Q2 2024 Inter Parfums Inc Earnings Call

Speaker Change: Greetings. Welcome to Inter Parfums.

Operator: 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 Karin Daly, Vice President at the Equity Group and Inter Parfums Investor Relations Representative. Thank you. You may begin.

2024 Second Quarter Earnings Call and Webcast.

Speaker Change: If anybody should require operator assistance during the conference, please press star zero on your telephone keypad.

Karin Daly: As a reminder, this conference is being recorded. At this time, I would like to turn the call over to Karin Daly, Vice President at the Equity Group and Inter Parfums Investor Relations Representative. Thank you. You may begin.

Karin Daly: Karin Daly, Vice President of the Equity Group, and Inter Parfums investor relations representative.

Karin Daly: Thank you and may begin. Thank you, Sherry, and good morning, everyone. Joining us on the call today will be Chairman and Chief Executive Officer Jean Madar and Chief Financial Officer Michel Atwood.

Karin Daly: Thank you, Sherry, and good morning, everyone. Joining us on the call today will be Chairman and Chief Executive Officer Jean Madar and Chief Financial Officer Michel 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.

Karin Daly: Thank you, Sherri, and good morning, everyone.

Speaker Change: Joining us on the call today will be Chairman and Chief Executive Officer Jean Madar and Chief Financial Officer Michel Atwood.

Karin Daly: On behalf of the company, I would like to note that this conference call may continue 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.

Speaker Change: 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.

Speaker Change: 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 .

Karin Daly: Forward-looking statements speak only as of the day on which they are made, and Inter Parfums undertakes no obligation to update the information discussed.

Karin Daly: Forward-looking statements speak only as of the date on which they are made, and Inter Parfums 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, Inter Parfums SA, and United States-based operations through their wholly owned subsidiaries headquartered in New York.

Interpret Rooms: Forward-looking statements speak only as of the date on which they are made, and Inter Parfums undertakes no obligation to update the information discussed.

Karin Daly: As a reminder, consolidated results reflect the company's two business segments: European-based operations through their 72%-owned French subsidiary headquartered in Paris, Inter Parfums SA, and United States-based operations through their wholly owned subsidiaries headquartered in New York.

Interpret Rooms: As a reminder,

Speaker Change: Consolidated results reflect the company's two business segments, European-based operations through their 72% owned French subsidiary headquartered in Paris, Inter Parfums SA, and United States-based operations through their wholly owned subsidiaries headquartered in New York.

Karin Daly: It's now my pleasure to turn the call over to Jean Madar. Jean, you may begin.

Speaker Change: It's now my pleasure to turn the call over to Jean Madar. Jean, you may begin.

Jean Madar: Thank you, Karin, 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 brands through our Advertising and Promotions Club. 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.

Jean Madar: Thank you, Karen.

Jean Madar: 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 workforce video, 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 ad, and product reviewers.

Jean Madar: Thank you Karin, good morning everyone, and thank you for joining today's call.

Speaker Change: The fragrance market continues to grow but at a more modest pace than the rapid acceleration that followed the peak of the pandemic.

Speaker Change: We achieved record second quarter sales of $342 million.

Speaker Change: 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 brands through our

Speaker Change: Advertising and Promotion Structure.

Speaker Change: Our method is well balanced.

Speaker Change: as we are working with top-tier brand ambassadors and influencers in addition to traditional media including print, targeted ads, and product reviewers.

Jean Madar: 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 a world-winning singer and songwriter, Jean Legend, as the face of a more-blown Legend fragrance line. Couldn't find a better ambassador. Jean Legend will front all five fragrances in the hero collection and will remain on board for at least the next extension in January 2026. Jean Legend will present in the Legend franchise; he doesn't get better than that. Jimmy Chu named Chinese actress and singer Victoria Strong as his global brand ambassador and the face of the brand, I won't show fragrance line.

Jean Madar: 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 Célébrities Ambassadeurs, we have engaged award-winning singer and songwriter John Legend as the face of the Mont Blanc Legend fragrance line. We couldn't find a better ambassador.

Speaker Change: 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.

Jean Madar: 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, and with John Legend representing the Legend franchise, it 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 Choo, fragrant flowers. Victoria has been the face of the Jimmy Choo brand since 2018, and now, as a fragrance line model, we benefit from her significant following and impressive presence on global social commerce platforms.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: John Legend representing the Legend franchise, it doesn't get better than that.

Speaker Change: Jimmy Choo named Chinese actress and singer Victoria Song as its global brand ambassador and the face of the brand I Want Choo fragrance line.

Jean Madar: Victoria has been the faith of the Jimmy Choubrand since 2018, and now, as the brand's fragrance line model, we benefit from a significant following and impressive presence on global social commerce platforms. And finally, Korch has expanded its partnership with Boston's Celtics forward, Jason Tatum, as he will now be the newest faith of the Korch Foreman's fragrance line. Following the Celtics and B.A. Champion's ship, Wayne Tatum also joined Team USA in the 2024 Olympics. Tatum, authentically and spiritually embodies the brand's image and empowers the courage to be a real story in celebration of self-expression. Moving on, just have settled in our largest market, North America, rose by five percent with strong momentum across all channels.

Speaker Change: Victoria has been the face of the Jimmy Choo brand since 2018 and now, as the brand's fragrance line model, we benefit from a significant following and impressive presence on global social commerce platforms.

Jean Madar: And finally, Coach has expanded its partnership with Boston Celtics forward Jason Tatum, as he will now be the newest face of the Coach Foreman 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.

Speaker Change: And finally, Koch has expanded its partnership with Boston Celtics forward Jason Tatum, as he will now be the newest face of the Koch Foreman's fragrance line.

Speaker Change: Following the Celtics NBA Championship win, Tatum also joined Team USA in the 2024 Olympics.

Speaker Change: Tatum authentically and inspirationally embodies the brand's image and empowers the courage to be a real story in celebration of self-expression.

Jean Madar: The first half sales in our largest market, North America, rose by 5%, with strong momentum across all channels. Retail sellout is performing exceptionally well, and online channel growth is continuing. Western Europe and Asia-Pacific followed, where comparable half-share sales increased 11% for Western Europe and 6% for Asia-Pacific. For Asia, Central and South America's cell growth was exceptional at 26 percent, shrunk in great part to Lacoste pregnant cells, while our cells in the Middle East and Africa rose by 8 percent.

Speaker Change: Moving on...

Speaker Change: The first half sells in our largest market, North America, rose by 5% with strong momentum across all channels.

Jean Madar: Retail sell out performing exceptionally well, and online channel growth is continuing. Western Europe and Asia-Pacific followed, where comparable healthier sales increased 11 percent for Western Europe and 6 percent for Asia. Control and South America sales growth was exceptional at 26 percent, thanks in great parts to LaCoste's fragrance sales, while ourselves in the Middle East and Africa rose by 8 percent. Additionally, the travel retail business continued to search after seeing an increase in both leisure and business travel earlier this year. To date, travel retail increased 20 percent from the prior year period, representing 8 percent of net sales. Longer term, with a target of approximately 10 percent of net sales to be from travel retail on an annual basis.

Speaker Change: Retail sellout is performing exceptionally well and online channel growth is continuing.

Speaker Change: Western Europe and Asia-Pacific followed where comparable half-year sales increased 11% for Western Europe and 6% for Asia.

Speaker Change: Central and South America cells growth was exceptional at 26%, shrank in great part to Lacoste pregnant cells, while our cells in the Middle East and Africa rose by 8%.

Jean Madar: 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 by 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 was down in Eastern Europe in the first half, due to some constraints in the third quarter. There have been recent signs of improvement, and the second quarter was broadly in line with the prior year period.

Speaker Change: Additionally, the travel retail business continued to surge after seeing an increase in both leisure and business travel earlier this year.

Speaker Change: 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.

Jean Madar: 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 purposely and gradually shifting towards retailers, particularly in France, Italy and the US, where we can achieve higher levels of growth mountain, where simultaneously, unfolding heavy investment in our vast team of distributors as there are key contributors just to our business. As part of our strategy, we plan to continue to make investments behind growing market and channels to increase our market share, including specialty store, CIFORR and Altar, retailers like Macy, Zaxfist Avenue and Nordstrom, and of course, e-commerce through Amazon.

Speaker Change: While our business is down in Eastern Europe in the first half,

Speaker Change: due to sourcing constraints from the third quarter. There have been recent signs of improvement and the second quarter was broadly in line with the prior year periods.

Jean Madar: Furthermore, our business is purposely and gradually shifting towards retailers, particularly in France, Italy, and the U.S., where we can achieve higher levels of ghost mountains, while 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 in growing markets and channels to increase our market share, including specialty stores like Sephora and Ulta, retailers like Macy's, Saks Fifth Avenue, and Nordstrom, and, of course, e-commerce through Amazon.

Speaker Change: Furthermore, our business is purposely and gradually shifting towards retailers, particularly in France, Italy and the US, where we can achieve higher levels of gross margin.

