Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

Overview

We operate in the fragrance business, and manufacture, market and distribute a wide array of prestige fragrances and fragrance related products. We manage our business in twosegments, European based operations and United States based operations. Certain prestige fragrance products are produced and marketed by our European based operations through our 72% owned subsidiary in Paris, Interparfums SA, which is also a publicly traded company as 28% of Interparfums SA shares trade on the Euronext.

We produce and distribute fragrance products through our European based operations primarily under license agreements with brand owners, and European based fragrance product sales represented approximately 68%, 65% and 65% of net sales for 2025, 2024and 2023, respectively. We have built a portfolio of prestige brands, which include Boucheron, Coach, Goutal, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste, Lanvin, Longchamp, Moncler, Montblanc, Rochas, Solférino and Van Cleef & Arpels, whose products are distributed in over 120countries around the world.

Through our United States based operations, we also produce and distribute fragrances and fragrance related products. United States based operations represented 32%, 35% and 35% of net sales in 2025, 2024and 2023, respectively. These fragrance products are sold primarily pursuant to license or other agreements with the owners of the Abercrombie & Fitch, Anna Sui, Donna Karan/DKNY, Emanuel Ungaro, Ferragamo, Graff, GUESS, Hollister, MCM, Oscar de la Renta, and Roberto Cavalli brands.

Substantially all of our prestige fragrance brands are licensed from unaffiliated third parties, and our business is dependent upon the continuation and renewal of such licenses. With respect to the Company's largest brands, we license the Jimmy Choo, Coach, Montblanc, GUESS, Lacoste, Donna Karan/DKNY and Ferragamo brand names. This diversified portfolio of top brands represented 77%, 76% and 73% of total sales in 2025, 2024, and 2023, respectively.

As a percentage of net sales, product sales for the Company's largest brands were as follows:

Quarterly sales fluctuations are influenced by the timing of new product launches as well as the third and fourth quarter holiday season. In certain markets where we sell directly to retailers, seasonality is more evident. We primarily sell directly to retailers in France, the United States, and Italy.

We grow our business in two distinct ways. First, we grow by adding new brands to our portfolio, through new licenses or other arrangements, or outright acquisitions of brands. Second, we grow through the introduction of new products and by supporting new and established products through advertising, merchandising and sampling, as well as phasing out underperforming products, so we can devote greater resources to those products with greater potential. The economics of developing, producing, launching and supporting products influence our sales and operating performance each year. The introduction of new products may have some cannibalizing effect on sales of existing products, which we take into account in our business planning.

Our business is not capital intensive, and it is important to note that we do not own manufacturing facilities. We act as a general contractor and source our needed components from our suppliers. These components are received and stored directly at our third party fillers or received at one of our distribution centers. For those components received at one of our distribution centers, based upon production needs, the components are subsequently sent to one of several third party fillers, which manufacture the finished product for us and then deliver them to one of our distribution centers.

As with any global business, many aspects of our operations are subject to influences outside our control. We believe we have a strong brand portfolio with global reach and potential. As part of our strategy, we plan to continue to make investments behind fast-growing markets and channels to grow market share.

Our reported net sales are impacted by changes in foreign currency exchange rates as approximately 50% of net sales of our European based operations are denominated in U.S. dollars, while almost all costs of our European based operations are incurred in euro. We address certain financial exposures through a controlled program of risk management that includes the use of derivative financial instruments and primarily enter into foreign currency forward exchange contracts to reduce the effects of fluctuating foreign currency exchange rates.

Recent Important Events

Please see our discussion of Recent Important Events, which is incorporated by reference to Note 2to the Consolidated Financial Statements contained in this 2025Annual Report on Form 10-K filed with the United States Securities and Exchange Commission ("SEC") for the year ended December 31, 2025.

Discussion of Critical Accounting Policies

We make estimates and assumptions in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations. These accounting policies generally require our management's most difficult and subjective judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management of the Company has discussed the selection of significant accounting policies and the effect of estimates with the Audit Committee of the Board of Directors.

