Interparfums (IPAR) 2026年第三季度财报电话会：销售额持平，上调业绩指引

核心要点

• 2026年第三季度净销售额持平于4.30亿美元。前九个月销售额增长1%，主要得益于欧洲业务的增长抵消了美国业务的下滑。
• 前九个月净利润从上年同期的1.40亿美元（摊薄后每股收益4.36美元）增至1.42亿美元（摊薄后每股收益4.43美元）。
• 受有利的业务板块、品牌及渠道结构、更低的存货报废成本以及关税退税推动，第三季度毛利率上升360个基点至67.1%。
• 公司将2026年净销售额预期从14.8亿美元上调至约14.9亿美元，同时维持摊薄后每股收益4.85美元的指引不变。
• 蔻驰（Coach）第三季度销售额增长23%，年初至今增长15%。万宝龙（Montblanc）当季增长12%，前九个月增长8%；GUESS年初至今增长7%。
• 管理层预计，在主要核心系列发布以及来自珑骧（Longchamp）、Off-White和彪马（Puma）新产品的支持下，2027年和2028年的增长将有所改善。这些预期仍受地缘政治、汇率、消费需求和成本压力的影响。

核心财务数据

前七大品牌贡献了年初至今82%的销售额，同比增长6%。直供零售渠道（Direct-to-retail）销售额占总销售额的42%，同比增长8%。

Interparfums在前九个月的利润表中确认了1640万美元的关税退税，其中包括计入销售成本的1480万美元、销售及管理费用（SG&A）中的100万美元以及60万美元的利息。管理层预计，此前未确认的另外140万美元退税将在第四季度主要计入销售成本。

业务与运营表现

欧洲业务第三季度销售额增长4%，其中内生性增长为3%，新品牌贡献1%，部分被1%的汇率逆风所抵消。前九个月销售额增长1%。第三季度毛利率达到70.8%，上升480个基点。

美国业务第三季度销售额下降7%。受供应链中断影响，约1000万美元的礼盒装出货延迟，预计将在第四季度确认。管理层表示，若剔除该时间差影响，季度销售额本应持平。前九个月美国销售额增长3%，若剔除出货延迟因素则增长6%。

前九个月北美销售额增长4%。亚太地区以及中南美洲均增长12%。相比之下，东欧地区下降15%，而中东和非洲地区在运营困难和持续的地区冲突影响下下滑19%。

蔻驰（Coach）仍是表现最强劲的主力品牌，年初至今销售额增长15%。管理层表示，现有产品系列、衍生产品以及计划推出的重磅新品有望支撑双位数增长。前九个月，Jimmy Choo增长5%，GUESS增长7%，Roberto Cavalli增长6%。

法国鳄鱼（Lacoste）年初至今下降9%，但在第三季度恢复增长4%。唐可娜儿（Donna Karan/DKNY）因推新节奏和礼盒延迟当季下滑9%，但年初至今仍增长4%。菲拉格慕（Ferragamo）在第一季度大跌22%后，前九个月降幅收窄至2%。

Interparfums正在重构古特尔（Annick Goutal）的分销渠道，并通过八家布鲁明戴尔（Bloomingdale's）百货门店及线上渠道在美国重新推出该品牌。管理层还在筹备珑骧（Longchamp）和Off-White于2027年的首批香水发布。彪马（Puma）男女生活方式香水系列计划于2027年下半年推出。

管理层业绩指引

Interparfums将2026年全年销售额预期从14.8亿美元上调至约14.9亿美元，并维持摊薄后每股收益4.85美元的指引。该每股收益指引计入了1790万美元关税退税的收益，公司将部分退税用于补充广告与宣传预算，并抵消更高的关税与物流成本。

管理层预计全年毛利率将提升约150个基点。其中约110个基点预计来自关税退税，其余则受品牌与渠道结构优化以及成本增效项目推动。退税带来的提振效应预计不会在2027年持续体现。