Speaker Change: who are simultaneously affording heavy investment in our vast team of distributors as they are key contributors to our business.

Speaker Change: 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.

Speaker Change: Sachs Fifth Avenue and Nordstrom, and of course e-commerce through Amazon.

Jean Madar: 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 for 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 US-based e-commerce experience to roll out a winning Amazon strategy to capture sales across the rest of Europe. Our newest brand, Robert Tokiavali 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 in 2022-2025.

Jean Madar: 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, Germany, and Spain, who 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.

Speaker Change: Our Italian affiliate is performing favorably, serving as a distribution hub for all of the brands in our portfolio.

Speaker Change: particularly with the addition of direct European distribution through Amazon.

Speaker Change: 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 .

Jean Madar: Our newest brands, 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, Inter Parfums Essay, named Solferino Paris.

Speaker Change: Our newest brand, Roberto Cavalli and Lacoste, are doing well and exceeding the pace of growth we targeted.

Speaker Change: 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.

Jean Madar: 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, Inter Parfums I say, named Sulphéry No Paris. This fragrance assortment will honor and celebrate Paris and the French arbiseur with a planned launch in 2025. The collection of 10 fragrances is being created by master perfumes and will be supported by upscale merchandising and the highly selective exclusive distribution. Looking at the balance of rigour, we have a number of brand extensions planned, including a new fragrance duo from Carla Garcell, an extension of Montclair, and two new fragrances within the Van Cliff and Arbise collection extraordinary.

Speaker Change: 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 front subsidiary Inter Parfums Essai.

Jean Madar: This fragrance assortment will honor and celebrate Paris and the French Art Deco. 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 selected 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 Moncler, and two new fragrances within the Van Cleef & Arpels collection extraordinaire.

Speaker Change: named Solferino Paris. This fragrance assortment will honor and celebrate Paris and the French Art de Vivre.

Speaker Change: 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.

Speaker Change: Looking at the balance of the year, we have a number of brand extensions planned, including a new fragrance duo from Carla Garcel, an extension of Moncler, and two new fragrances within the Van Cleef & Arpels collection extraordinaire.

Jean Madar: For La Coste, we soft-launched a man's blockbuster fragrance called Poriginal in Paris in Jude and CIS and CIS to expand it internationally. This fragrance is a tribute to the 1984 fragrance of the same name, marking the first collaboration between Lacoste and Inter Parfum. Additionally, we will introduce an Azure World Wander collection; we will also introduce a new collection for MTN and also new extensions for Arbiseur and a new line of fragrance and also Roberto Caballini's nature. We sent in the new DKNOI blockbuster fragrance called DKNOI-2047, but launched a telecom market at the end of the second quarter and will undergo full scale dissolution next month.

Jean Madar: For Lacoste, we soft-launched a men's blockbuster fragrance called Original in Paris in June, and we have since expanded internationally. This fragrance is a tribute to the 1984 fragrance of the same name, marking the first collaboration between Lacoste and Inter Parfums. Additionally, we will introduce Anna Tsui's Wild Wonder Collection, who will also introduce a new collection for MCM, and also new extensions for Olyster and a New Line of Fragrance for Guests. Additionally, Roberto Cavalli has recently unveiled the new DKNY Blockbuster Fragments, called DKNY 24-7, that launch in select markets at the end of the second quarter and will undergo full-scale distribution next month

Speaker Change: For Lacoste, we soft-launched a men's blockbuster fragrance called Original in Paris in June , and since, we expanded internationally.

Speaker Change: This fragrance is a tribute to the 1984 fragrance of the same name, marking the first collaboration between Lacoste and Inter Parfums.

Speaker Change: Additionally, we will introduce Anna Tsui's Wild Wonder collection. We will also introduce a new collection for MCM.

Speaker Change: and also new extensions for Olyster and a new line of fragrances for death and also Roberto Cavalli Signature.

Jean Madar: As we announced, discussions have been underway since 2023 with a view to renewing the license agreement within Cliff and Arbiseur. We have been managing the fragrance brand since 2006 and appreciate the vote of confidence the brand owner, Richmond, has placed in us for the nine-year extension of our partners. The new agreement will tighten the selective distribution of vain grief and arpeggles worldwide, and with special and limited edition extensions, play into the ultra luxury category. The fragrance market is continuing on the path of mid-single digit growth, and near-adinter Parfums, we are well prepared and aiming to surpass the pace of the market.

Jean Madar: As we announced, discussions have been underway since 2023 with a view to renewing the license agreement with Enclif and Arpel. 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 extensions, enter the ultra-luxury category.

Jean Madar: The fragrance market is continuing on a path of mid-single-digit growth, and here at Inter Parfums, 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 appetites with a well-balanced pipeline of new product launches across our prestige portfolio. I will now turn the call over to Michel for a more detailed financial review

Jean Madar: We are committed to our retailers, distributors, brands, and consumers, and we will continue to serve their frequent appetite with a well-balanced pipeline of new products, branches across our prestige portfolio.

Michel Atwood: I will now turn the call over to Michel for a more detailed financial review. Thank you, Jean, and good morning, everyone. Since we reported a record, second-quarter sales last month, I will focus on profitability, which was a second-quarter record as well, with net income of $37 million, and a $1.14 per share, double-decher. On a consolidated basis, Rose margin expanded by 360 basis points for the current quarter, and 50 basis points for the first half. The gross margin expansion in the second quarter was driven by our European-based operations, where gross margin improved by 570 basis points, doing part by favorable segmented geographic and channel mix, as well as the one-time inventory reserve made in the prior year.

Michel Atwood: Thank you, Jean, and good morning, everyone. Since we reported record second quarter sales last month, I will focus on profitability, which was a second quarter record as well, with net income of $37 million and a $1.14 Canada dollar annual revenue of $1.37. In all, the sales were the highest in America since 1686, with the largest gross sales from the United States until 1982. Quality standards were best followed using QPRD standards to meet best performance standards for QPRD's native brands.

Speaker Change: On a consolidated basis, gross margin expanded by 360 basis points for the current quarter and 50 basis points for the first half.

Michel Atwood: The achievement of QPRD was passed by the R. Pratt Firm Checklist to sollte, dollars per share, diluted share. On a consolidated basis, gross margin expanded by 360 basis points for the current quarter and 50 basis points for the first half. The Gross Margin Expansion in the second quarter was driven by our European-based operations, where gross margin improved by 570 basis points, due in part to favorable segment geographic and channel mix as well as the one-time inventory reserve made in the prior year.

Speaker Change: The Gross Margin Expansion in the second quarter was driven by our European-based operations

Speaker Change: where gross margin improved by 570 basis points due in part by favorable segment geographic and channel mix as well as the one-time inventory reserve made in the prior year.

Michel Atwood: Excluding the inventory reserve in the base, gross margin expanded by 250 basis points in the second quarter, partially offsetting the unfavorable mix we saw in the first quarter. On a consolidated basis, we expect 2024 gross margins to be broadly in line with 2023, which, if you recall, was just under 64%. Our teams have been working on executing our A&P strategy to support our established brands and maintain the momentum of our two new brands. Our A&P spending aggregated 19.4% and 17.2% of net sales in the second quarter and the first half of 2024, compared to 17.6% and 14.5% for the corresponding period in the prior year.

Michel Atwood: Excluding the inventory reserved in the base, gross margin expanded by 250 basis points in the second quarter, partially offsetting the unfavorable mix we saw in the first quarter. On a consolidated basis, we expect 2024 gross margins to be broadly in line with 2023, which, if you recall, was just under 64%. Our teams have been working on executing our A&P strategy to support our established brands and maintain the momentum of our two new brands.

Speaker Change: Our teams have been working on executing our A&P strategy to support our established brands and maintain the momentum of our two new brands.

Michel Atwood: Our A&P spending aggregated 19.4% and 17.2% of net sales in the second quarter and the first half of 2024, compared to 17.6% and 14.5% for the corresponding periods in the prior year. Now that we are balancing our A&P expense throughout the year, we will continue to work towards our target A&P spend of 21% of net sales. We fell short of 21% in the past few years because of higher-than-expected sales. We are building brand awareness to support sustainable future growth, and we are already seeing the benefits of our A&P strategy in our results, also included in SG&A expenses.

Speaker Change: Our A&P spending aggregated 19.4% and 17.2% of net sales in the second quarter and the first half of 2024, compared to 17.6% and 14.5% for the corresponding period in the prior year.

Michel Atwood: Now that we are balancing our A&P expense throughout the year, we will continue to work towards our target A&P spend of 21% of net sales. We fell short of 21% in the past few years because of higher-than-expected sales. We are building brand awareness to support sustainable future growth, and we are already seeing the benefits of our A&P strategy on our results. Also included in SGNA expenses, royalty expense represented just under 8% of net sales in the quarter, and the amalgamation of the cost of the cost license, which are not to $3.2 million during the first half of 2024, will continue over the 15-year life of the contract.

Speaker Change: Now that we are balancing our A&P expense throughout the year, we will continue to work towards our target A&P spend of 21% of net sales.