Long-Lived Assets

We evaluate indefinite-lived intangible assets for impairment at least annually during the fourth quarter, or more frequently when events occur or circumstances change, such as an unexpected decline in sales, that would more likely than not indicate that the carrying value of an indefinite-lived intangible asset may not be recoverable. When testing indefinite-lived intangible assets for impairment, the evaluation requires a comparison of the estimated fair value of the asset to the carrying value of the asset. The fair values used in our evaluations are estimated based upon discounted future cash flow projections using a weighted average cost of capital of 8.34%. The cash flow projections are based upon a number of assumptions, including future sales levels and future cost of goods and operating expense levels, as well as economic conditions, changes to our business model or changes in consumer acceptance of our products which are more subjective in nature. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded.

We believe that the assumptions we have made in projecting future cash flows for the evaluations described above are reasonable. However, if future actual results do not meet our expectations, we may be required to record an impairment charge, the amount of which could be material to our results of operations.

At December 31, 2025indefinite-lived intangible assets aggregated $153.5million. The following table presents the impact a change in the following significant assumptions would have had on the calculated fair value in 2025assuming all other assumptions remained constant:

Intangible assets subject to amortization are evaluated for impairment testing whenever events or changes in circumstances indicate that the carrying amount of an amortizable intangible asset may not be recoverable. If impairment indicators exist for an amortizable intangible asset, the undiscounted future cash flows associated with the expected service potential of the asset are compared to the carrying value of the asset. If our projection of undiscounted future cash flows is in excess of the carrying value of the intangible asset, no impairment charge is recorded. If our projection of undiscounted future cash flows is less than the carrying value of the intangible asset, an impairment charge would be recorded to reduce the intangible asset to its fair value. The cash flow projections are based upon a number of assumptions, including future sales levels and future cost of goods and operating expense levels, as well as economic conditions, changes to our business model or changes in consumer acceptance of our products which are more subjective in nature. In those cases where we determine that the useful life of long-lived assets should be shortened, we would amortize the net book value in excess of the salvage value (after testing for impairment as described above), over the revised remaining useful life of such asset thereby increasing amortization expense. We believe that the assumptions we have made in projecting future cash flows for the evaluations described above are reasonable.

In evaluating whether the Lanvin brand names and trademarks are definite or indefinite-lived, we applied the provisions of ASC topic 350-30-35-3and concluded that the contraction provisions related to the repurchase option, originally exercisable in 2025 and amended to 2027, constrain the useful life of the Lanvin brand names and trademarks to the Company. Thus, the asset cannot be considered indefinite-lived. If exercised, Lanvin will have an obligation to pay the exercise price and the Company will be required to convey the Lanvin brand names and trademarks back to Lanvin. Although considered finite-lived due to the contractual provisions, in accordance with ASC topic 350-30-35-8, the asset is not being amortized as the exercise price (residual value) of the intangible asset exceeds its carrying value.

If the repurchase option expires and is not exercised, then the Lanvin brand names and trademarks would be expected to contribute directly to the future cash flows of our Company and the useful life would be considered to be indefinite at such time.

Quantitative Analysis

During the three-year period ended December 31, 2025, we have not made any material changes in our assumptions underlying these critical accounting policies or to the related significant estimates. The results of our business underlying these assumptions have not differed significantly from our expectations.

While we believe the estimates we have made are proper and the related results of operations for the period are presented fairly in all material respects, other assumptions could reasonably be justified that would change the amount of reported net sales, cost of sales, and selling, general and administrative expenses as they relate to the provisions for anticipated sales returns, allowance for doubtful accounts and inventory obsolescence reserves. For 2025, had these estimates been changed simultaneously by 5% in either direction, our reported gross profit would have increased or decreased by approximately $0.7 million and selling, general and administrative expenses would have changed by approximately $0.1 million. The collective impact of these changes on 2025operating income, net income attributable to Interparfums, Inc., and net income attributable to Interparfums, Inc. per diluted share would be an increase or decrease of approximately $0.8 million, $0.5 million and $0.1, respectively.

Results of Operations

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Net sales in 2025increased 2% compared to 2024on a reported basis. On an organic basis, sales were also up 2% as compared to 2024 with foreign exchange gains of 2% offsetting the negative impacts of the Dunhill exit in 2024. The average dollar/euro exchange rate for 2025was 1.13, compared to 1.08 in 2024.

