Interparfums, Inc.

Greetings and welcome to the Interparfums, Inc. 20 and 23 fourth quarter and full year earnings conference call and webcast. At this time, all participants are in a listen-only mode. A brief 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 Karen Daly, Vice President at the Equity Group and Interparfums Investor Relations Representative. Thank you. Please go ahead.

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. Forward Looking Statements speak only as of the date on which they are made, and Interparfums undertakes no obligation to update the information discussed. As a reminder, the company's consolidated results reflect its two business segments, European-based operations and United States-based operations. Certain Prestige Fragrance products are produced and marketed by their European-based operations through its 72% owned French subsidiary, Interparfums S.A. When the company refers to their U.S.-based operations, they are talking about their wholly owned subsidiaries. It is now my pleasure to turn the call over to Mr. Jean Mazar. Jean, you may begin.

Thank you, Karine. Good morning, everyone, and thank you for participating in today's call. We are seeing ongoing momentum in the fragrance market, particularly within the prestige and premium category in which we play. Much of the growth we have seen can be attributed to premiumization as consumers are increasingly seeking high quality, and higher concentration fragrances in today's market. The ongoing demand in our prestige portfolio of brands led to a record net sales of $1.3 billion in 2023, an increase of 21% compared to 2022. At comparable foreign currency exchange rates, Net sales increased 20% in 2023, of which 5% was related to new brands. Similar to 2022, our successful growth during the year was attributable to our established brands and our new product pipeline dominated by extensions. Sales for each of our largest brands, Jimmy Choo, Montblanc, and coach rose above $200 million for the year, representing 49% of our total sales. Our fourth largest brand, Guess, grew sales by a robust 23%. And with a strategically planned pipeline of innovation, we believe Guess is well on its way to also surpassing 200 million sales in the coming years. In our European brands, there were also significant gains made by our mid-sized brands in 2023, including Rochas, Karl Lagerfeld, Van Cleef & Arpels, increasing respectively 11%, 24%, and 12%. As you may recall, Donna Karan-DKNY joined us in July 2022. This explains the significant 200% growth in 2023. We anticipate that the substantial growth rate will normalize but will remain healthy and the brand will well exceed 100 million in sales in 2024 as it continues to benefit from our expertise. Relative to our newest brand, we began shipping Lacoste fragrance in January of this year after rebooting the brand's existing fragrance portfolio and creating all new, freshly developed goods for our retail partners and consumers alike. Our Cavalli fragrance reboot coincides with the fashion house renaissance efforts to invent the powerful creativity of their apparel, while opening new stores and increasing visibility. We have blockbuster launches in the works for both brands later this year. As you may recall, our entry into Italian operations in 2021 was strategically timed coinciding with the signing of the Ferragamo license. This decision, I think, was well-founded as the Italian fragrance market witnessed a plus 12% sales growth in 2023. In fact, Ferragamo fragrance sales had performed the market, achieving 21% sales growth in the last year. Cosmetica Italia noted that they expect to see similar sales expansion in 2024. While we have seen new entrants into the Italian market across the industry recently, driving healthy competition, we are confident our Italian affiliate will take advantage of the booming demand in Italy and across its borders. We have also leveraged this new affiliate to serve as an anchor point to attract other Italian brands and increase company scale. After starting to distribute all the brands from the United States-based operation in January 2023, our team in Italy has also started to distribute the brands from our European-based operation since January 2021. With our Italian operations managing our distribution for both segments, we will expand cross-company synergies in that market and continue to improve gross margin as we sell directly rather than for a distributor. The team in Italy also started shipping Roberto Cavalli's fragrance at the beginning of February 2024, and we look forward to fully capturing the potential of this brand. Abercrombie & Fitch also achieved significant sales growth of 25% in 2023, in part due to the sustained popularity of their legacy scents, Our initial success in the Phase 1 distribution rollout of FIRST was a leading contributor to the brand's growth in the back half of the year, and we expect to see further sales expansion as we commence Phase 2 in the first quarter of this year. On another note, I've spent a lot of time traveling to meet with retailers, buyers, and wholesalers across the globe. 2024 is off to a great start. In fact, I recently visited Mexico to meet with buyers, and I was very encouraged by what I saw, including empty shelves representing healthy sell-outs, particularly for Ferragamo, Montblanc, Guess, and DKNY. With the holiday season behind us and strong reorders, We are enthusiastic of the growth prospects in that region. Turning to our stimulating pipeline of innovation, during the first quarter of 2024, we debuted new fragrance collection. For Montclair, we introduced five new ultra-luxurious unisex fragrances called Les Sommets Montclair. And we developed also a premium collection quartet of eau de parfum for Donna Karan called Kashmir Collection. These layered and more concentrated fragrances were unveiled in conjunction with the relaunch of Donna Karan fashion business and the reveal of the Spring 2024 campaign. These premium fragrances debuted in more than 200 department stores across the United States. We have an invigorating lineup of products set for the balance of 2024. In addition to the new blockbuster fragrance for Cavalli & Lacoste I mentioned earlier, there is a new guest fragrance planned for the second quarter, as well as a Romo flanker in the first quarter. Extensions of Jimmy Choo Iron Shoe, Montblanc Legend, Koch Dreams, and Roberto Cavalli Signature are set to debut throughout the year. Furthermore, brand extensions are also in the works for Ferragamo, MCM, Abercrombie, Hollister, and Oscar de la Renta. With ongoing innovation in the development and marketing of our portfolio of fragrances, coupled with the overall strength in the fragrance market, we are poised for a dynamic year ahead. we have successfully onboarded over 18 new team members just for our United States-based operations, exemplifying our unwavering commitment to developing robust operations capable of effectively managing and optimizing our diverse portfolio of prestige brands. In the ever-changing world of beauty, fragrance innovation is at the forefront for our brand's ethos. With category penetration on the rise in the United States and in Asia, and the continued shift towards more premium fragrances, we believe that the consumer's heightened appreciation and curiosity for fragrances will be a compelling force for the future. I will now turn the call over to Michel for a more detailed financial review. Michel?