Interparfums, Inc.

Greetings and welcome to the Interparfums 2023 Second Quarter Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow a formal presentation. As a reminder, I'd like to remind you that this conference is being recorded. At this time, I'd like to turn the call over to the Vice President at the Equity Group and Interparfums Investor Relations Representative, Karen Daly.

Thank you, Diego. Joining us on the call today will be Chairman and Chief Executive Officer, Jean Madar, and Chief Financial Officer, Michelle Atwood. 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 and subsequent quarterly filings on Form 10-Q. Forward Looking Statements speak only as of the date on which they are made and Interpersons undertakes no obligation to update the information discussed. It's now my pleasure to turn the call over to Jean Madar. Jean, you may begin.

Thank you Karen. Good morning everyone and welcome to our second quarter conference call. Most of us are already aware that the fragrance industry is booming and we are pleased to have seen a continuation of that momentum during the quarter. With our increasing market share, we continue to be optimistic in our upward trajectory. In fact, we continue to fire on all cylinders to meet the needs of our distributors and retailers to ensure that we not only attract but also retain both the new and very experienced consumer. On a consolidated basis, net sales increased 26% in the second quarter. This comes on top of a robust prior year period in which we had already experienced 18% growth. Beginning with our business by region, for the second quarter, our two largest regions, North America and Western Europe, increased net sales 25% and 26% respectively. In Asia, despite challenges in China, we are doing well and we grew 17%, mostly thanks to a very strong business in Southeast Asia and Australia. We also experienced significant growth in other regions, including Eastern Europe and the Middle East, up 122% and 23% respectively. We continue to see renewed life in our travel retail business, particularly in the duty-free sector, as demand for luxury and premium brands increased and digitalization of the retailing process offered a boost in sales. With respect to our European-based operation, through our 72%-owned French subsidiary called Interparfums Essai, Net sales increased 19%, primarily driven by our top-performing brands, Coach, Jimmy Choo, and Montblanc. That increased by 28% for Coach, 21% for Montblanc, and 15%, respectively, compared to the prior year. Both Dimitri and Montblanc surpassed $100 million in sales for the first six months of 2023. Montblanc sales were strong at $55 million in the quarter or $116 million for the first half of 2023. Growth drivers included the continued outperformance of the Montblanc Legend lines and the growth of the Montblanc Explorer lines, which was recently reinforced by the introduction of the Montblanc Explorer Platinum extension. Jimmy Choo sales were also formidable at 46 million in the quarter, 109 million for the first half of 2023. I Want You continued to be an international success after launching in 2021. Sales were also boosted by the debut of two flankers, Jimmy Choo I Want You Forever, and Jimmy Choo Rose Passion, which came to market in late 2022 and early 2023, respectively. Coach Sales experienced steady growth in the quarter as nearly all lines for both genders saw increased demand in addition to the new fragrances Coach Love and Coach Green. Other growth drivers were from our own brands, Lanvin, which achieved modest growth in the quarter without any new additions, and Rochasse, which saw strong sales in Eau de Rochasse, a timeless fragrance, and the launch of Rochasse Girl Life, an eco-responsible line. On the subject of Rochasse, you may have read that Interparfum ESA will now manage all the marketing and communications and licensing activities for both the fashion and the beauty business. Moving on to our U.S.-based operations, our wholly owned domestic subsidiaries, net sales increased 42% on top of a healthy 69% growth during the second quarter of 2022 from the continued success of our brands. Gas fragrance cells, which increased 30% in the quarter and across all geographies, more than made up for the challenges experienced in the first quarter from the ERP implementation. The second quarter performance in gas was driven by the cells of our newest pillars, Sedactive Blue and Womo Aqua. Touching on the ERP implementation, who are in much better shape today, while we still have to continue to train our teams and have many additional enhancements we would like to implement to fully capture the full benefits of a new system, we see light at the end of the tunnel. Our teams are working with external providers and subject matters experts weekly to ensure we remain on track. I want to take this opportunity to thank the organization for their unwavering support and hard work during this critical transition. Looking at Ferragamo fragrance, cells were strong, which we recently enriched with sister scents, Signorina and Storidisetta collections. I would like also to share that Harper's Bazaar magazine selected Ferragamo Signorina Libera in its favorite new perfumes of 2023, noting the irresistibility of a stylish, feminine-inspired bottle design. And finally, the combination of the Donna Karan and the KNY franchises has, in just one year's time, become our second-largest U.S.-based brand and experienced momentum in the quarters. Our brands are in high demand, and we have an exciting lineup of extensions across many of our brands, unveiling in the second half of the year. As previously disclosed, Abercrombie & Fitch First will be joining our portfolio, and later in the year, we expect to launch Guess Bellavita Paradiso, Karl Lagerfeld Les Parfums Matières, and Van Cleef & Arpels Té Amara. Moving on to other key themes in the fragrance industry. On the last call, I mentioned my most recent visit to China. And since then, the momentum has continued at the same pace. And we continue to see signs of incremental improvement. We anticipate modest sales growth in China for the back half of 2023 and into 2024. and we'll continue to be patient as China at this moment is a very small portion of our books. We'll continue to monitor the region, and when the time is right, we will be ready and able to deploy our expertise in order to take advantage of this immense market opportunity. Other notable topics, though both no longer a concern, are supply chain and inflation. Supply chain disruptions are mostly behind us and the inflationary impact on components has generally leveled out. A few comments on the competitive landscape before turning the call over to Michel, our CFO. Competition is favorable for us today and we are all well positioned to continue to execute on selective and strategic acquisitions as they become available. Most recently, in July, we entered into an exclusive worldwide fragrance license for the Roberto Cavalli brand, which will be managed by our extraordinary team in Italy. Our enthusiasm for this acquisition stems from the sophisticated, luxurious, and flamboyant design of Roberto Cavalli. We believe that Cavalli's fragrances and compass maximalism in this world of minimalism. And with its recognition in Europe, in the Middle East, and in America, we believe it can be a globally recognized name with appeal to contemporary customers that are both young and young at heart. We are proud to be the licensee and welcome the distinct name to our corporate to our current portfolio of brands. Going into 2024, we expect to introduce two brand extensions, followed by a blockbuster in 2025. Now, I will turn it over to Michel to review our financial performance. Michel?