Greetings, and welcome to Interparfums Inc.'s 2025 Third Quarter Conference Call and Webcast. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I'd like to turn the call over to Karin Daly, Vice President at The Equity Group and Interparfums' Investor Relations representative. Thank you. You may begin.

Thank you, operator. Joining us on the call today will be Chairman and Chief Executive Officer, Jean Madar; and Chief Financial Officer, Michel Atwood. As a reminder, 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. Forward-looking statements speak only as of the date on which they are made, and Interparfums undertakes no obligation to update the information discussed. Interparfums' consolidated results include two business segments: European-based operations through Interparfums SA, the company's 72% owned French subsidiary; and United States-based operations. It's now my pleasure to turn the call over to Jean Madar. Jean?

Thank you, Karin. Good morning, everyone. Consistent with what we started to see in the second quarter, sales continued to moderate in the third quarter as macroeconomic conditions remain uncertain. We are leaning further into innovation across our portfolio, focusing on product enhancement and new launches that better meet the dynamic preferences of consumers around the world. These efforts are backed by compelling advertising and promotional support, increase brand awareness, drive consumer penetration and strengthen our overall competitive position. As announced last month, third quarter and year-to-date sales were up 1% for both periods, with European-based operations sales rising 5% for the first quarter, building on top of last year's momentum, plus a stronger euro compared to the dollar, while U.S.-based operations sales declined 5% for the third quarter, excluding Dunhill. For our largest brand, Jimmy Choo Fragrance sales surged 16% during the quarter, largely driven by the I Want Choo fragrance family and also Jimmy Choo Man. In addition, the 6% quarter-over-quarter growth in Coach fragrance sales was fueled by its established lines and the launch of Coach Gold, while Montblanc fragrance sales dipped slightly due to innovation phasing, and Lacoste fragrances are on track for $100 million in sales this year. I would like to note that in the first 9 months of 2024, sales by U.S.-based operations rose 11% with the addition of Roberto Cavalli into our brand portfolio, setting a high bar for this year. In 2025, we are further capitalizing on this newer brand through the successful launch of Serpentine, the new feminine fragrance from Cavalli. Additionally, we are seeing increasing consumer demand in Donna Karan fragrance adjacencies such as the very popular deodorants. We also had new products roll out late in the third quarter that will mostly support fourth quarter sales in our…

Thank you, Jean, and good morning, everyone. As reported, we delivered net sales of $430 million for the third quarter, resulting in a 1% increase for both the 3 and 9 months ended September 30, 2025. The impact of foreign exchange aided our top line performance, contributing to 2 points of growth in the third quarter and 1% on a year-to-date basis. But the stronger euro also increased our cost base in the rest of the P&L and our balance sheet. Organic sales, excluding FX and Dunhill, declined 1% in the third quarter but rose 1% for the first 9 months of the year. Gross margin for the first 9 months expanded by 80 basis points to 64.4% from 63.6% during the prior year period. This was driven by favorable segment, brand and channel mix in the first 9 months of 2025. In the third quarter, however, gross margins declined by 40 basis points to 63.5%, as these favorable tailwinds were more than offset by the impact of higher tariffs on our U.S. imports, which represented about $6 million for the quarter. Although we implemented price increases and also tariff interventions, these price increases happened later in the quarter and only had a minor benefit on the results for the quarter. If we exclude the tariffs, gross margins would have improved by 100 basis points. SG&A expenses as a percentage of net sales were 38.2% and 42.4%, respectively, for the third quarter and first 9 months of 2025 as compared to 38.9% and 41.8% for the prior year periods. The decrease during the quarter and increase year-to-date reflect a more even distribution of A&P activities over the course of 2025, which totaled $66 million or 15.3% of third quarter sales and $186 million or 16.9% of year-to-date net sales, respectively.…

Okay.

[Operator Instructions] Our first question comes from the line of Ashley Helgans with Jefferies.

This is Sydney on for Ashley. Just curious if you can share a little bit more about what you're seeing heading into holiday maybe that gives you confidence or caution there? And then in terms of the price increase, I would love to hear what feedback you guys received from retailers as well as the consumers. Any extra color there would be helpful.

I can try to answer on the holiday, what do we see for the holiday. We had a strong October. We continue to sell gift sets in October. Gift sets will arrive in stores in November or December. And our forecast for November is also quite strong. So it means that retailers are continuing to buy. The inventory at store level is not high. Iwas -- we are monitoring this in department store on a daily basis. Amazon sales are starting to pick up. But of course, this type of purchase will be done in the last 2 weeks of the year. So this year, we are not worried for the holiday season. Pricing, the second part of your question is about pricing. We took a very modest pricing compared to other companies. And it was, I will say, quite well accepted. We didn't increase prices across all our brands. We selected the most prestige, the most elevated. This is where we think there is more elasticity. And we did not increase prices on the more democratic lines that we have or the more lifestyle brands that we have in the portfolio. But we didn't see too much resistance, neither from retailers, nor our consumers.