Michel Atwood: Royalty expense represented just under 8% of net sales in the quarter, and the amortization of the cost of the Lacoste license, which amounted to $3.2 million during the first half of 2024, will continue over the 15-year life of the contract.

Speaker Change: Also included in SG&A expenses, royalty expense represented just under 8% of net sales in the quarter, and the amortization of the cost of the Lacoste license, which amounted to $3.2 million during the first half of 2024, will continue over the 15-year life of the contract.

Michel Atwood: These items together amounted to higher levels of SG&A expense as expected for both the second quarter and the first half of 2024, representing 45.6% and 43.6% of net sales compared to 43.1% and 39.6% of net sales in the prior year periods, respectively. For these reasons, our second quarter operating margin was 18.9%, both in line with our expectations and a continuation of a return to a more normalized level compared to post-pandemic-related surges. As we reported yesterday, below the operating line, first half net income was depressed by 1.5 million in other expenses versus a 2.8 million gain in other income in the first years and last year's first half.

Michel Atwood: These items together amounted to higher levels of SG&A expense, as expected, for both the second quarter and the first half of 2024, representing 45.6% and 43.6% of net sales, compared to 43.1% and 39.6% of net sales in the prior-year periods, respectively. For these reasons, our second-quarter operating margin was 18.9%, both in line with our expectations and a continuation of a return to a more normalized level compared to the post-pandemic surges. As we reported yesterday, below the operating line, first half net income was depressed by $1.5 million in other expenses versus a $2.8 million gain in other income in last year's first half.

Speaker Change: These items together amounted to higher levels of SG&A expense, as expected, for both the second quarter and the first half of 2024, representing 45.6% and 43.6% of net sales.

Michel Atwood: The main driver of this swing stems from the one-time realized gain of 3.1 million recognized in 2023 related to the sale of marketable securities compared to an unrealized loss of 600,000 in 2024. From a cash flow perspective, accounts receivable is up 24% from year-end 2023. The balance is reasonable based on the record second quarter sales levels and the seasonality of the business. Days sales outstanding was 72 days, slightly down from 73 days at the end of 2024 first quarter. Our inventory levels at mid-year increased 19% from year end 2023 in support of our overall sales growth seasonality, as well as the inventory buildup required by the inclusion of the LaCost and Roberta Cavali licenses to support the launches of these brands.

Michel Atwood: The main driver of this stems from the one-time realized gain of $3.1 million recognized in 2023 related to the sale of marketable securities compared to an unrealized loss of $600,000 in 2024. From a cash flow perspective, accounts receivable is up 24% from year-end 2023. The balance is reasonable based on the record second quarter sales levels and the seasonality of the business. Day sales outstanding were 72 days, slightly down from 73 days at the end of the 2024 first quarter.

Speaker Change: From a cash flow perspective, accounts receivable is up 24% from year-end 2023. The balance is reasonable based on the record second quarter sales levels and the seasonality of the business.

Michel Atwood: Our inventory levels at mid-year increased 19% from year-end 2023 in support of our overall sales growth, seasonality, as well as the inventory build-up required by the inclusion of the Lacoste and Roberto Cavalli licenses to support the launches of these brands. We continue to actively work on programs to deliver more inventory efficiency without compromising on business growth and service levels, and are targeting to maintain inventory dollars in line with the prior year by December 2024. We close the quarter with a healthy balance sheet with working capital of $525 million, including $77 million in cash and cash equivalents and short-term investments. Our long-term debt, including current maturities, was $137 million at the end of the second quarter.

Michel Atwood: Continue to actively work on programs to deliver more inventory efficiency without compromising on business growth and service levels and are targeting to maintain inventory dollars in line with prior year by December 2024. We closed the quarter with a healthy balance sheet with working capital of $525 million, including $77 million cash and cash equivalents and short-term investments. A long-term debt, including career maturities, was $137 million at the end of the second quarter. Once again, we are reaffirming our 2024 guidance of net sales of 1.45 billion, implying mid-teen growth in the second half of this year. This results in earnings per due of the share of $5.15, which sets a new record for our company.

Speaker Change: We continue to actively work on programs to deliver more inventory efficiency without compromising on business growth and service levels, and are targeting to maintain inventory dollars in line with prior year by December 2024.

Speaker Change: We close the quarter with a healthy balance sheet with working capital of $525 million, including $77 million in cash and cash equivalents and short-term investments.

Speaker Change: A long-term debt, including current maturities, was $137 million at the end of the second quarter.

Michel Atwood: Once again, we are reaffirming our 2024 guidance of net sales of $1.45 billion and applying mid-teen growth in the second half of this year. This results in earnings per share of $5.15, which sets a new record for our company. It took 40 years for Interparfum to hit a billion in sales, and in just two years, we are nearly halfway to our second billion. While we are observing some slowdown in the global fragrance market, it remains healthy, and we believe that the tailwinds continue to outweigh the headwinds in our business and across the industry.

Speaker Change: Once again, we are reaffirming our 2024 guidance of net sales of $1.45 billion.

Speaker Change: implying mid-teen growth in the second half of this year.

Interpart Found: This results in earnings per dual at a share of $5.15, which sets a new record for our company. It took 40 years for Inter Parfums to hit a billion in sales, and in just two years, we are nearly halfway to our second billion.

Michel Atwood: It's up 40 years for inter-parfound to hit a billion in sales, and in just two years we are nearly halfway to our second billion. While we are observing some slowdown in the global fragrance market, it remains healthy, and we believe that the tailwinds continued outweigh the headwinds in our business and across the industry.

Speaker Change: While we are observing some slowdown in the global fragrance market, it remains healthy and we believe that the tailwinds continue to outweigh the headwinds in our business and across the industry.

Michel Atwood: However, some of the trade destocking we have observed in the first half, coupled with the ongoing conflict in Eastern Europe, encourage us to remain prudent with our full-year outlook.

Michel Atwood: However, some of the trade destocking we have observed in the first half, coupled with the ongoing conflict in Eastern Europe, encourage us to remain prudent with our full-year outlook. With that operator, please open the line for questions.

Speaker Change: However, some of the trade destocking we have observed in the first half, coupled with the ongoing conflict in Eastern Europe , encourage us to remain prudent with our full-year outlook.

Operator: With that operator, please open the line for questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue, and for a participant using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Oliver Chen, with TD Cowan. Please proceed.

Speaker Change: With that operator, please open the line for questions.

Speaker Change: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker Change: You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Oliver Jen: Our first question is from Oliver Jen with TD Cowan. Please proceed. Hi, John Madar and Michel, thanks for your time.

Speaker Change: Our first question is from Oliver Chen with TD Cowan. Please proceed.

Oliver Chen: Hi Jean Madar and Michel. Thanks for your time and congratulations on the great results.

Jean Madar: Congrats on great results. John Madar on the own brand opportunity: what do you see ahead for that? It sounds pretty exciting, and you have a lot of capabilities. What may happen, longer term. Also, as we look at Asia Pacific, it's been tough for a macro environment in China, and there are a lot of concerns which are outside of your control with the economic situation. Just would love your thoughts on what you're seeing with that customer, and your travel retail momentum continues to be really strong.

Speaker Change: Bye, Jean Madar and Michel. Thanks for your time and congrats on...

Jean Madar: Jean Madar, on the own brand opportunity, what do you see ahead for that? It sounds pretty exciting, and you have a lot of capabilities. What may happen longer term? Also, as we look at Asia Pacific, it's been a tougher macro environment in China, and there are a lot of concerns which are outside of your control with the economic situation. Just would love your thoughts on what you're seeing with that customer, and your travel retail momentum continues to be really strong. And Michel, one for you. You called out trade destocking and some slowdown. What channels or geographies are you most concerned about, as you highlighted that? Thank you.

Oliver Chen: Jean Madar, on the own brand opportunity, what do you see ahead for that? It sounds pretty exciting, and you have a lot of capabilities. What may happen longer term? Also, as we look at Asia Pacific, it's been a tougher macro environment in China, and there are a lot of

Speaker Change: concerns which are outside of your control with the with the economic situation. Just would love your thoughts on what you're seeing with that customer and your travel retail momentum continues.

Michel Atwood: And Michel, one for you: you called out trade destocking and some slowdown. What channels or geographies are you most concerned about, as you highlighted that? Thank you.

Michel Atwood: to be really strong. And Michel, one for you. You called out trade destocking and some slowdown. What channels or geographies are you most concerned about as you highlighted that? Thank you.

Jean Madar: So regarding our own brand, we have been preparing this line for over a year and a half, and we'll be launching it next year. It's called Soxarino. It's really to go after the niche market. We saw that definitely there was a premiumization in the fragrance business. So we wanted to have more products over $100 or even $150. So this is the line of 10 products. Not under license, we created from scratch. It's called Soxarino. I think we launched in a very limited amount of doors. We'll select some anchor stores in Europe, in the US, and of course in Asia.