全年广告与宣传支出预计将接近净销售额的21%。管理层将该水平视作常规基准，并表示视新品发布的推广支持需求而定，2027年的支出可能会略高。

首席财务官（CFO）表示，2026年业绩展望意味着第四季度销售额将下降约3%，其中包括约两个百分点的汇率压力。美国业务预计将受益于延迟礼盒装出货的收入确认。

风险与关注事项

• 中东冲突导致第三季度内生性增长降低约一个百分点，前九个月增长降低约两个百分点。
• 东欧和中东地区依然疲软，管理层表示这两个地区均未出现明显改善。
• 欧元走软正在给第四季度带来汇率逆风。
• 石油和能源成本上涨导致运输、玻璃制造和塑料成本上升。航运路线延长进一步加大了物流压力。
• 前九个月关税带来了1190万美元的额外净支出，不过关税退税超额抵消了部分财报所列影响。
• 管理层将消费需求放缓、地缘政治风险、关税以及供应商定价列为2027年的不确定性因素。

分析师问答要点

礼盒装延期与土耳其的组装作业以及集装箱运输时间大幅延长有关。该供应商的进度落后了约30至45天。为降低类似风险再次发生的概率，Interparfums计划将2027年礼盒装的接收时间提前60至90天，其中圣诞礼盒将从6月开始接收。

管理层表示，2027年的重大新品发布不应在实质上争夺资源，因为各个品牌拥有专属的营销团队，并由独立的国际销售团队提供支持。支出会在三个阶段进行重新评估：零售商与分销商推介会、初始订单，以及基于终端动销情况的后续补货。

公司目前预计2027年不会出现重大的投入成本增加或大范围的提价举措。管理层表示，仅在必要时才会考虑选择性提价，同时主要依靠包装以及其他降本增效举措。

在电话会议召开时，美国假日季需求和终端动销依然强劲。管理层未发现零售商或分销商存在过高库存，并表示部分持谨慎态度的分销商可能因库存过低而需要补货。

管理层将亚洲视为一大亮点，并提到了印度的新分销商、韩国附属机构业绩的改善以及中国市场的回暖。管理层还表示，电子商务约占公司销售额的30%，而旅游零售约占年初至今净销售额的7%。

Abercrombie & Fitch与Hollister合计约占销售额的2%至3%。它们计划退出品牌组合，届时预计将对增长造成拖累，但管理层计划通过大卫·贝克汉姆（David Beckham）、诺帝卡（Nautica）和彪马（Puma）等新授权品牌逐步抵消这一影响。

财报电话会议完整实录

---

完整财报电话会议逐字稿

管理层陈述

Operator

Greetings. Welcome to Interparfums Third Quarter 2026 Conference Call and Webcast. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the conference over to Devin Sullivan, Managing Director of the Equity Group. Thank you. You may begin.

Devin Sullivan

Thank you, John, and thank you all for joining us today.

Joining us on today's call will be Chairman and Chief Executive Officer, Jean Madar; and Chief Financial Officer, Michel Atwood. As a reminder, this conference call may contain forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from projected results. These factors may be found in the company's filings with the Securities and Exchange Commission under the headings Forward-Looking Statements and Risk Factors.

Forward-looking statements speak only as of the date on which they are made, and Interparfums undertakes no obligation to update the information discussed. Interparfums consolidated results include 2 business segments, European-based operations through Interparfums S.A., the company's 74% owned French subsidiary and United States-based operations.

It is now my pleasure to turn the call over to Jean Madar. Jean, please go ahead.

Jean Madar

Thank you, David, and good morning, everyone, and thank you for joining us on today's call.

Our first quarter and year-to-date results demonstrate the resilience of our global portfolio and the appeal of our brands and the strength of our team's execution. Growth in North America, in Asia Pacific and Central and South America helped offset challenging conditions elsewhere, while our operational and financial initiatives, blood innovation and targeted investments continued to drive meaningful progress.

Our strong balance sheet, disciplined cost and working capital management and flexible operating structure enable us to navigate the near-term pressures while continuing to invest in our brands and innovation pipeline and deliver value to our shareholders. We are positioned for a strong finish to 2026, and we remain confident as we prepare for major launches across our portfolio in 2027 and also 2028.

Now to an overview of our performance. Third quarter sales were stable at $430 million. resulting in 1% growth for the first 9 months of 2026. Growth from our European-based operations offset a decline from United States-based operations, following exceptionally strong growth in the second quarter for the U.S. operations. The decline largely reflected delayed gift set shipments with the associated sales expected to be recognized in the current fourth quarter. Both segments generated positive sales growth through the first 9 months of the year.