Yes. Maybe just to build on Jean. I mean, ultimately, I think everybody was expecting that with the impact of tariffs, there were going to be inevitably, some of that was going to be passed on to the consumer. I think clearly, we've seen this across the board and particularly in the U.S. in the third quarter. As I was saying before, we're seeing before year-to-date June, unit pricing, which reflects, obviously, pricing, mix and other factors was up by about 1.2% versus prior year. And we've clearly seen an acceleration in the third quarter. Our unit pricing is up close to 6% and if you really zoom into September, it's close to 7%. So definitely, there's been a lot of pricing that's been taken. It's not -- it is very selective from brand to brand, but generally speaking, we are seeing that acceleration. And it hasn't really significantly impacted units. Unit sales are roughly growing about 1%. So the market growth is driven by pricing again in this third quarter.

That's helpful. If I can maybe just poke one more in there. And apologies if I missed, but there was some talk last quarter about just shipment timing maybe shifting between Q3 and Q4. Maybe I missed if you guys mentioned kind of where that ended up shaking out?

Michel?

I mean, we've certainly seen a little bit less holiday sets being sold into the third quarter relative to what we normally see. And we have seen some of that pick up during the month of October, but it isn't significant. I think the main thing here, really, Ashley, is -- Sydney, sorry, is that we continue to see a bit of a disconnect between sell-in and sell-out there. There is -- continues to be a couple of points difference. The markets are still up. The market actually in the U.S. for the third quarter was up 7% and is up 4% on a year-to-date basis. So consumption remains very, very healthy. We're just seeing -- continuing to see a small disconnect of a couple of points between sell-in and sell-out. And not only for us, but also for our competitors. I'm sure you've all seen all of our competitors have now published their earnings. And pretty much everybody, with the exception of maybe Coty, which was an outlier on the way down, and [ Lauder ], an outlier on the way up. Everybody has been hovering around 2%, which is pretty consistent in what we posted. So overall, I think we are seeing at a macro level, this continued destocking that's impacting us. By the way, this isn't any different than what we're doing as well because if you look at our inventories, our inventories are also down as we're trying to get more efficient with our inventory. And of course, everybody is basically doing that.

Our next question comes from the line of Susan Anderson with Canaccord Genuity.

I guess maybe if you could just talk about kind of looking out over the next 2 years, you have a number of new brands rolling out. I guess, how should we think about just that growth profile in terms of what will be driving the growth? Do you think that the combination of these new brands, I guess, how much growth are you expecting them to drive as well as just continuing to grow your existing brands, whether that be the smaller ones or the larger ones?

Yes. I can try to answer. So when you look at the portfolio today, we have added two -- excuse me, three important license or purchase of trademark. One is Off-White, and we will see sales of Off-White in 2027. We bought also the business of Annick Goutal, which is a prestige line of fragrance. And you will start seeing some business in '26, but more in '27. And more important, I think the largest potential is with the license that we signed with Longchamp. Longchamp is a great bag manufacturer. As you know, we have a great journey with Coach. And we think that Longchamp has a great brand territory that we can exploit for fragrances. Longchamp will be -- can be 3 to 5 years, $100 million business. And that's what we are doing. So 2026 will be, I will say, modest because -- the growth will be modest because we will be working for the important launch at the end of '26, beginning of '27. Michel?

Yes, I would just also say that we have also added quite a lot of brands, quite a lot of large brands over the last couple of years with Cavalli, Donna Karan, Lacoste, and [ the year before ], Ferragamo. At this point in time, if we look at the portfolio that we've added these are large brands, and they're growing -- but obviously, the smaller brands in our portfolio are kind of pulling us down. So there is going to continue to be some work on cleaning up the portfolio and -- so that we can really focus on the largest brands that will drive the business more sustainably going forward.

Okay. Great. And then...

We're still seeing that GUESS, Coach, Jimmy Choo and Montblanc can go at a good pace.

And maybe if I could just add one more on the model. I guess for fourth quarter, how should we think about gross margin now that the price increases have flowed through? I think you said if it wasn't for the tariff, third quarter would have been better by 100 bps. So I guess should we expect that to be fully offset now in fourth quarter on the gross margin front?

Look, it's a great question. The reality is we've done a really great job in realigning our supply chain and looking at tariffs. There is one big item that is -- takes a lot of time to do, which is all the U.S. stuff -- all the European stuff that we import into the U.S. It's a pretty sizable business. And we've been hit not only with 10% tariff, but it's been up to 15%. It's going to take us a bit of time to basically get the cost of those tariffs down with the first sale rule, as Jean pointed out in the prepared remarks. That's going to, I think, continue to impact us in the first -- in the fourth quarter and in the first quarter of next year. It should get better in the second quarter. So no, I am expecting gross margins to slightly erode I'd say probably about 50 bps, something similar to what we saw in the third quarter.

We've reached the end of our question-and-answer session. I'd like to turn the call back over to Mr. Atwood for any closing remarks.

All right. Thank you very much, and thank you, all, for joining our call today. With this being our final conference call of the year, Jean and I extend our warmest wishes for a safe and joyful holiday season and healthy and fulfilling new year. I would like to mention that we will be hosting the Canaccord Genuity team at our corporate headquarters on December 4 for their annual [ Beauty Bus ] Tour. If you would like to participate, please feel free to reach out to the Canaccord Genuity team. If you have any additional questions, please contact Karin Daly from The Equity Group, our Investor Relations representative. And thank you, and have a great day.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.