Jean Madar: So regarding our own brand, we have been preparing this line for over a year and a half, and we'll be launching it next year. It's called Zoxerino. It's really to go after the niche market. We saw that there was definitely a premiumization in the fragrance business, so we wanted to have more products over $100 or even $150. So this is a line of 10 products, not under license, that we created from scratch. It's called Zoxerino.

Speaker Change: So, regarding our own brand, we have been preparing this line for over a year and a half and we'll be launching it next year. It's called Zoopherino.

Speaker Change: It's really to go after the niche market, we saw that definitely there was a premiumization in the fragrance business, so we wanted to have more products.

Speaker Change: over a hundred or even a hundred and fifty dollars.

Sophia Hino: So this is a line of 10 products, not under license, we created from scratch, it's called Sophia Hinault.

Jean Madar: I think we will launch in a very limited number of doors; we will select some, some anchor stores in Europe, in the U.S., and, of course, in Asia. We did some testing on the juices. We are quite confident. So it will be small to begin with because the distribution will be small, but we have to be present in this niche, expensive product. As you know, we have some experience of expensive fragrances because we did very well with Van Cleef, that's why the license was recently renewed. So we have a lot of knowledge and experience, and we want to apply it to this new line. Regarding what we see, I think your second part of the question is about Asia and travel.

Sophia Hino: I think we will launch in a very limited amount of doors, we will select some

Sophia Hino: some anchor stores in Europe , in the U.S., and of course in Asia.

Jean Madar: We did some testing on the juices. We are quite confident. So it would be small to begin with, because the distribution would be small, but we have to be present in this niche, expensive product. As you know, we have some experience on the expensive fragrance because we have been doing very well with Encliffe. That's why also the license was recently renewed. So we have a lot of knowledge and experience, and we want to apply it on this new line.

Sophia Hino: We did some testing on the juices. We are quite confident.

Sophia Hino: So, it will be small to begin with, because the distribution will be small, but we have to be present in this niche expensive product.

Sophia Hino: As you know, we have some experience on the expensive fragrance because we have been doing very well with Van Cleef, that's why also the license was recently renewed.

Sophia Hino: So we have a lot of knowledge and experience and we want to apply it on this new line.

Jean Madar: Regarding what we see, I think your second part of the question is about Asia and travel retail, right? Yeah, China as well. Thank you. Okay, so our sales in China for the first three months or six months are not bad. I think we're up, Michel, for the first couple of months. I think we're up 20%, but again, it's an increasing number because it was an easy conclusion; the sales were down that year. So we continue to see some lack of activity in China, either in the platform we sell in, because you know, 70% of the business is on the platform. But even at the for our present, it is a lot of our brands, it is slow.

Speaker Change: Thank you.

Jean Madar: Yeah, and China as well. Thank you.

Jean Madar: Okay, so our sales in China for the first three months or six months are not bad. I think we're up, Michel. If I'm wrong, I think we're up 20%. But again, it's a misleading number because it was an easy comparison. The sales were down last year. So we continue to see some, uh...

Speaker Change: Yeah, and China as well. Thank you.

Speaker Change: Okay, so our sales in China for the first three months or six months are not bad. I think we're up.

Speaker Change: I think we're up 20%, but again, it's a misleading number because it was an easy comparison. The sales were down last year. So we continue to see some...

Jean Madar: Lack of activity in China, either on the platform where we sell our products, because, as you know, 70% of the business is on the e-commerce platform, but even at Sephora, where we are present with a lot of our brands, it is slow. Regarding Hainan, we have not yet seen improvement, but we know that China can change quickly.

Jean Madar: Regarding Hainan, we do not see; we have not seen yet improvements, but we know that China can change quickly. So we have prepared for next year for under the NCM line a full collection that will be given for Asian customer and of course Chinese customer. In general, travel we tell is bright; our business is increasing. I think it increased the last quarter by 20%. We have some brands that have good exposure, brands that could have a better exposure, but our team are working towards this 10% goal. We would like to have 10% of ourselves done in travel we tell, we are not here yet, we are in the 708 or 708, so we still have room to grow.

Speaker Change: Regarding Hénan, we have not seen yet improvement.

Speaker Change: But we know that China can change quickly, so we are prepared for next year.

Jean Madar: So we have prepared for next year, under the MCM line, a full collection that will be geared for Asian customers and, of course, Chinese customers. In general, travel retail is bright, our business is increasing; I think it increased by 20% in the last quarter. We have some brands that have good exposure, brands that could have better exposure, but our team is working towards this 10% goal. We would like to have 10% of our sales done in travel retail. We are not there yet. I think we are in the seven or eight, no, seven, yeah, so we still have room to grow.

Speaker Change: under the MCM line, a full collection that will be geared for Asian customers and of course Chinese customers.

Speaker Change: In general, travel retail is bright. Our business is increasing. I think it increased the last quarter by 20%.

Speaker Change: We have some brands that have good exposure, brands that could have a better exposure, but our team are working towards this 10% reduction.

Speaker Change: Goal, we would like to have 10% of our sales done in travel retail. We are not here yet I think we are in the seven or eight Not seven. Yeah, so we still have room to grow

Michel Atwood: But on my side, Michel? Yeah, so all of our, I mean, if you look at the first quarter, really, we were seeing a significant destocking. The situation has improved in the second quarter, and we are starting to see sales kind of catch up. But if you look at the US, for example, we're NPD sales are growing, our NPD sales are growing around 6% to 7%, whereas our sell-in was more around 5%, so we do see a small gap there, and there are a few markets also in Europe, I'd say particularly like the UK, where the market is doing very well. Market is up about 10%, but our distributor probably bottled a bit more inventory last year, expecting that market to pick up, and so they're seeing some destocking as well there from the trade. So those are some of the markets where we're seeing this, it's a few European markets, as well as the US, but it's definitely getting better, and what we're seeing is in July the orders have really, really picked up, and we had a very, very strong, you know, month of July as we start to sell-in our giftsets for holidays.

Michel Atwood: But on my side, Michel...

Michel Atwood: Yeah, so Oliver, I mean, if you look at the first quarter, really, we were seeing a significant destocking. The situation has improved in the second quarter, and we are starting to see sales kind of catch up. But if you look at the US, for example, you know, we're, you know, NPD sales are growing, our NPD sales are growing around six to seven percent, whereas our sell-in was more around five. So we do see a small gap there.

Speaker Change: But on my side, Michel...

Michel: Yeah, so Oliver, I mean, if you look at the first quarter, really, we were seeing a significant destocking. The situation has improved in the second quarter, and we are starting to see sales kind of catch up.

Speaker Change: but if you look at the U.S. for example, our NPD sales are growing around 6 to 7 percent.

Speaker Change: or as our sell-in was more around 5%. So we do see a small gap there. And there are a few markets also in Europe I'd say, particularly like the UK where the market is doing very well. The market is up about 10%.

Michel Atwood: And there are a few markets in Europe, I'd say, particularly in the UK, where the market is doing very well. The market is up about 10 percent, but our distributor probably bought a little bit more inventory last year, expecting that the market to pick up. And so they're seeing some destocking as well from the trade. So those are some of the markets where we're seeing this. It's in a few European markets as well as the US.

Speaker Change: but our distributor probably bought a little bit more inventory last year expecting that market to pick up and so they're seeing some destocking as well there from the trade. So those are some of the markets where we're seeing this, let's say a few European markets.

Michel Atwood: But it is definitely getting better, and what we're seeing is that in July, the orders have really, really picked up, and we had a very, very strong month of July as we start to sell in our gift sets for holidays. I think we had a record July, right? Yeah, I think so. Yeah. I mean, we're still, yeah, we're still, you know, closing the books for July, but yeah, we should be very close to record, if not higher. Yeah, so, so we see, we see some, we see some strength in the market. A lot of stores are reordering, so we are optimistic about the second half.

Speaker Change: as well as the U.S., but it is definitely getting better.

Speaker Change: What we're seeing is, in July , the orders have really, really picked up and we had a very, very strong month of July as we start to sell in our gift sets for holidays. I think we had the record July , right?

Jean Madar: I think we had the Stubli family; I think we had the record of July, right? Yeah, I think so. I mean, we're still closing the books for July, but yeah, we should be very close to record. So we see some strengths in the market; a lot of stores are reordering, so we're optimistic for the second half.

Speaker Change: Yeah, I think so. Yeah. I mean, we're still...

Speaker Change: We are still closing the books for July , but we should be very close to record. We see some strength in the market. A lot of stores are reordering.

Speaker Change: So, we are optimistic for the second half.

Oliver Jen: One quick follow-up, very helpful.

Oliver Chen: One quick follow-up: very helpful. The gross margins were also impressive. Michel, how was the relative contribution between segment, geographic, and channel mix? Any details you can provide as we model that going forward? Thank you.

Michel Atwood: On the growth margins, we're also impressive.

Speaker Change: One quick follow-up, very helpful. The gross margins were also impressive. Michel, how was the relative contribution between segment geographic and channel mix? Any details you can provide as we model that going forward?