Consolidated sales growth for the first 9 months of 2026 reflected strong brand execution and solid performance in select regions, partially offset by macro and regional headwinds. North America rose 4%, driven by continued market growth and the launch of several extensions this year, particularly for Coach as well as successful marketing and advertising investment.

Asia Pacific sales increased by 12%, driven by brand initiatives with Coach and Jimmy Choo and expansion of Ferragamo and Guess. Also, our Korean affiliate is performing well after several years of sluggish sales, and we continue to capitalize on this large regional market. Central and South America regional sales rose 12% due to the success of women's and men's Coach franchises again and the strength of the Montblanc Legend line as well as robust growth from Jimmy Choo.

Conversely, sales in Eastern Europe decreased 15%, driven by operational difficulties in certain countries, which disproportionately impacted Lanvin and Lacoste. The war in the Middle East continued to weigh significantly on our overall results, resulting in a 19% decline in our sales in the Middle East and Africa region. Year-to-date growth was broad-based and several of our largest brands finished the third quarter with real strength.

First, Coach rose by 15% year-to-date, including outstanding growth of 23% in the third quarter. The brand continues to benefit from its immense popularity in the United States, the strength of the established women's and men's line and the success of the 2 new line extensions launched earlier this year.

Montblanc fragrance sales returned to growth, increasing 12% in the third quarter after flat second quarter sales and producing 8% growth for the first 9 months of 2026, driven by the successes of Montblanc Legend Elixir and Montblanc Explorer Infinite launched in the first and third quarter, respectively.

Jimmy Choo fragrance sales rose 5% year-to-date with the brand's sustained performance driven by the continued success of I Want Choo and Jimmy Choo Man franchises, supported by several line extensions launched over the past 12 months, including I Want Choo Midnight, which launched in the third quarter. While Lacoste fragrance sales declined 9% year-to-date, reflecting a strong prior year comparison and softer conditions in Eastern Europe, sales returned to growth in the third quarter, up 4%. The increase was driven by original intent, the newest women's launch in the original franchise, setting up for a robust 2027, fueled by major launches.

GUESS, the largest U.S.-based brand rose 7%, driven by the continuing success of the iconic franchise, which was enhanced by the launches of 2 new extension earlier this year as well as extensions launched for the Amore and Seductive franchises. While Donna Karan DKNY fragrance sales declined 9% during the third quarter following double-digit growth in the second quarter of 2026, driven by innovation phasing and gift set shipment delays, sales grew nonetheless 4% in the first 9 months.

Ferragamo fragrance sales declined 22% in the first quarter due to innovation phasing, but were only down 2% on a year-to-date basis. The brand was impacted by challenging market conditions in Europe, which is the core region for the brand.

Finally, Roberto Cavalli grew 6% year-to-date despite a very difficult macroeconomic environment in the Middle East, Middle East being the brand's largest market and exceptionally high prior year growth comparisons.

The brand's growth this year has been driven by the enduring popularity of last year's blockbuster Serpentine launch as well as brand extensions released earlier in 2026 and the partnership with Kiko Milano.

We have also made significant strides in developing and expanding our newest brands. Under our management, Annick Goutal is regaining momentum in the high-end niche fragrance market. This year, we have opened new points of sales and also we opened established boutiques and shop-in-shops in Paris and resumed international distribution earlier this year.

In the third quarter, we relaunched the brand in the U.S., securing placement in 8 Bloomingdale's stores and online. We have also relaunched the brand e-commerce website, further enhancing the brand's global reach. We are actively preparing for the launch of brand-new fragrances and bath products in 2027 for Annick Goutal.

We are also preparing for the first launches of new fragrance for Longchamp and Off-White in 2027. We believe that Longchamp has the potential to become our next $100 million brand and Off-White represents another step for us into the high-end category.

As announced in September, we entered into an exclusive worldwide fragrance license agreement with Puma, and we plan to introduce a new signature lifestyle fragrance for men and women in the second half of 2027, enhancing our positioning in the lifestyle fragrance market.