For European based operations, sales grew by 7% for the full year 2025 on a reported basis and 4% on an organic basis, driven by sustained momentum from brands. The success of the Jimmy Choo I Want Choowomen's franchise has continued to strengthen since its launch in 2021, particularly in the United States, and, when combined with the strong performance of the Jimmy Choo Manfranchise, helped drive 6% growth of the brand in 2025 as compared to 2024. Coach fragrance sales increased 15% for the full year, reinforcing its timeless, multi-generational appeal thanks to the strength of the brand's long-established women's and men's lines, which was further boosted by two new successful launches in the first half of 2025. Sales of our Montblanc brand finished the year on a high note, reflecting the success of the new Montblanc Explorer Extremeline in the second half of 2025 and the strength of the Montblanc Legendline. This strong fourth quarter performance in combination with favorable foreign exchange helped to offset the sales softness we experienced in the first part of 2025, resulting in full year 2025 sales that were broadly in line with 2024. Lacoste fragrance sales grew 28%, reaching $108 million and exceeding our initial expectations of $100 million after just the second full year under our management. Our recently launched and proprietary brand Solférino is off to a good start in its first six months of operation. We remain on track to expand this artisanal fragrance house into an additional 50 doors in the first half of 2026.

For United States based operations, sales declined 6% in 2025on a reported basis. Excluding the phase-out of Dunhill fragrances that was completed in August 2024, full year 2025 United States based operations sales declined 3%. The fourth quarter finished on a high note with sales increasing 4% on a reported basis and 2% on an organic basis. As expected, fragrance sales of GUESS and Donna Karan/DKNY each returned to growth in the fourth quarter, posting sales increases of 7% and 8%, respectively. The GUESS Iconicand Donna Karan Cashmere Mistfranchises performed well, supported by the brands' enduring global popularity, especially during the holiday season. For the full year, GUESS sales were essentially stable and Donna Karan/DKNY declined by 4%, due largely to the unfavorable base period in 2024 that included the launch of DKNY 24/7. Roberto Cavalli fragrance sales rose 33% in both the 2025 fourth quarter and full year, underscoring the substantial brand elevation achieved during its second full year under our management. We executed a series of blockbuster and innovative launches during 2025, including Roberto Cavalli Serpentineand Just Cavalli Give Me Magic. MCM fragrance sales rose 40% in the fourth quarter and 17% for the full year driven by the continued performance of the MCM Collectionlaunched in early 2025.

While macroeconomic headwinds linger in certain key markets and we continue to see trade destocking, we are encouraged by our performance in 2025 as we have been able to maintain market share. We remain cautiously optimistic about 2026, where we will continue to execute on our strategy of launching extensions on all our key brands, while preparing for what we expect will be a more favorable operating environment in 2027 and beyond, as we roll out major innovation on our new licenses and on some of our larger brands, as well as potentially securing new brands and licenses. While the pace of growth in the market is starting to normalize closer to historical levels following massive growth seen over the past few years, the power of our diverse brand portfolio, in combination with our agile operating model, should help us gain market share.

As in the past, we hope to benefit from our strong financial position to potentially acquire one or more brands, either on a proprietary basis or as a licensee. However, we have no certainty that any new license or acquisition agreements will be consummated.

Net Sales to Customers by Region

Most of our regions grew in 2025. Our largest market, North America, achieved sales growth of 3% in 2025 compared to 2024 driven by sustained market growth and strong performance of the Jimmy Choo, Coach and Donna Karan/DKNY brands. Western Europe grew sales 5% behind the continued success of Lacoste and Cavalli, and the Montblanc Explorer Extremelaunch as well as a favorable exchange rate. Asia Pacific sales declined 4% driven by distribution challenges in South Korea and India which were partially offset by growth in Australia, China and Japan. We have addressed the distribution challenges in Korea through the establishment of a new subsidiary. Despite strong results on Cavalli and GUESS, the Middle East and Africa declined 4% primarily due to the run-off of the Dunhill license which was completed in August 2024. Excluding the impact of Dunhill, net sales in Middle East and Africa increased 4%. Eastern Europe grew 2% reflecting more normalized sales levels despite the ongoing conflict in the region, and Central and South America achieved top line growth of 11% in 2025 compared to 2024 fueled by the strength of Lacoste, Coach and GUESS fragrances.