Michel Atwood: Michelle, how was the relative contribution between segment and geographic and channel next? Any details you can provide as we model that going forward? Thank you, thanks very much. So really the big driver of this quarter improvement is really the excess and obsolescence reserve we booked last year in the second quarter, related to the Montclair. As you know, the first initial launch wasn't a success in, because it was plundering COVID. We probably bought more inventory than we ultimately ended up needing. So there was a $6.2 million excess and obsolescence reserve in the second quarter, so that is obviously distorting the base.

Michel Atwood: So really, the big driver of this quarter's improvement is the excess and obsolescence reserve we booked last year in the second quarter related to Montclair. As you know, the first initial launch wasn't a success because it was planned during COVID.

Speaker Change: Thank you. Thanks very much.

Michel: Thank you.

Speaker Change: So really the big driver of this quarter improvement is really the excess and obsolescence reserve we booked last year in the second quarter related to Montclair. As you know, the first initial launch wasn't a success.

Michel Atwood: We probably bought more inventory than we ultimately ended up needing, so there was a $6.2 million excess and obsolescence reserve in the second quarter. So that is obviously distorting the base. If you exclude that, the margins have expanded by about 1.5 points, and that is really the channel mix that we saw in the first quarter that was driving gross margins down. We've seen the offsetting impact. Our business is actually really a combination of two businesses.

Speaker Change: because it was planned during COVID, we, you know, probably bought more inventory than we ultimately ended up needing. So there was a...

Speaker Change: $6.2 million excess and obsolescence reserve in the second quarter.

Michel Atwood: If you exclude that, you know, we're essentially, you know, the margins have expanded by about one and a half points. And that is really the channel mix, so a piece of that is the channel mix that we saw in the first quarter that was driving margins, gross margins, you know, down. We've seen the offsetting impact. Our business is actually really a combination of two businesses. We have the direct to retail, which we do in France, Italy, and the US, and we have the rest of the world where we sell to distributors, and there can be a pretty sizable gross margin difference between the two.

Speaker Change: So, that is obviously distorting the base.

Speaker Change: If you exclude that, the margins have expanded by about 1.5 points.

Speaker Change: And that is really the channel mix that we saw in the first quarter that was driving

Speaker Change: We've seen the offsetting impact. Our business is actually really a combination of two businesses.

Michel Atwood: We have direct-to-retail, which we do in France, Italy, and the U.S., and we have the rest of the world where we sell to distributors. There can be a pretty sizable gross margin difference between the two. So what we're seeing really is growth happening outside of those core markets, largely driven by cost because cost is not present in the U.S. for the time being. So hopefully that addresses the point. Yeah, it's very helpful.

Speaker Change: to retail, which we do in France, Italy, and the U.S., and we have the rest of the world where we sell to distributors.

Michel Atwood: And so what we're seeing really is the growth is happening outside of those core markets, largely driven by LeCost, because LeCost is not present in the US for the time. So hopefully that addresses the point.

Speaker Change: there can be a pretty sizable gross margin difference between the two. And so what we're seeing really is the growth is happening outside of those core markets, largely driven by Lacoste, because Lacoste is not present in the U.S. for the time being.

Michel Atwood: Yeah, it's very helpful. Best regards.

Oliver Jen: Yeah, very helpful.

Oliver Jen: That's regards. Thank you.

Speaker Change: So hopefully that addresses the point.

Speaker Change: Yeah, it's very helpful. Best regards.

Linda Bolton: Our next question is from Linda Bolton: why is there with DA Davidson? Please proceed. Yes, hello. Hi.

Linda Bolton Weiser: Our next question is from Linda Bolton Weiser with D.A. Davison. Please proceed.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question is from Linda Bolton Weiser with D.A. Davison. Please proceed.

Jean Madar: I was just wondering if you could comment a little more on the relationship with Richemont and the Van Cleef renewal. I thought you said tighter distribution would be for the future. Do you mean tighter, less, or broader distribution? And also, can you explain just why Richemont is doing, I think it's Cartier, internally, but they're allowing you to do Van Cleef, if you could just explain that? Thank you.

Linda Bolton: So I was just wondering if you could comment a little more on the relationship with Rishmou and the Van Cleese renewal. I thought you said tighter distribution would be for the future. Do you mean tighter, less or broader distribution? And also can you also explain why Rishmou is doing? I think it's Cartier internally, but they're allowing you to do the Van Cleese. If you could just explain that. Thank you.

Linda Boltenweiser: Hello Linda.

Speaker Change: Yes, hello. Hi. So I was just wondering if you could comment a little more on the relationship with Richemont and the Van Cleef renewal. I thought you said tighter distribution would be for the future. Do you mean tighter, less, or broader distribution? And also, can you explain just... Can you also explain why Richemont is doing, I think it's Cartier internally, but they're

Jean Madar: I don't have all the answers, but let me try. So for Van Cleef, we will be looking at a tighter distribution, a smaller distribution. So we will continue to sell to a very, very selective market. As you know, we are not talking about just perfumery; we are talking about haute perfumery, high-end perfumery, and high price points. People do not want to see these products at too many points of sale. That's why we are keeping it exclusive.

Jean Madar: I don't have all the answers, but let me try. So for Van Cleese, we will be looking at a tighter distribution, a smaller distribution. So we will continue to sell to a very, very selective account. The goal to grow the business will be to sell more in this doors. So we're going to build more fixtures. We're going to take more space at the department stores. And this is how we're going to grow the business. It's a strategy that is working. As you know, we're not talking about just perfumery. We're talking about hot perfumery, high perfumery, high price points.

Linda Boltenweiser: allowing you to do the Van Cleef, if you could just explain that. Thank you.

Speaker Change: I don't have all the answers, but let me try.

Speaker Change: to very selective accounts.

Speaker Change: The goal to grow the business will be to sell more in these doors.

Speaker Change: So we're going to build more fixtures, we're going to take more space at department stores, and this is how we're going to grow our business.

Speaker Change: As you know, we are not talking about just perfumery, we are talking about haute perfumery, high perfumery, high price point. People do not want to see these products in too many points of sales.

Jean Madar: People do not want to see this progress in too many points of sense. That's why we are keeping it exclusive.

Jean Madar: Our relationship with Richemont is excellent. As you know, we have... With Richemont, we have Montblanc, which is one of our largest brands in our portfolio, and we have Van Cleef. I think it's a good sign that they re-signed this license that was up for renewal at the end of the year. You know, Richemont has licenses and also handles directly the fragrance of Cartier, but they own Chloé, and Chloé is under license with Coty, they own Montblanc and Van Cleef, and it's under license with Inter Parfums.

Jean Madar: A relationship with Rishmou is excellent. As you know, we have Rishmou, we have Mont Blanc, which is one of our largest brands in our portfolio. And we have Van Cleese. I think to put aside that they resigned this license. That was up for a renewal at the end of the year. You know, Rishmou has licensees and also handled directly the fragments of Cartier, but they own Chloe and Chloe is under license with Kotie. They own Mont Blanc and Van Cleef, and they're under license with their perfume. They have also Cartier, and they are the needs themselves.

Speaker Change: That's why we are keeping it exclusive. Our relationship with Richemont is excellent. As you know, we have...

Speaker Change: With Richemont we have Montblanc.

Speaker Change: which is one of our largest brands in our portfolio and we have Van Cleef, I think it's a good sign that

Speaker Change: that they re-signed this license that was up for renewal.

Speaker Change: at the end of the year.

Speaker Change: You know, Richemont has a...

Speaker Change: have licenses and also handle directly the fragrance of Cartier but they own Chloé and Chloé is under license with

Speaker Change: Véron Montblanc

Speaker Change: and Van Cleef & Dixon are licensed with Inter Parfums. They have also Cartier and they are doing it themselves.

Michel Atwood: I think that they are comfortable with this multi-type of relationship. But again, I repeat, our relationship with Rishmou is excellent. Michelle, make what you think. No, no, I think you don't. Great.

Speaker Change: I think that they are comfortable with this multi-type of relationship.

Jean Madar: They also have Cartier, and they are doing it themselves. I think that they are comfortable with this multi-type of relationship. But again, I repeat, our relationship with Richemont is excellent. Michel, do you want to watch something?

Speaker Change: But again, I repeat, our relationship with Richemont is excellent.

Michel Atwood: No, no, I think you should go, yeah. Great.

Speaker Change: Michel, do you want to watch something?

Linda Bolton Weiser: Great. Can I also ask, it seems like this year is a little bit more a year of like extensions of brands and things like that. Do you have more major launches like New Pillars and stuff planned for 2025?

Jean Madar: Can I also ask? It seems like this year is a little bit more a year of like extensions of brands and things like that. Do you have more major launches like new pillars of self plan for 2025? Yeah, in 2025 we'll have more launches than this year, for sure. But this year we have been able to introduce a blockbuster for La Casse, which was not in any just after one year of signing the contract. We will have a major launch for Jimmy Chou, but next to the 2025 we'll have more blockbusters than this year.

Michel: No, no, I think you, you go to, yeah.