Together, these additions strengthen our portfolio as the fragrance industry evolves. The category remains healthy and consumers wear fragrance as part of a daily self-expression and accessible luxury, not just for special occasions.

Younger customers are entering prestige earlier, layering scents and building fragrance wardrobes. Much of that discovery happens online. TikTok spark interest and e-commerce turned it into purchase. We are working with retail partners to win in these channels while protecting our brand positioning. These shifts are especially relevant in travel retail, which represented roughly 7% of our year-to-date net sales. Passenger volumes have recovered overall, but spending per traveler has not returned to pre-pandemic levels, making conversion more important than traffic alone.

Consumers are responding to differentiated assortments, smaller formats, exclusive and experiences that give them a reason to purchase in an airport. We are still underrepresented in the travel retail market, but our expanding portfolio is increasingly suited to this environment because it spans established prestige fragrances, accessible offerings and higher-end brands, giving us flexibility to address different travelers and markets.

While the operating environment remains challenging, we are managing through these pressures with discipline and continuing to succeed by investing behind our brands, supporting our retail partners and adapting to changes in demand.

Our performance in a year with fewer major launches demonstrates the underlying strength and balance of the portfolio. More importantly, the work underway today across product development, distribution and marketing is laying the foundation for 2027 when several of our largest brands will introduce major new franchise blockbusters alongside launches from new brands.

So with that, I will now turn it over to Michel Atwood, our CFO, for a review of our financial results. Michel?

Michel Atwood

Thank you, Jean, and good morning, everyone. I will begin by discussing the consolidated results before breaking them down into our 2 operating units, European operations and United States-based operations.

Echoing Jean's comments, the benefits of our portfolio model were evident this quarter as growth from our European operations helped offset delayed shipments on gift sets in our U.S. operations. We maintained a strong financial position, operated with efficiency and continued to invest in our future.

Net sales were flat in the third quarter and were up 1% through the first 9 months of 2026. Organic growth continued to be negatively impacted by the lingering headwinds associated with the war in the Middle East and producing headwinds of about 1% in the third quarter and 2% for the first 9 months of the year.

Our core business remains strong. Our 7 largest brands, which represented 82% of our year-to-date sales grew 6%. Our expanding direct-to-retail channel, which represented 42% of year-to-date sales grew 8%. And lastly, our top 20 brand region combinations, which represent 82% of our sales, also grew 6%.

Looking at profitability, gross margins expanded by 360 and 160 basis points to 67.1% and 66% in the third quarter and the first 9 months of 2026, respectively. These increases were primarily driven by favorable segment, brand and channel mix as well as lower destruction costs, which reflect our continued focus on inventory and supply chain management. These gains were also partially offset by tariffs, which represented a net additional expense of $11.9 million for the first 9 months of the year.

Now, we also recognized $16.4 million of tariff refunds in our consolidated statement of income for the 9 months ended September 26. This included $14.8 million that was recognized as a nonrecurring reduction in cost of sales, $1 million in SG&A and $600,000 in interest. There is still $1.4 million of unrealized tariff refunds that will mostly make their way into cost of sales in the current fourth quarter. We are not expecting any material additional refunds, and we expect that these costs will not be -- these savings will not be annualized in 2027.

For the full year, we expect gross margins to improve by about 150 basis points with 110 of these improvements coming from the tariff refunds and the balance coming from favorable brand channel mix as well as cost efficiency programs, helping to offset the overall higher tariffs.

Moving to SG&A. Higher SG&A expenses for 2026 resulted from unfavorable royalty brand mix impacts, higher brand marketing investments, employee-related costs and logistics costs due to supply chain transition and higher cost of transportation. Our A&P spending for the first 9 months increased 4% to $194 million or 17.4% of sales compared to 16.9% in the prior year period, reflecting our ongoing commitment to investing in our existing brands and upcoming launches.

We are reinvesting tariff refunds to protect our top line growth and position the company for a successful 2027. As such, we continue to expect that on a full year basis, A&P expenditures will approach our long-term target of approximately 21% of net sales. As a result of the factors previously discussed, operating margins were 27.4% and 21.6% for the 3- and 9-month period ending September 30, respectively, as compared to 25.3% and 22% for the corresponding periods in 2025.

