Interparfums, Inc.

Greetings. Welcome to Interparfumes 2024 Second Quarter Earnings Call and Webcast. If anybody 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 would like to turn the call over to Karen Daly, Vice President at the Equity Group and Interparfumes Investor Relations Representative. Thank you. You may begin.

Thank you, Sherry, and good morning, everyone. Joining us on the call today will be Chairman and Chief Executive Officer, Jean Mazar, 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 its most recent annual report on Form 10-K. Forward-Looking Statements speak only as of the date on which they are made, and Interpreter Rooms undertakes no obligation to update the information discussed. As a reminder, consolidated results reflect the company's two business segments. European-based operations through their 72% owned French subsidiary headquartered in Paris into Parkinson's SA, and United States-based operations through their wholly owned subsidiaries headquartered in New York. It's now my pleasure to turn the call over to Jean Mazard. Jean, you may begin.

Thank you, Karen. Good morning, everyone, and thank you for joining today's call. The fragrance market continues to grow, but at a more modest pace than the rapid acceleration that followed the peak of the pandemic. We achieved record second quarter sales of $342 million, which comes as no surprise as we are spacing our launches to minimize potential cannibalization within our portfolio. and investing more time and money back into our industry and brand through our advertising and promotion structure. Our method is well balanced as we are working with top-tier brand ambassadors and influencers in addition to traditional media, including print, targeted ads, and product reviewers. Luxury fragrances are highly valued and sought after by younger generations, often influenced by celebrities in entertainment and sport with greater attention to superior ingredients. On the subject of celebrity ambassadors, we have engaged award-winning singer and songwriter John Legend as the face of the Mont Blanc Legend fragrance line, couldn't find a better ambassador. John Legend will front all five fragrances in the Hero collection and will remain on board for at least the next extension in January, 2026. John Legend representing the Legend franchise, he doesn't get better than that. Jimmy Choo named Chinese actress and singer Victoria Song as its global brand ambassador. and the face of the brand I Want Shoe Fragrance Line. Victoria has been the face of the Jimmy Choo brand since 2018, and now, as the brand's fragrance line model, we benefit from her significant following and impressive presence on global social commerce platforms. And finally, Coach, has expanded its partnership with Boston Celtics forward Jason Tatum, as he will now be the newest face of the coach for men's fragrance line. Following the Celtics NBA championship win, Tatum also joined Team USA in the 2024 Olympics. Tatum authentically and inspirationally embodies the brand's image and empowers the courage to be a real story in celebration of self-expression. Moving on, first-half sales in our largest market, North America, rose by 5%, with strong momentum across all channels. Retail sell-out is performing exceptionally well, and online channel growth is continuing. Western Europe and Asia-Pacific followed, where comparable half-year sales increased 11% for Western Europe and 6% for Asia. Central and South America sales growth was exceptional at 26%, thanks in great part to Lacoste fragrance sales, while our sales in the Middle East and Africa rose by 8%. Additionally, the travel retail business continued to surge after seeing an increase in both leisure and business travel earlier this year. To date, travel retail increased 20% from the prior year period, representing 8% of net sales. Longer term, we target approximately 10% of net sales to be from travel retail on an annual basis. While our business is down in Eastern Europe in the first half due to certain constraints from the first quarter, there have been recent signs of improvement, and the second quarter was broadly in line with the prior year periods. Furthermore, our business is purposefully and gradually shifting towards retailers, particularly in France, Italy, and the U.S., where we can achieve higher levels of gross mountains. who are simultaneously affording heavy investments in our vast team of distributors as they are key contributors to our business. As part of our strategy, we plan to continue to make investments behind growing markets and channels to increase our market share, including specialty stores, Sephora and Ulta, retailers like Macy's, Saks Fifth Avenue and Nordstrom, and, of course, e-commerce, through Amazon. Our Italian affiliate is performing favorably, serving as a distribution hub for all of the brands in our portfolio, particularly with the addition of direct European distribution through Amazon. Online sales have had a compelling start, not only in Italy, but also in France, in Germany, and in Spain. We are leveraging our successful U.S.-based e-commerce experience to roll out a winning Amazon strategy to capture sales across the rest of Europe. Our newest brand, Roberto Cavalli and Lacoste, are doing well and exceeding the pace of growth we targeted. While the first half of 2024 was primarily related to supplying our fragrance products to the market, we expect the brand to scale even further in the second half and into 2025. While we are and will remain primarily a licensed fragrance business, we are also in the advanced stages of the development of our own luxury fragrance collection through our French subsidiary Interparfums Essai. named Solferino Paris. This fragrance assortment will honor and celebrate Paris and the French art de vivre. With a planned launch in 2025, the collection of 10 fragrances is being created by master perfumers and will be supported by upscale merchandising and a highly selective exclusive distribution. Looking at the balance of the year, we have a number of brand extensions planned including a new fragrance duo from carla garcelle an extension of montclair and two new fragrance within the van cleef and heartfelt collection extraordinaire for lacoste we soft launched a men's blockbuster fragrance called original in paris in june and this and since we expanded internationally this fragrance is a tribute to the 1984 fragrance of the same name marking the first collaboration between Lacoste and Interparfums. Additionally, we will introduce Anna Hsu's Wild Wonder collection. We will also introduce a new collection for MCM and also new extensions for Hollister and a new line of fragrance for guests and also Roberto Cavalli's signature. We recently unveiled the new DKNY blockbuster fragrance called DKNY 24-7 that launches in select markets at the end of the second quarter and will undergo full-scale distribution next month. As we announced, discussions have been underway since 2023 with a view to renewing the license agreement with Ancliffe & Arthènes. We have been managing the fragrance brand since 2006 and appreciate the vote of confidence the brand owner Richemont has placed in us through the nine-year extension of our partnership. The new agreement will tighten the selective distribution of Van Cleef & Arpels worldwide and with special and limited edition extension, play into the ultra luxury category. The fragrance market is continuing on a path of mid-single-digit growth, and here at Interparfum, we are well-prepared and aiming to surpass the pace of the market. We are committed to our retailers, distributors, brands, and consumers, and we will continue to serve their fragrant appetite with a well-balanced pipeline of new products launched across our prestige portfolio. I will now turn the call over to Michel for a more detailed financial review.