Gross Profit Margin

The Company's gross margin percentage was 63.6% in 2025as compared to 63.9% in 2024and 63.7% in 2023. Overall, tariffs resulted in $12.8 million in higher costs in 2025 or 0.9% of sales. We have been able to partially mitigate these impacts through favorable segment and brand mix which each contributed 0.2% of margin expansion as well as pricing, leaving us with a gross margin erosion of 0.3% of sales.

For European based operations, gross profit margin as a percentage of net sales was 66.1%, 67.0% and 67.2% in 2025, 2024and 2023, respectively. The bulk of the 0.9% erosion in gross margin was driven by tariffs which represented $9 million in 2025. For United States based operations, gross profit margin was 58.2%, 57.9% and 57.0% in 2025, 2024 and 2023, respectively. The year-over-year increase was driven by favorable brand mix driven by the Dunhill discontinuation, channel mix, and pricing actions which more than offset the negative $4.2 million impact of tariffs.

We expect tariffs will continue to represent a significant headwind in 2026 as we annualize these tariffs for the full year. We continue to actively work on cost saving programs and tariff mitigating strategies to help limit these impacts. We target that these programs, in combination with the full year impacts of the price increases we took in August 2025, will enable us to maintain our gross margins flat in 2026.

Costs relating to purchase with purchase and gift with purchase promotions are reflected in cost of sales, and aggregated $54.6 million, $61.5million and $52.3million in 2025, 2024and 2023, respectively, and represented 3.7%, 4.2% and 4.0% of net sales, respectively.

Generally, we do not bill customers for shipping and handling costs and such costs, which are included in selling, general and administrative expenses in the consolidated statements of income. As such, our Company's gross margins may not be comparable to other companies, which may include these expenses as a component of cost of sales.

Selling, General and Administrative Expenses

The Company's selling, general and administrative expenses as a percentage of nets sales were 45.5%, 44.7% and 44.6% in 2025, 2024and 2023, respectively. The percentage of net sales increased by 0.8% from the prior year driven by higher promotional and advertising activities which represent 0.5% of the increase, as well as unfavorable segment mix.

For European based operations, selling, general and administrative expenses increased 7% and 9% in 2025and 2024, respectively, as compared to the corresponding prior year period, and represented 46.7%, 46.3% and 47.1% of net sales in 2025, 2024and 2023, respectively. The increases in selling, general and administrative expenses stem from a combination of higher promotion and advertising expenditures and the increased costs were broadly in line with fluctuations in sales on other selling, general and administrative cost buckets.

For United States based operations, selling, general and administrative expenses decreased 2% in 2025 after increasing 14% in 2024, as compared to the corresponding prior year period, and represented 42.0%, 40.5% and 39.7% of net sales in 2025, 2024and 2023, respectively. While we endeavored to generate efficiencies, and were ultimately able to reduce costs overall, the increases in selling, general and administrative expenses as a percentage of net sales were largely driven by lower sales in 2025 with the discontinuation of Dunhill in 2024, as we protected promotion and advertising investments and made the choice not to reduce the infrastructure and employee headcount in light of new licenses which will be joining our portfolio in future years.

Promotion and advertising included in selling, general and administrative expenses aggregated $294.7million, $280.5million and $261.3million in 2025, 2024and 2023, respectively. Promotion and advertising represented 19.8%, 19.3% and 19.8% of net sales in 2025, 2024and 2023, respectively. Promotion and advertising are integral parts of our industry, and we continue to invest heavily to support new product launches and to build brand awareness. We believe that our promotion and advertising efforts have had a beneficial effect on sales. Additionally, as 2025 saw a lighter innovation program than in prior years, the Company focused on increasing promotional and advertising spending to protect sell-out and support the continued success of our existing brands and fuel our new brands, Lacoste and Roberto Cavalli. We also invested disproportionally in the launch and brand building of our proprietary brand, Solférino. Long-term, we continue to anticipate that on a full year basis, promotion and advertising expenditures should aggregate approximately 21% of net sales. In 2026, we expect we will continue to make progress towards this goal as we ramp up investments to support the launches of Goutal in 2026 and prepare for the launches of the new fragrances under our Longchamps license and Off-White trademark in 2027.