Below the operating line, other income and expense netted to breakeven as compared to a loss of $7.7 million in the prior year period. The improvement was driven by lower total interest expense, higher interest and investment income and reflecting a stronger ROI on our excess cash. And we also had lower losses on marketable securities than in 2025, as well as a marginal gain on foreign exchange compared to a $4.6 million loss in 2025.

Our consolidated effective tax rate for 9 months ended September 30 was 24.6% compared to 23.5% in the prior year period, which was helped by a $2 million onetime gain in the prior period. In the first 9 months, net income rose to $142 million or $4.43 per diluted share compared to $140 million or $4.36 per diluted share in the prior year period.

Now moving on to our 2 business segments. I'll start with European-based operations. Net sales in the third quarter increased 4%, reflecting organic growth of 3% and a 1% contribution from new brands, partially offset by a 1% foreign exchange headwind. This produced a 1% increase for the first 9 months compared to last year, driven by 2% favorable foreign exchange.

Gross margin for both the third and fourth quarter -- third quarter and first 9 months expanded significantly. Gross margin rose by 480 basis points to 70.8% in the third quarter and 210 basis points to 68.7% for the first 9 months. The increase for the first 9 months was the result of the price increases, favorable brand and channel mix, lower year-over-year destruction costs of $6 million as well as close to $10 million of IEEPA tariff refunds. These were partially offset by tariffs, which represented an initial expense of $7 million.

SG&A grew by 5% and 7% in the third quarter and the first 9 months to $116 million and $345 million, representing 37.8% and 43.7% of sales, respectively. These increases reflected royalty costs outpacing sales to unfavorable brand mix, higher employee costs to build out our Korean subsidiary and increased logistic costs from supply chain transitions and rising fuel prices. 9-month marketing expenses also outpaced sales due to product launch timing.

Overall, net income attributable to European-based operations rose to $75 million for the quarter, representing 24.6% of net sales compared to 21.6% during the prior year period. For the first 9 months, net income attributable to European-based operations rose to $148 million, representing 18.7% of sales compared to 18.5% in the prior year period.

Now turning to United States-based operations. For the United States-based operations, following an exceptionally strong second quarter, 2026 third quarter sales declined 7% on a reported and organic basis, largely driven by supply chain disruptions that resulted in the delayed shipment of gift sets for select brands. These delays represented approximately $10 million in sales, which will now be recognized in the fourth quarter. Excluding this impact, sales would have been flat.

Despite the decline, year-to-date sales grew 3%, driven by 2% organic growth and a favorable foreign exchange impact of 1%. Excluding the impact of the delayed giftset shipments, sales would have increased by 6% on a year-to-date basis.

Gross margin expanded by 10 basis points from 58.2% to 58.1% in the third quarter and 50 basis points from 59.5% to 59% for the first 9 months. Tariff refunds represented $5 million as well as lower-than-expected disruptions helped offset unfavorable channel and product mix as well as higher ongoing tariff costs.

SG&A was flat at $55 million in the third quarter, representing 42.9% of sales compared to 39.7% last year. This was driven by lower fixed cost absorption due to lower sales. For the first 9 months, SG&A rose 4% to $151 million or 44.8% compared to 44.4% last year. The increase was driven by unfavorable brand mix and royalties and higher logistics costs due to supply chain transitions and rising fuel costs.

Overall, net income attributable to U.S.-based operations was $15 million for the quarter, representing 12.2% of net sales compared to 15% during the prior year period, and net income was stable at $39 million for the first 9 months, representing 11.7% of net sales as compared to 11.9% last year.

Now moving to cash. At September 30, our balance sheet remains strong with $240 million in cash, cash equivalents and short-term investments and working capital in excess of $700 million.

From a cash flow perspective, accounts receivables were up 20% from year-end. These balances are reasonable based on 2026 sales levels and seasonality of the business. Daily sales outstanding were up slightly to 90 days for the first 9 months ended in September compared to 89 days in the prior year period.

