates. Similarly, As the year progresses, we will have better visibility as to orders and sales that may once again call for guidance adjustments. Now, I will turn the call over to Michel for a more detailed financial review. Michel?