Royalty expense included in selling, general and administrative expenses aggregated $121.7million, $117.8million and $103.8million in 2025, 2024and 2023, respectively. Royalty expense represented 8.2%, 8.1% and 7.9% of net sales in 2025, 2024and 2023, respectively, due to changes in brand mix.

Impairment Loss

The Company reviews intangible assets with indefinite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There was an impairment charge for trademarks with indefinite useful lives of $4.0 million in 2024, relating to our Rochas fashion business. There were no impairment charges for trademarks with indefinite useful lives in 2025 and 2023.

Income from Operations

As a result of the above analysis regarding net sales, gross profit margins and selling, general and administrative expenses, our operating margins aggregated 18.2%, 18.9% and 19.1% for the years ended December 31, 2025, 2024and 2023, respectively.

Other Income and Expenses

Overall, other income and expense was a gain of $1.0 million in 2025 as compared to losses of $6.4 million, and $1.8 million in 2024, and 2023, respectively. The main drivers of the change between 2025 and 2024 are discussed in more detail below. These include a one-time gain of $7.6 million related to a debt extinguishment, a hurt on foreign currency of $3.7 million, a gain on interest income related to cash and cash equivalents and short-term investments of $1.2 million, and a reduction in interest expense on borrowings of $0.7 million.

Interest expense is primarily related to the financing of brand and licensing acquisitions and the financing of the headquarters of Interparfums SA. The decrease in interest expense in 2025 is related to decreases in interest rates in 2025. In December 2022, to finance the acquisition of the Lacoste trademark, the Company entered into a $58.8 million (€50 million) four-year loan agreement. The loan agreement bears interest at Euribor-1 month rates plus a margin of 0.825%. This variable rate debt was swapped for variable interest rate debt with a maximum rate of 2% per annum. Additionally, in April 2021, we completed the acquisition of the headquarters of Interparfums SA. The acquisition was financed by a 10-year approximately $141 million (€120 million) bank loan which bears interest at one-month Euribor plus 0.75%. Approximately $94 million (€80 million) of the variable rate debt was swapped for fixed interest rate debt with a maximum interest rate of 2% per annum. The swap effectively exchanges the variable interest rate to a fixed rate of approximately 1.1%. In July 2024, the Company entered into a $47 million (€40 million) three-year loan agreement that bears a fixed interest rate of 4.03%. Additionally in June 2025, the Company entered into a $23.5 million (€20 million) three-year loan agreement that bears a fixed interest rate of 3.0% and into a $35.3 million (€30 million) three-year loan agreement which bears interest at one-month Euribor plus 0.88%. The three most recent loans were used to improve our short-term cash position. Long-term debt including current maturities aggregated $176.0 million, $157.3 million and $157.5 million as of December 31, 2025, 2024 and 2023, respectively.

We enter into foreign currency forward exchange contracts to manage exposure related to receivables from unaffiliated third parties denominated in a foreign currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency. Approximately 50% of net sales of our European based operations are denominated in U.S. dollars. Gains and losses in derivatives designated as hedges are accumulated in other comprehensive income and gains and losses in derivatives not designated as hedges are included in (gain) loss on foreign currency on the accompanying consolidated income statements. Such gains and losses were immaterial in each 2025, 2024, and 2023.

Interest and investment income represents interest earned on cash and cash equivalents and short-term investments and realized and unrealized gains and losses on marketable securities. Interest income was $5.8 million in 2025 compared to $4.6 million in 2024.

In December 2025, the Company entered into an amendment with a Licensor that modifies some of the Company's obligations relative to an existing debt. A gain of $7.6 million was recorded within other income and expense related to this debt extinguishment.

Income Taxes

Our consolidated effective tax rate was 23.3%, 24.2% and 24.8% in 2025, 2024and 2023, respectively.

The effective tax rate for European based operations was 24.2%, 25.8% and 27.3% in 2025, 2024and 2023, respectively. The lower effective tax rate in 2025 compared to 2024 resulted from a $3 million favorable outcome in 2025 to our mutual agreement procedure between the French and United States tax authorities in which we were able to reclaim the tax assessment paid in France in 2023. The gain was offset by a $1 million one-time tax assessment in 2025 included in the tax expense as a result of a tax audit conducted for the 2022 and 2023 tax years. Our higher effective tax rate in 2023 was driven by a one-time tax assessment of € 2.8 million ($3.1 million) included in tax expense as the result of a tax audit conducted for the 2020 and 2021 tax years, and which was recovered in 2025 as discussed above.