We continue to see strong collection activity and do not anticipate any issues with collections of accounts receivable. Our total inventories declined by 3% to $376 million compared to prior year period, translating into a reduction of 16 days of inventory on hand as we continue to drive inventory efficiencies and work to increase conversion of raw materials into finished goods.

By effectively managing working capital relative to our sales growth, we have continued to improve our operating cash flow. Cash flow generated from operating activities reached $102 million for the first 9 months or 56% of net income, up from $68 million or 38% of net income in the prior year period. Operating cash flow also benefited from the receipt of $17.9 million of APA tariff refunds, including interest. We continue to expect strong free cash flow productivity for the balance of 2026.

Next, I would like to update you on the status of our share repurchase program that was approved in July 2026. The Board gave us authorization to purchase shares of IP, Inc. or our publicly traded affiliate IPSA.

During the third quarter of 2026, we invested approximately $50 million to acquire shares of IPSA, our Paris-based subsidiary listed on the Euronext Paris and increased our ownership from 72.5% to 74.3%. We will continue to advance the program prudently and continue to keep our options open to either buy shares of IP Inc. or IPSA while maintaining our focus on business priorities, strategic investment and long-term value.

Now turning to our 2026 guidance and outlook. As outlined in our earnings release issued last evening, despite the weakening euro, we are moderately increasing our sales outlook in 2026 from $1.48 billion to approximately $1.49 billion and maintaining diluted EPS of $4.85. Our EPS outlook includes the full benefit of the $17.9 million in tariff refunds, which was -- which has supported additional A&P investment and offset higher-than-expected tariffs and logistic costs. We continue to expect improved growth in 2027 and 2028, driven by blockbuster launches planned in those years and the development and distribution of our newest brands.

Additionally, as disclosed in yesterday's release, we will be issuing our formal full year 2027 guidance on Wednesday, November 18, a couple of weeks, and we remain mindful of external pressures such as geopolitical risks, the weakening euro, which has moved in the opposite direction and moderating consumer demand and potentially inflationary effects from tariffs and supplier pricing.

With the flexibility and operational discipline to respond to changing conditions and the strength of our innovation pipeline and global relationships, we are confident in our ability to navigate these headwinds.

With that, operator, please open the line for questions.

Operator

[Operator Instructions] And the first question comes from the line of Sydney Wagner with Jefferies.

分析师问答

Sydney Wagner

Can you just share any more color on the supply chain disruption behind the gift set delay? And then just wondering if there's any risk of similar timing issues as we start to ramp into the large pipeline next year?

And then also on next year, given the heavy launch calendar, how do you think about making sure each brand gets the focus and marketing support it needs, so nothing gets short changed? And then how quickly are you able to recalibrate or shift marketing dollars or other investment spend toward whichever launches are performing best?

Jean Madar

Okay. Thank you, Sydney. So you have 3 questions. So we're going to share between Michel and myself. Regarding the disruption on the gift set for this quarter, we assembled our gift sets in Turkey and the transit time has increased tremendously.

In general, the transit time to move containers has increased a lot. Sometimes it has doubled to move goods from the U.S. to Italy or from Europe to the U.S. takes much more. So we are -- we had a lot of gift sets to assemble and our supplier was behind by, I would say, a good 30 to 45 days.

We do not expect -- we -- I just came back from Turkey yesterday to make sure that this cannot happen again. And we have decided to advance by 60 days or even 90 days our receipts of gift sets for 2027. So we'll start receiving gift sets for Mother's Day in January, actually, December, January. And we'll start receiving gift sets for Christmas '27 in June. So in order to -- so we are anticipating to solve this problem.

Regarding the launches next year, Michel, you want to answer to that?

Michel Atwood

Yes, of course. I mean, look, Sydney, every brand has a strength in a different market. Not every brand is strong. Like if you take the example of Coach, Coach is very successful in the U.S. If you take the example of Lacoste, Lacoste is more successful in Europe.

And so essentially, as we launch these initiatives, the idea is to really make sure that they're successful everywhere where they're relevant. So it doesn't necessarily mean that they're necessarily competing with one another in some of the respective markets.

But yes, definitely, this is part of as we build our budget for next year and we work towards our guidance for 2027. These are the kind of things we're looking at to make sure that we can manage the top line and the bottom line effectively and efficiently. In terms of shifting...