Speaker Change: Great, can I also ask, it seems like this year is a little bit more a year of like extensions of brands and things like that. Do you have more major launches like New Pillars and stuff planned for 2025?

Jean Madar: In 2025, we will have more launches than this year for sure, but this year we have been able to introduce a blockbuster for Lacoste, which was not easy, just after one year of signing the contract. We will have a major launch for Lacoste, for Jimmy Choo, but it's true that 2025 will have more blockbusters than this year.

Speaker Change: Yeah.

Speaker Change: In 2025 we will have more launches than this year for sure, but this year we have been able to introduce a blockbuster for Lacoste, which was not easy, just after one year of being in production. Thank you. Thank you.

Speaker Change: signing the contract, we will have a major launch for...

Speaker Change: for Jimmy Choo, but that's true that 2025 will have more blockbusters than this year.

Linda Bolton: Okay, thanks.

Linda Bolton Weiser: Okay, thanks. That's all for me. Take care. Thank you.

Linda Bolton: That's all for me.

Linda Bolton: Take care.

Operator: Thank you.

Ashley Helgans: Our next question is from Ashley Helgans with Jeffries. Please proceed. I think for taking our questions, we can grasp on the next quarter. So let's just start. Fragrance has remained very strong. Like in the US, up 12% you're today. Maybe you can just talk about some of the underlying drivers and then just how sales trends track throughout the quarter by month. And then if I said one more to we continue to see many and travel size products, you kind of outpace the traditional fragrance market. In your view, is this a sign of a trade down, or is this just more of a signal that consumers are looking to engage with prestige fragrance?

Speaker Change: Okay, thanks. That's all for me. Take care. Thank you. Our next question is from Ashley Helgans with Jeffries. Please proceed.

Ashley Helgans: Our next question is from Ashley Helgans with Jeffries. Please proceed.

Ashley Helgans: Thank you for taking our questions and congratulations on the ninth quarter. So just to start, fragrance has remained very strong, like in the U.S., up 12% year-to-date. Maybe you can just talk about some of the underlying drivers and then just how sales trends track throughout the quarter by month. And then I just have one more, too.

Ashley Helgans: Thanks for taking our questions and congrats on the nice quarter. So just to start, fragrance has remained very strong, like in the U.S., up 12% year-to-date. Maybe you can just talk about some of the underlying drivers and then just how sales trends track throughout the quarter by month.

Michel Atwood: We continue to see mini and travel-sized products. You kind of outpace the traditional fragrance market. In your view, is this a sign of a trade-down, or is this just more of a signal that consumers are looking to engage with prestige fragrances? Thanks.

Speaker Change: And then I just have one more, too. We continue to see mini and travel-sized products. You kind of outtaste the traditional fragrance market. In your view, is this a sign of a trade-down, or is this just more of a signal that consumers are looking to engage?

Ashley Helgans: Thanks.

Michel Atwood: Vishal, do you want to start? Yeah, hi Ashley. Yeah, the market, the market got off to a very, very strong start in the US and was growing very, very high, you know, double digits in the first half. The first quarter, we've seen some slow down. The market, I think, was only up. If I recall correctly, you're only up about 78% in June. So we are starting to see a little bit of a slow down in that growth. It's been a little erratic. There've been months where it goes up higher and then months where it's a little bit slower, but clearly we are hearing, as we are hearing, a bit of a slow down.

Michel Atwood: Michel, do you want to start? Yeah, hi.

Speaker Change: with Prestige Fragrance. Thanks.

Michel Atwood: The market got off to a very, very strong start in the U.S. and was growing very, very high, double digits in the first quarter. We've seen some slowdown. The market, if I recall correctly, was only up about 7% to 8% in June, so we are starting to see a little bit of a slowdown in that growth. It's been a little erratic.

Speaker Change: Michel, do you want to start?

Michel: Yeah, hi Ashley. Yeah, the market got off to a very, very strong start in the U.S. and was growing very, very high, you know, double digits in the first half, the first quarter. We've seen some slowdown. The market I think was only up

Michel: If I recall correctly, we're only up about 7% to 8% in June , so we are starting to see a little bit of a slowdown in that growth. It's been a little erratic. There have been...

Michel Atwood: There have been months where it goes up higher and then months where it's a little bit slower, but clearly, we are hearing a bit of a slowdown. This being said, a lot of retailers have been very bullish going into the holiday season, and as I was saying before, the orders that are coming in have been very, very strong. Overall, we're feeling comfortable.

Michel: Months where it goes up higher and then months where it's a little bit slower But but clearly where we are hearing as we are hearing a bit of a slowdown

Michel Atwood: This being said, you know, a lot of the retailers have been very bullish going into the holiday season. And as I was saying before, the orders that are coming in have been very, very strong. So overall, we're feeling comfortable. We are selling in. We have sold in a little bit less than our sellouts. And I think that's primarily driven by the fact that a lot of the retailers are really focusing on nudists. They're restricted in terms of open-to-buy dollars. And given our pace of innovation, it hasn't been as strong this year as last year. We've had a tendency to probably order a little bit less, but we know that once the consumer starts to buy, the retailers will also start to buy.

Michel: This being said, you know, a lot of the retailers have been very bullish going into the holiday season. And as I was saying before, the orders that are coming in...

Michel Atwood: We are selling in. We have sold in for a little bit less than our sell-outs, and I think that's primarily driven by the fact that a lot of the retailers are really focusing on newness. They're restricted in terms of open-to-buy dollars, and given our pace of innovation, it wasn't as strong this year as last year. We've had a tendency to probably order a little bit less, but we know that once the consumer starts to buy, the retailers will also start to buy, so we're not really concerned.

Michel: have been very, very strong. So overall, we're feeling comfortable. We are selling in, we have sold in a little bit less.

Michel: And I think that's primarily driven by the fact that a lot of the retailers are really focusing on newness.

Michel: They're restricted in terms of open-to-buy dollars, and given our pace of innovation, it wasn't as strong this year as last year.

Michel: we've had a tendency to probably order a little bit less. But we know that once the consumer starts to buy, the retailers will also start to buy, so we're not really concerned. And again, I think our strong month of July is a good sign of that. Regarding the small sizes, we're not really seeing

Jean Madar: So we're not really concerned. And again, I think our strong month of July is a good sign of that.

Jean Madar: Regarding the small sizes, we're not really seeing, you know, I think any trade down. I think small; what we're seeing is certainly a lot more people interested in the category, with penetration rising. And I think, you know, when people want to try a fragrance, you know, they'll maybe start with a small size before, you know, moving up to a larger size. So I don't think this is a trade down strategy. This just might be more of a sampling, you know, strategy. So we're not really, really concerned, and again, in the market continues to be very, very healthy.

Michel Atwood: Again, I think our strong month of July is a good sign of that. Regarding the small sizes, we're not really seeing any trade-down. What we're seeing is certainly a lot more people interested in the category, with penetration rising. I think when people want to try a fragrance, they'll maybe start with a small size before moving up to a larger size, so I don't think this is a trade-down strategy.

Michel: You know, I think any trade down. I think small, what we're seeing is certainly a lot more people interested in the category with penetration rising.

Michel Atwood: This just might be more of a sampling strategy. So we're not really, really concerned. And again, the market continues to be very, very healthy. Au revoir. Yes, I am.

Jean Madar: Jean? Yes, I totally agree. Me, I will not call this slow down. I will call it more of a landing or soft landing. We still see a lot of interest from consumers. And I think that if we are able to attract and to keep this customer with interesting products, interesting smells, they will respond very well. So, of course, we saw some extraordinary numbers after Covid; things like industry are not seen for years and years. But I see the interest; I see the momentum still here. So maybe the numbers will be high single or mid single weather.

Jean Madar: Yes, I totally agree. But me, I would not call this a slowdown. I would call it more of a landing or soft landing.

Speaker Change: I totally agree. Me, I would not call this a slowdown. I would call it more of a...

Jean Madar: We still see a lot, a lot of interest from consumers. And I think that if we are able to attract and keep these customers with interesting products, interesting smells, they will respond very well. Of course, we saw some extraordinary numbers after COVID, things that the industry has not seen for years and years, but I see the interest, I see the momentum still here. So maybe the...

Speaker Change: Of course, we saw some extraordinary numbers after COVID, things that the industry has not seen for years and years. But I see the interest, I see the momentum still here. So maybe the...

Jean Madar: The numbers will be high single or mid-single, but we think that there is still a huge opportunity because the customer is here and willing to try. Talking about trying, I think that the small size is great sampling. We participate in a lot of programs with small size, and it works well. People come back, they like it, and they buy the big size.

Speaker Change: for joining us. Thank you.

Speaker Change: The numbers will be high single or mid-single, but we think that there is still a huge opportunity because the customer is here and willing to try.

Jean Madar: But we think that there is still a huge opportunity because the customer is here and willing to try. Talking about try, I think that the small size are great sampling. We participate in a lot of programs of small size, and it works well. People come back; they like it and they buy the big size. Great, thanks so much.