The effective tax rate for United States based operations was 21.5%, 20.4% and 19.3% in 2025, 2024and 2023, respectively. Our effective tax rate differs from the 21% statutory rate in the United States as it is a blended rate across multiple jurisdictions, and takes into account benefits received from the exercise of stock options, deductions we are allowed for a portion of our foreign derived intangible income, and by state and local taxes. Other than as discussed above, we did not experience any significant changes in tax rates, and none were expected in the jurisdictions where we operate.

The Company estimated the effect of its foreign derived intangible income ("FDII") and recorded a tax benefit of $2.2 million, $2.4 million and $2.4 million as of December 31, 2025, 2024and 2023, respectively. Share-based compensation resulted in a discrete tax benefit of $0.02 million, $0.7 million and $1.2 million in 2025, 2024and 2023, respectively.

Net Income

Net income attributable to Interparfums, Inc. steadily increased, and was $168.4million, $164.4million and $152.7million in 2025, 2024and 2023, respectively.

Net income attributable to European based operations was $143.9million, $140.1million and $124.0million in 2025, 2024and 2023, respectively, while net income attributable to United States based operations was $68.8million, $68.9million and $63.8million in 2025, 2024and 2023, respectively. The significant fluctuations in net income for both European and United States based operations are directly related to the previous discussions relating to changes in sales, gross profit margins, and selling, general and administrative expenses.

The noncontrolling interest arises from our 72% owned subsidiary in Paris, Interparfums SA, which is also a publicly traded company as 28% of Interparfums SA shares trade on the Euronext. Net income attributable to the noncontrolling interest is directly related to the profitability of our European based operations and aggregated 27.4%, 27.7% and 28.1% of European based operations net income in 2025, 2024and 2023, respectively. Net profit margins attributable to Interparfums, Inc. aggregated 11.3%, 11.3% and 11.6% in 2025, 2024and 2023, respectively.

Liquidity and Capital Resources

Our conservative financial tradition has enabled us to amass significant cash balances. As of December 31, 2025, we had $295.2million in cash and cash equivalents and short-term investments, most of which are held in euro by our European based operations and is readily convertible into U.S. dollars. We have not had any liquidity issues to date, and do not expect any liquidity issues relating to such cash and cash equivalents and short-term investments.

As of December 31, 2025, working capital aggregated $683million. Approximately 78% of the Company's total assets are held by European based operations, and approximately $293 million of trademarks, licenses and other intangible assets are also held by European based operations.

The Company is party to a number of licenses and other agreements for the use of trademarks and rights in connection with the manufacture and sale of its products expiring at various dates through 2049. In connection with most of these license agreements, the Company is subject to minimum annual advertising commitments, minimum annual royalties and other commitments. See Item 8. Financial Statements and Supplementary Data - Note 11- Commitments in this annual report on Form 10-K. Future advertising commitments are estimated based on planned future sales for the license terms that were in effect at December 31, 2025, without consideration for potential renewal periods and do not reflect the fact that our distributors share our advertising obligations.

The Company hopes to continue to benefit from its strong financial position to potentially acquire oneor more brands, either on a proprietary basis or as a licensee. In January 2026, we entered into long-term global licensing agreements for the creation, development and distribution of fragrances and fragrance related products under the David Beckham and Nautica brands, effective April 1, 2028 and January 1, 2030, respectively. In July 2025, our 72% owned French subsidiary, Interparfums SA, signed an exclusive fragrance license agreement with Longchamp running through December 31, 2036. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The first launch is expected in 2027. In June 2025, our 72% owned French subsidiary, Interparfums SA, acquired all intellectual property rights relating to Maison Goutal held by Amorepacific Europe, which is operating the Goutal brand under an existing license agreement that expired on December 31, 2025, when Interparfums SA began commercial use of the fragrance brand. Additionally, in June 2025, we renewed the Coach license agreement for an additional five-year term, extending the license through June 30, 2031.