Jean Madar

I will add also, Michel, that from a marketing point of view and even also from a sales point of view, we have some dedicated teams. We have -- internationally, we have 3 sales force. They are not all selling the same products, same brands. And from a marketing point of view, we have dedicated teams per brand. So we are not expecting any cannibalization or any conflict even if we have a lot of launches next year.

Now you mentioned we will be able to recalibrate our expenses if some launches are more or less successful. Definitely, this is a trademark of Interparfums. We absolutely review our spending on a quarterly basis, sometimes on a monthly basis. Michel, you can elaborate on that, please?

Michel Atwood

Yes. Typically, what we do is there's 3 moments of truth. The first one is when we present the innovation to our distributor and our retail partners, we get a good sense of the level of engagement, and we adjust our investments and prioritize our markets accordingly.

The second phase is when we get the first orders, and that also gives us a good idea. And then the third moment is when we start getting repurchases because the products are selling off. And usually, those are really the 3 moments when we make decisions in terms of investments and we adjust accordingly.

Operator

And the next question comes from the line of Aron Adamski with Goldman Sachs.

Aron Adamski

I have 2 questions. Firstly, on the cost environment, could you please share what sort of input cost pressures do you expect to see during 2027? And I guess, what level of pricing actions are you anticipating to take to mitigate these pressures?

And my second question is on the broader demand environment. I guess, as energy prices remain elevated, I wanted to check if you have seen any changes in consumer behavior across your biggest markets so far in the fourth quarter.

Jean Madar

I can try cost environment. Michel, do you want to answer the -- try to answer the first part?

Michel Atwood

Yes. So look, clearly, oil prices have had a significant impact on things that require oil for input. So transportation costs have definitely gone up and also with the war in the Middle East, transportation routes have been extended, which also is triggering additional cost. We're also seeing higher costs on areas where energy is required like related to glass manufacturing, for example, or for plastics.

What we are actively looking to do at this point in time is to work through cost efficiencies. We have a long list of cost savings programs that we're trying to -- that we're working on to try to help mitigate some of these inflationary costs. And if needed, we will take pricing. But at this point in time, as you know, we don't really like to take pricing, and we only take it on specific brands and where it really makes sense and where we need to. Jean, I'll let you add anything.

Jean Madar

Yes. We reviewed our cost of goods with our packaging team on a regular basis. We have found possibilities to counterbalance some price increase from certain suppliers. So we are not expecting in 2027 some major cost increase. We are not also -- like Michel said, we don't like pricing. We are not also looking to increase the prices in 2027. So that's for the first part of the question. Michel, you want to start on the second part?

Michel Atwood

Yes. The other one is really the demand. Look, demand continues to be, I think, consistent with what we've seen since the beginning of the year, which is the U.S. continues to perform very well. A couple of key markets in Europe are doing well, Southern Europe, in particular, where we're still seeing some challenges are in Germany and in France. Those markets are actually down year-over-year.

I would say it's quite balanced. And Asia is actually performing very well. It's not only for us. But generally speaking, Asia has been one of the bright spots. We have addressed some of the challenges we had on distribution. We have a new distributor in India. We have also qualified -- we also established our own affiliate in Korea, and the business is actually doing quite well in China is picking up. So overall, I think we're feeling very, very good about Asia and Latin America as well.

Obviously, our 2 challenging markets are Eastern Europe and Middle East for the reasons we have been explaining for, I think, quite a bit of time, and we're not really seeing any improvements in those areas. Jean?

Jean Madar

Yes. In general, I would like to say that the environment is quite good for fragrances. Fragrance is really the faster-growing segment of beauty comparing to skin care and makeup. So of course, Interparfums being a pure player in fragrance, we should see this growth coming in more in '27 and '28.

Also, what we noticed is that even though some -- we mentioned in our remarks that at Travel Retail, people are looking at a smaller size or lower pricing. But I think that the space that is allocated to fragrance either by department store, travel retail operator or even e-commerce is getting bigger. So this is an opportunity for us. We have the attention of everybody -- so it is our goal to take advantage of this attention and interest in fragrance.

