Adjusted EPS was $0.40, down year-over-year but ahead of consensus expectations.
Dealer inventory is down 17% year-over-year excluding snowmobiles, with healthier levels across most product categories.
Generated approximately $320 million in operating cash flow and $290 million in free cash flow, highest Q2 operating cash flow since 2020.
Gross margin declined due to mix and promotions, with warranty costs lower due to quality focus.
Margins were pressured by negative mix, incentive compensation, and elevated promotions, but operational efficiencies and quality initiatives are improving results.
Off-Road sales declined 8%, On Road sales down 1%, and Marine sales up 16%.
Recognized a noncash goodwill impairment charge related to On Road segment due to continued decline in financial performance.
Second quarter adjusted sales declined 6%, primarily due to planned shipment reductions and elevated promotional activity.
Shipments were down just 4%, better than expectations in April, with retail flat year-over-year and share gains across every segment.
Impact of Tariff Agreements on Sourcing and Pricing Strategy
The recent agreement to keep tariffs on European goods at 15% and eliminate tariffs on U.S. exports to Europe is a significant positive development for Interparfums.
This tariff agreement reduces the previously feared 30% to 50% tariffs, easing cost pressures and supply chain disruptions.
The company has already started moving towards alternative sourcing outside China to mitigate tariff impacts, especially for components like plastic caps and pumps.
Interparfums is implementing selective pricing increases, averaging around 2%, to offset higher tariffs, primarily in the U.S. where tariffs on finished goods are more impactful.
The company expects to absorb some short-term impacts from sourcing shifts and tariffs without major disruptions, thanks to proactive planning.
The improved trade environment provides greater clarity and supports the company's long-term sourcing and pricing strategies.
Dafinchi