Interparfums, Inc.

Greetings and welcome to the Interparfumes first quarter 2023 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 the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, I'd like to turn the call over to Vice President at the Equity Group and Interparfumes Investor Relations Representative, Karen Daly.

Thank you, Daryl. 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 Interparfums undertakes no obligation to update the information discussed. It's now my pleasure to turn the call over to Jean Mazar, Chairman and Chief Executive Officer of Interparfums. Jean, you may begin.

Thank you, Karen. Good morning everyone and welcome to our first quarter conference call. As in the past, I will start the discussion and then Michel Atwood, our CFO, will review our financial performance, outlook and related issues. 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 operations, we are talking about our wholly owned domestic subsidiaries. 2023 already has the hallmarks of another spectacular year for our company. We admit that some of that exuberance is because of the strength in the fragrance market. But we also believe that our stellar performance is driven by the high-quality operations by our talented staff every day and our ability to execute sustainable innovation. This confluence resulted in the best quarterly sales in our history. Let's move on to our business by region. In North America, our largest market, net sales increased by 36%. You may recall that in last year's first quarter, a change in logistic software of one of our logistic operators tampered 2022 first quarter sales. But that resolved as we completed the year of 22% in North America last year. Western Europe and Asia Pacific also had a strong start to the year, with sales ahead 21% and 8% respectively. Our business in Central and South America is really gaining traction as sales rose 43% while Eastern Europe and the Middle East grew by 25% and 5% respectively. Our business in the duty-free sector is steadily improving and we expect to see continued momentum as the year progresses. The dollar has weakened somewhat in 2023, but the foreign exchange impact continues to provide favorability on our European-based operations, which grew sales in U.S. dollars by 26% or 29% in constant currency. An interesting point about our European-based operation is that Jimmy Choo brand sales exceeded those of Montblanc, historically our largest brand. Both brands performed exceedingly well, with net sales growth of 63% for Jimmy Choo, 28% for Montblanc. Our third largest brand coach also had a great start to the year, with sales up 24%. During this first quarter, we introduced a new Moncler collection. We introduced also a flanker for Jimmy Choo called Rose Fashion. We had also a new innovation for Kate Spade called Sherry. Rochas launched Titron Soleil. And we had another sand for the Collection Extraordinaire by Van Cleef & Arpels. In the second quarter, we will be launching Coach Green, Montblanc Explorer Platinum, Rocha's Girl Life, and in the third quarter, we've got Coach Love and new entries for the Karl Lagerfeld and Van Cleef collections. For the remainder of 2023, the pace of our product launches is expected to slow, while geographic rollout of products that debuted late in 2022 and early 2023 are expected to continue. In our US-based operations, which achieved first quarter sales growth of 19% on top of a tremendous growth of 77% growth during the first quarter of 2022, as we reported last month, gas fragrant sales approximated those of last year first quarter, when brand sales were 36% ahead of a prior year period. Additionally, while issues with the ERP implementation held back overall sales, it impacted guests disproportionately. We have received since substantial orders, shipping in the second quarter, and new guest products, including Uomo Aqua, Bella Paradiso, and the guest originals trio, unveiling in the second, third, and fourth quarters, respectively. First quarter product launches for U.S.-based operations were primarily focused on brand extension. For example, we launched Authentic Cell for Abercrombie, Canyon Sky for Hollister, Alibi for Oscar Llarenta, and Signorina Libera for Ferragamo. For the balance of the year, we have an extensive innovation program under the widely recognized DKNY and Dona Karen brands. As we said on our year-end conference call, the combination of a Donacara and NDKNY franchises is destined to be our second largest brand within our US-based operation. We also have brand extensions for MCM, Anasui and Guess, as well as offers for Ferragamo and Abercrombie, plus a brand new major launch of an entirely new line for Hollister. Yesterday evening, in conjunction with our earnings release, we announced our agreement with Abercrombie to distribute its number one men's fragrance, Gold Fierce, in selective market. The first phase of the agreement, which becomes effective on September 1, 2023, covers fierce distribution in certain major markets. The second phase, which activates in February 2024, covers distribution in additional regions and may include other flankers of a fierce family of products. Our relationship with Abercrombie began in 2014, and we have brought to market several major blockbuster pillars, including first in sync, away, and authentic. With close to a decade under our belt, we have earned Abercrombie & Fitch confidence, as evidenced by this agreement, entrusting us to distribute the iconic first collection on a test basis for three years. Our plans call for growing penetration in existing fierce markets that include department stores, specialty stores and duty-free stores, as well as online sales while exploring opportunities in untapped markets. Moving on to a notable topic across our industry, our sales in China in the first quarter were, as expected, underwhelming. About three weeks ago, I traveled to several cities in China visiting stores, distributors, and staff. Following the lift of lockdowns, we could continue to see business is improving, but at a slower pace than people expected. The one exception is the duty-free market of Hainan, where business is booming. Chinese consumers are pouring in and are buying beauty products. It is not a secret that the emphasis is and has historically been on skin care, but fragrance is growing faster. From what I could see, our Anna Sui MCM, Van Cleef & Arpels products are doing very well there and we suspect that fragrance products as a whole will become more and more relevant. The fragrance opportunity in China is still very big. However, the timing of a real breakout is much less certain. That said, the business is moving in the right direction. The younger generation of Chinese consumers are living through changing cultural customs and are not only trying but loving fragrances, more so prestigious than mass. While looking to express themselves through fragrance, fashion and accessories, we are seeing a preference into more exclusive, niche fragrances at a higher retail cost. In an effort to address their demands, We are customizing our merchandising. For example, with Graf and Van Cleef storefront expansion in China in the next year, we will tailor our efforts to take advantage of the expected growth in brand relevancy. As always, we will share additional information on future calls as we gain visibility on China. The other notable topic is supply chain. To sum it up, it is better but far from ideal. Pumps and glass components remain in short supply and as we have said for nearly two years, we are sourcing in multiple locations, ordering more and further in advance of our expected needs. As good as the first quarter was, Inventory shortfalls only permitted us to ship about 80% of orders for European-based operations and 70% of orders for our U.S.-based operations. One of the questions that keeps coming up is why we are not pursuing the newer artisanal fragrance brands. The answer is probably for the same reason we still clear of the celebrity fragrance obsession. It is just not our lane. We really know and like the prestige fragrance business, which accounts for most fragrance sales. And I think it is fair to say we like it even more these days with some of our peers peeling off fragrance brands that have decades of brand equity with multiple touch points in apparel and accessories. In a recent article in one of the beauty trade magazines, Macy's VP of Fragrance noted that our position gives us agility in product innovation and data-driven marketing tactics. Additionally, she mentioned our focus on storytelling and animation, which we continue to believe is one of our competitive advantages in the industry. We remain true to our stated goal of always seeking out new licenses or other types of agreements that expand our fragrance portfolio. Before turning the call over to Michelle, I would like to mention that we are moving up the ranks in the beauty industry according to Women's Wear Daily in its 2022 Beauty Top 100 article. We ranked number 33, up from 40. one year earlier, as a pure play fragrance manufacturer, up against larger companies that have additional beauty segments, such as cosmetics, skin care, or hair care, we are very pleased and very honored. So now we'll turn it over to Michel to review our financial performance. Michel?