In December 2024, our 72% owned French subsidiary, Interparfums SA, acquired all Off-White brand names and registered trademarks for Class 3 fragrance and cosmetic products, subject to an existing license that expired on December 31, 2025, when Interparfums SA began commercial use of the fragrance brands. Additionally in December 2024, we renewed the Van Cleef & Arpels license agreement for an additional nine-year term, beginning January 1, 2025. In July 2023, we entered into a global licensing agreement for the creation, development and distribution of fragrances and fragrance related products under the Roberto Cavalli brand. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. This license took effect in July 2023 and began shipping products in February 2024.

In December 2022, we entered into a long-term global licensing agreement for the creation, development and distribution of fragrances and fragrance related products under the Lacoste brand. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. This new license took effect, and products started to ship in January 2024.

Cash provided by operating activities aggregated $214.9million, $187.6million, and $105.8million in 2025, 2024and 2023, respectively. In 2025, working capital items used $20.7 million in cash from operating activities, as compared to $51 million in 2024and $103.2 million in 2023. Although, from a cash flow perspective, accounts receivable is up 8% from year-end 2024, the balance is reasonable based upon 2025record sales levels. While days sales outstanding was 73 days, up from 66 days and 62 days in 2024and 2023, respectively, driven by changes in our channel mix, we are still seeing strong collection activity and do not anticipate any issues with collections of accounts receivable. From a cash flow perspective, inventory levels are down 15% and inventory days on hand decreased to 244 days in 2025, as compared to 259 days in 2024, and 252 days in 2023. These decreases are a direct result of the Company's efforts to manage down our inventory levels. We have seen increased conversion of raw materials into finished goods in recent years resulting in finished goods making up 63% of our inventory levels at both December 31, 2025 and 2024 as compared to 57% at December 31, 2023. Due to past supply constraints, we had strived to carry more inventory overall, source the same components from multiple suppliers and when possible, manufacture products closer to where they are sold. These constraints have largely abated, and we are gradually reversing some of these previous interventions. We are seeing the impacts of these recent inventory management efforts and will continue to work to optimize inventory levels.

Cash flows used in investing activities in 2025reflect the purchases and sales of short-term investments. These investments consist of certificates of deposit with maturities greater than threemonths, marketable equity securities and other contracts. At December 31, 2025, approximately $2.4 million of certificates of deposit contain penalties where we would forfeit a portion of the interest earned in the event of early withdrawal.

In March 2025, the Company paid approximately $19.7 million for the purchase of the Goutal trademark. Additionally, during the second and third quarters the Company purchased approximately $18.2 million of additional property in Paris attached to its French headquarters.

Our business is not capital intensive as we do not own any manufacturing facilities. On a full year basis, spend on tools and molds fluctuates depending on our new product development calendar and is typically not material. Capital expenditures also include amounts for office fixtures, computer equipment and industrial equipment needed at our distribution centers.

Cash flows used in financing activities in 2025 predominately reflect issuances and repayment of debt and payment of dividends to stockholders.

In June 2025, the Company entered into a $23.5 million (€20 million) three-year loan agreement that bears a fixed interest rate of 3.0% and into a $35.3 million (€30 million) three-year loan agreement that bears a variable interest rate of Euribor 1-month plus a margin of 0.88%. Additionally, in July 2024, the Company entered into a $47 million (€40 million) three-year loan agreement that bears a fixed interest rate of 4.03%.

Our short-term financing requirements are expected to be met by available cash on hand at December 31, 2025, and by short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2025consist of $45 million unsecured revolving lines of credit provided by a consortium of domestic commercial banks and approximately $9.4 million in credit lines provided by a consortium of international financial institutions. Balances due from short-term borrowings totaled $9.4million and $8.3million as of December 31, 2025and 2024, respectively.

We believe that funds provided by or used in operations can be supplemented by our present cash position and available credit facilities, so that they will provide us with sufficient resources to meet all present and reasonably foreseeable future operating needs.

Inflation rates in the U.S. and foreign countries in which we operate did not have a significant impact on operating results for the year ended December 31, 2025, however, we have already started to see the impacts of tariffs on our cost structure and have adjusted our pricing accordingly. As such, we anticipate potential inflationary impacts in the first quarter of 2026 and beyond as our suppliers potentially adjust their pricing as well.