Speaker Change: Talking about Tri, I think that the small size are great sampling. We participate in a lot of programs of small size and it works. It works well.

Speaker Change: Thank you.

Speaker Change: Great. Thanks so much.

Korinne Wolfmeyer: Our next question is from Corrine Wolfmeyer with Paper Sandler, please proceed. Good morning, team. Thanks for taking the question, and congrats on the quarter. I'd like to touch on your expectations for the back half in terms of the top-line cadence. It sounds like a lot of the growth has been and will be driven by innovation and new product launches, and historically I think a lot of us have been misaligned with our modeling in terms of those new launches. So could you walk us through how we should be thinking about the cadence over the back half.

Korinne Wolfmeyer: Our next question is from Korinne Wolfmeyer with Paper Sandler. Please proceed.

Speaker Change: Our next question is from Korinne Wolfmeyer with Paper Sandler. Please proceed.

Korinne Wolfmeyer: Hey, good morning team. Thanks for taking the question and congrats on the quarter. I'd like to touch on your expectations for the back half in terms of the top-line cadence. It sounds like a lot of the growth has been and will be driven by innovation and new product launches, and historically, I think a lot of us have been misaligned with our modeling in terms of those new launches. So could you walk us through how we should be thinking about the cadence over the back half, and then also as we look toward 2025? What kind of comp dynamics should we be aware of given the launch timeline? Thank you.

Korinne Wolfmeyer: Hey, good morning team. Thanks for taking the question and congrats on the quarter. I'd like to touch on your expectations for the back half in terms of the top line cadence.

Speaker Change: It sounds like a lot of the growth has been and will be driven by innovation and new product launches.

Speaker Change: A lot of us have been misaligned with our modeling in terms of those new launches, so could you walk us through how we should be thinking about the cadence over the back half? And then also, as we look toward 2025, what kind of comp dynamics should we be aware of given the launch timeline? Thank you.

Michel Atwood: And then also as you look toward 2025, what kind of comp dynamics should we be aware of given the launch timeline. Thank you.

Michel Atwood: Yeah, thanks. You know, thanks, Corinne, for your question. I mean, at this point in time, you know, we're looking for, I would say, a pretty balanced growth between quarter three and quarter four. Maybe a little bit more in quarter three than quarter four, but broadly, you know, we're looking for, you know, mid single digits for the, for the second half and should be pretty equally balanced. For next year, I mean, I mean, if you look at our growth this year, I mean, you can pretty clearly see that a big chunk of our growth has come from the new brands.

Michel Atwood: Yeah, thanks, you know, thanks, Korinne, for your question. I mean, at this point in time, you know, we're looking for, I would say, pretty balanced growth between Quarter 3 and Quarter 4, maybe a little bit more in Quarter 3 than Quarter 4. But broadly, you know, we're looking for, you know, mid-single digits for the second half, and it should be pretty equally balanced for next year. For next year, I mean, if you look at our growth this year, you can pretty clearly see that a big chunk of our growth has come from the new brands, Lacoste and Cavalli.

Speaker Change: At this point in time, we're looking for a pretty balanced growth between Q3 and Q4. Maybe a little bit more in Q3 than Q4. But broadly, we're looking for...

Speaker Change: Thank you.

Speaker Change: For next year, I mean, if you look at our growth this year, I mean, you can pretty clearly see that.

Michel Atwood: La Cousin Cavalli; not to say that the other brands haven't performed well, but they, you know, they've slowed down a little bit relative to the others. You know, as we focus more attention on La Cousin Cavalli, but at this point in time, you know, we are expecting, you know, mid single digit probably for next year. I'm on our cloud brand. Very helpful, thank you.

Speaker Change: A big chunk of our growth has come from the new brands.

Michel Atwood: Not to say that the other brands haven't performed well, but they've slowed down a little bit relative to the others as we focus more attention on Lacoste and Cavalli. But at this point in time, we are probably expecting mid-single digit growth for next year on our core brands.

Speaker Change: Lacoste & Cavalli. Not to say that the other brands haven't performed well, but they, you know, they've slowed down a little bit relative to the others, you know, as we focus more attention on Lacoste & Cavalli. But at this point in time, you know, we're, we are expecting, you know, mid single-digit

Speaker Change: Probably for next year on our core brands.

Michel Atwood: Very helpful, thank you, and then could you... Yeah, yeah.

Michel Atwood: And then could you? Yeah, yeah, single digit for the Korbunet. Of course, La Kost and Cavalier, we go much faster because we are only at the beginning. This is what we should, we can expect going forward. Great, that's very helpful. Thank you.

Jean Madar: Yeah, yeah, single digits for the core business. Of course, Lacoste and Cavalli will grow much faster because we are only at the beginning. This is what we think we can expect going forward.

Speaker Change: This is what we think we can expect going forward.

Korinne Wolfmeyer: Great, that's very helpful. Thank you. And then on the A&P spend in SG&A for the remainder of the year, any color you can provide on Q3 versus Q4, and then how you're thinking about that spend shaking out over the longer term, if there's any change in your spending intentions going forward. Thank you.

Michel Atwood: And then on the ANP spend in the SGNA for the remainder of the year, any color you can provide on Q3 versus Q4, and then how you're thinking about that spend shaking out over the longer term if there's any change in your spending intentions going forward. Thank you. So, I mean, I think, as we've clearly called out, you know, in the past, we have been spending significantly more in the fourth quarter and spending less. We are planning to spend, continue to spend more than prior year in the fourth, in the third quarter, some more to what you've seen in the first half.

Speaker Change: Great, that's very helpful. Thank you. And then on the ANP spend in the SG&A for the remainder of the year, any color you can provide on Q3 versus Q4, and then how you're thinking about that spend shaking out over the longer term if there's any change in your spending intentions going forward. Thank you.

Michel Atwood: So I mean, I think as we've clearly called out in the past, we have been spending significantly more in the fourth quarter and spending less in the third quarter. We are planning to continue to spend more than prior year in the fourth quarter, similar to what you've seen in the first half. I think we're up about 28% on a year to date basis. And, you know, we'll probably continue at that pace in the third quarter. And then the fourth quarter will probably be flat versus the prior year.

Michel Atwood: I think we're up about 28% on a year-to-date basis, and you know, we'll probably continue at that pace in the third quarter. And then fourth quarter will probably be flat with versus prior year and dollars. Great, thanks so much.

Speaker Change: similar to what you've seen in the first half, I think we're up about 28% on a year-to-date basis and we'll probably continue at that pace in the third quarter, and then fourth quarter we'll probably be flat versus prior year.

Hamed Khorsand: Our next question is from Haned Korsan with BWS Financial. Please proceed. Hi, first question I had was on the ad spending. What's a good timeline to recognize that this new structure, you know, spending equally or almost equally per quarter is working versus your historical ad spending? I think it's quite fast. We keep already spending more evenly than before. So this helps the self-loop. And that's why, like in shape, I worked out, was stronger than I worked in for the third six months of the year. You said? Yeah, I mean, you know, at the end of the day, you know, there's a lot of different pieces that come into play here to drive the ROI.

Hamed Khorsand: Our next question is from Hamed Khorsand with BWS Financial. Please proceed.

Speaker Change: Great, thanks so much.

Speaker Change: Our next question is from Hamed Khorsand with...

Jean Madar: Hi, the first question I had was on ad spending; what's a good timeline to recognize that this new structure of spending equally or almost equally per quarter is working versus your historical ad spending?

BWS Financial: BWS Financial, please proceed.

Hamed Khorsand: Hi, first question I had was on the ad spending, what's a good timeline to recognize that this new structure of spending equally or almost equally per quarter is working versus your historical ad spending?

Michel Atwood: I think it's quite fast. We see it already. We are spending more evenly than before, so this helps the sell-through. And that's why, like Michel said, our sell-out was stronger than our sell-in for the first six months of the year.

Speaker Change: I think it's quite fast. We skip already.

Speaker Change: We are spending more evenly than before, so this helps the sell-through, and that's why, like Michel said, our sell-out was stronger than our sell-in for the first six months of the year.

Hamed Khorsand: Yeah, I mean, at the end of the day, there's, there's a lot of different pieces that come into play here to drive the ROI. There's also the pace of innovation, as you know; our pace of innovation has been a little slower in the first half. And I think that it is our A&P investments that have actually enabled us to continue to grow the business. So I definitely agree with Jean's point. The ROI is currently there.

Speaker Change: Thank you. You should.

Speaker Change: Yeah, I mean, you know, at the end of the day, you know, there's a there's a lot of different pieces that come into play here to drive the ROI. There's also the pace of innovation, as you know.

Michel Atwood: There's also the pace of innovation. As you know, our pace of innovation has been a little slower in the first half. And I think that it's it is already in the investments that have actually enabled us to continue to grow the business. So I think definitely to Jean's point, the ROI is currently there.

Speaker Change: Our pace of innovation has been a little slower in the first half, and I think that it is our A&P investments that have actually enabled us to continue to grow the business. So I think definitely, to Jean's point, the ROI is clearly there.

Jean Madar: And my other question is that you already own the Rochos brand and have been selling it, and now you're expanding with your own different brand altogether. How are the two different, and what have you learned from there that you're applying differently to this new brand line that you think will work better? Yeah, and then you can chime in.

Michel Atwood: And my other question is that you already own the Rochas brand and have been selling it, and now you're expanding with your own different brand altogether. How are the two different, and what have you learned from there that you're applying differently to this new brand line that you think will work better?

Speaker Change: And my other question is that...

Speaker Change: You already own the Rochas brand and have been selling it, and now you're expanding with your own different brand altogether. How are the two different, and what have you learned from there that you're applying differently to this new brand line that you think will work better?

Jean Madar: Um, do you want me to take that, Jean? I think it's a very different model. If you look at Rochasse, Rochasse is a brand we acquired. It's primarily focused in France and in Spain. That's where the bulk of the business is. It's more of a prestige brand. The Soferino brand will be more of a high-end luxury brand, and it's designed to actually compete with the niche fragrances in this category. Of course, we're going to be bringing all of our scale and knowledge of the fragrance category, the power of our distribution, which should enable us to build up distribution more rapidly than somebody that's entering this category on their own, but ultimately, it's really a very different business model.

Speaker Change: You want me to take that, Jean?

Jean Madar: I think it's a very different model. I mean, if you look at Rochas, Rochas is a brand we acquired. It's primarily focused in France and in Spain. That's where the bulk of the business is. And it's more of a prestige brand. The Soferino brand will be more of a high-end luxury brand, and it's designed to actually compete against the niche fragrances in this category. Of course, we're going to be bringing all of our scale and knowledge of the fragrance category, the power of our distribution, which should enable us to build out distribution more rapidly than somebody that's entering this category on their own.

Jean Madar: Thank you. Thank you.

Jean Madar: Yeah

Speaker Change: and then you can chime in.

Jean Madar: I think it's a very different model, I mean if you look at Rochas, Rochas is a...

Speaker Change: is a brand we acquired. It's primarily focused in France and in Spain, that's where the bulk of the business is, and it's more of a prestige brand.

Speaker Change: The Sofarino brand will be more of a high-end luxury brand in its designs.

Speaker Change: You know, the niche fragrances in this category.

Speaker Change: Of course, you know, we're going to be bringing all of our scale.

Speaker Change: and Knowledge of the Fragrance category, The Power of Our Distribution.

Jean Madar: But ultimately, it's really a very different business model. Yes, I would like to add that the thing that Rochas and Soferino have in common is that we are not being royalty. We're not paying royalty on sales. So we can reinvest more into NP. Royal keys typically are eight to nine percent. So we have an extra eight to nine percent. So this is another budget, an extra budget that we have to position this product in the store. And this is quite helpful.

Jean Madar: Yes, I would like to add that the thing that Rochas and Saussure Hinault have in common is that we are not paying royalties on sale. So we can reinvest more into A&E at www.interparfumsinc.com. This is another budget, an extra budget that we have to position this product in the store. And this is quite helpful.

Speaker Change: Yes, I would like to add that the thing that Rochas and Solferino have in common is that we are not paying royalty.

Speaker Change: We are not paying royalty on sales, so we can reinvest more into A&P.

Speaker Change: The Royalties typically are 8 to 9%. So we have an extra 8 to 9%.

Speaker Change: This is another budget, an extra budget that we have to position this product in the store. And this is quite helpful.

Jean Madar: Great, and my last question was going to be, is there any risk here to future licensing deals not going your way because you have the Soferino brand? Well, I don't think so. Soferino is an initiative that the company took because we saw the need, especially in Asia, for the brands that are less commercial, that have less name recognition, where the inside of the bottle, what we put in the bottle, is more important than the name. It's in reaction to a demand of products that are not commercial. So I don't think our license or will be unhappy if we are successful.

Hamed Khorsand: And my last question was going to be, is there any risk here of future licensing deals not going your way because you have the Soforino brand?

Speaker Change: Great, and my last question was going to be, is there any risk here to, you know, future licensing deals not going your way because you have the Soforino brand?

Jean Madar: I don't think so. Sol Serino is an initiative that the company took because we saw the need, especially in Asia, for brands that are less commercial, that have less name recognition, and where the inside of the bottle, what we put in the bottle, is more important than the name. It's in reaction to demand for products that are not commercial. So I don't think our licensors will be unhappy if we are successful. It's a different model, but we do not compete with Sol Serino. We do not compete with any of our designers or fashion designers.

Speaker Change: I don't think so.

Speaker Change: So Serino is an initiative that the company took.

Speaker Change: Because we saw the need, especially in Asia, for brands that are less commercial, that have less name recognition.

Speaker Change: where the inside of the bottle, what we put in the bottle, is more important than the name.

Speaker Change: It's in reaction to a demand of products that are not commercial. So I don't think our licensors will be unhappy if we are successful. It's a different...

Jean Madar: So it's a different, I don't want to say it's a different model, but we do not compete with Soferino. We do not compete with any of our designer or fashion partners.

Speaker Change: I don't want to say it's a different model, but we do not compete with Solcerino, we do not compete with any of our designers or fashion houses.

Michel Atwood: Yeah, and I would also add that all of our competitors have entered this segment. Cody has recently launched their own brand, and L'Oreal, you know, Pooch, have, you know, made acquisitions. Estee Lauder. Well, Estee Lauder is primarily exclusively in this segment, but yeah, I mean, all of our competitors have entered this segment and are playing in this segment, and it's not really a concern. Thank you.

Jean Madar: Yeah, and I would also add, all of our competitors have entered the segment. Cody has recently launched their own brand. And L'Oreal, you know, Pooch, have made it. Well, let's do a lot of this primarily exclusively in the segment. But yeah, I mean, all of our competitors have entered the segment and are playing in the segment. And it's not really a concern.

Speaker Change: Yeah, and I would also add, I mean, all of our competitors have, you know, entered this segment. Cody has recently launched their own brand.

Hamed Khorsand: Okay, thank you.

Speaker Change: and L'Oreal.

Speaker Change: Pooch and Estee Lauder have made acquisitions, while Estee Lauder is primarily exclusively in this segment. But yeah, all of our competitors have entered this segment and are playing in this segment and it's not really a concern.

Hamed Khorsand: Okay, thank you.

Michel Atwood: We have reached the end of our question.

Michel Atwood: We have reached the end of our question and answer session. I would like to turn the conference back over to Michel Atwood for his closing remarks.

Michel Atwood: Question and answer session. I would like to turn the conference back over to Michel Atwood for closing remarks. All right, well thank you again all for joining our call today.

Speaker Change #100: Okay, thank you.

Speaker Change #100: We have reached the end of our question and answer session. I would like to turn the conference back over to Michel Atwood for closing remarks.

Michel Atwood: Thank you again for joining our call today. Before I end the call, I'd like to just announce a few upcoming events. In September, I will be joining Piper Sandler in Nashville and Wells Fargo in Dana Point. If you're interested in attending these events, please reach out to their respective sales representatives. We'll also be hosting our annual shareholder meeting here in New York at our offices on September 17. If you have any additional questions or interest in joining us for our annual shareholder meeting, please contact Karin Daly from the Equity Group or an Investor Relations representative. Her telephone number and email address can be found in our most recent earnings release. We look forward to the next conference call. Thank you, and have a good day and a great summer.

Michel Atwood: Before I end the call, I'd like to just announce a few upcoming events. In September, I will be joining Piper Sandler in Nashville and Wells Fargo in data points. If you're interested in attending these events, please reach out to the respective sales representatives.

Michel Atwood: Alright, well thank you again all for joining our call today. Before I end the call, I'd like to just announce a few upcoming events. In September , I will be joining Piper Sandler in Nashville.

Michel Atwood: and Wells Fargo in Danapoint. If you're interested in attending these events, please reach out to their respective sales representatives. We'll also be hosting our annual shareholder meeting here in New York at our offices on September 17th.

Karin Daly: We will also be hosting our annual shareholder meeting here in New York at our offices on September 17th. If you have any additional questions or interest in joining us for the annual shareholder meeting, please contact Karin Daly from the Equity Group or an investor relations representative. Her telephone number and email address can be found on our most recent earnings release. We look forward to the next conference call.

Michel Atwood: If you have any additional questions or interest in joining us for our annual shareholder meeting, please contact Karin Daly from the Equity Group or Investor Relations representative.

Michel Atwood: Her telephone number and email address can be found in our most recent earnings release.

Operator: Thank you and have a good day and a great summer. Thank you. This will continue to be a conference.

Michel Atwood: We look forward to the next conference call. Thank you and have a good day and a great summer.

Operator: Thank you. This concludes today's conference. You may disconnect at this time, and thank you for your participation.

Operator: You may disconnect at this time, and thank you for your participation. Thank you. Thank you so much for joining us today.

Speaker Change #101: Thank you. This concludes today's conference.

Speaker Change #102: You may disconnect at this time, and thank you for your participation.

Speaker Change #102: Thank you.