There is also in terms of economic uncertainty, people used to say that there is a lipstick effect, meaning that in a tough economic environment, people won't go and buy a lipstick to feel good. There is, I will say today, a new effect. It's a fragrance effect. People -- in difficult economic environment, people will go and buy fragrance to change their mood and to feel better.

So we see that. We see that also from all the e-commerce business that we have. And let's not forget that e-commerce today represents something like 30% of our sales. And as you know, e-commerce, people buy the fragrance without being able to smell it. So we are following these trends very carefully. And I think that on a worldwide basis, fragrance will continue to grow.

Operator

And the next question comes from the line of Jonna Kim with TD.

Jungwon Kim

Just the first one on how should we just think about the growth in the European and the U.S. businesses in the fourth quarter, given also the strength that we saw on the Europe side in the third quarter? And then second question, just any early holiday weeks that you have? And what are some of the key product and marketing changes that you're making this year versus last year?

Michel Atwood

All right. I'll take the first one, maybe, Jean. Look, European ops, I think if you go through our guidance, our guidance basically implies a 3% decline for the fourth quarter. There is obviously about 2 points of FX headwinds. As you know, I think we've all seen the euro has moved from being very, very strong to moving more weekly. So there's about 2 points of FX in that number.

If you look at the 2 segments, we would expect the U.S. ops segment to be stronger, if anything, because of the $10 million of gift sets that we've shifted from the third to the fourth quarter. So that's kind of hopefully gives you that perspective, and you can back the rest out. And then early read on holiday season, I'll let Jean maybe comment on that.

Jean Madar

Yes. Early read on holiday season, the U.S. looks strong. It has been strong since the beginning of the year. Sell-through is good. We continue to sell in daily. We deliver daily. We are, of course, waiting for the last 5 weeks of the year where this is -- where we -- at store level, we do a majority of the sale. But from what I see, from what I hear, we do not see any particular issue.

Operator

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

Susan Anderson

I guess, maybe just to add on or a follow-up to the holiday question. I'm just curious how inventory is in the channels and if there's still a discrepancy in sell-ins and sellouts. And then just how retailers are kind of ordering for holiday? Are you seeing them be more conservative at all? Or is it pretty similar to last year?

Jean Madar

I don't see a lot of inventory at store level. As you know, everybody now is using AI and sales analysis to carry the right amount of inventory for the right -- for every specific week. I don't see at all too much inventory. We continue definitely to ship. November is going to be a very big month. And I think we continue to ship also December. So we are not worried with high inventory at the retailer level or high inventory at distributor level. Certain distributors are quite prudent so they're going to need to reorder now because their inventory is getting too low. And I think also because of the launches that we have next year, people will start the year with a very reasonable inventory in order to start buying into the new lines. So all this is for me quite positive.

Susan Anderson

Okay. Great. And then maybe just one follow-up on the A&P spend. I think you said 21% for the year this year. I guess should we think about that as the new benchmark? Or is it just elevated this year because you had the tariff refunds and then also you were investing ahead of the big launches next year. I guess, maybe just if you could give a little bit of color there.

Michel Atwood

Yes. Susan, I would expect that '21 to be the -- that's the norm. That's what we've been working towards. And I expect that, that will be the case also for next year. It could actually even be a little bit higher. We're still working through the 2027. I think the priority really for us is continuing to grow the top line and protect the business.

I think we're seeing that very clearly on our core brands. I mean we -- if we didn't have some of these smaller brands or some of these regions dragging us down, we'd be posting much better and much stronger numbers. So I think we're feeling pretty good about the ROI of these A&P investments, and we expect that they will continue to be high going forward. Will they increase significantly? Probably not. But when we feel that there's room, we will continue to invest. The priority really remains growing the top line.

Operator

And the next question comes from the line of Hamed Khorsand with BWS Financial.

Hamed Khorsand

So first question was just if you could -- a little follow-up here. You were saying that you're not seeing much stocking activity from retailers or distributors. Do you think consumers are prebuying for the holidays or consumers just out there, they like what you're selling and they're naturally just buying it?

Jean Madar

It's difficult to answer. We cannot analyze at this level. Honestly, Hamed, I would prefer -- I mean, we are in contact with retailers where we contact with Amazon and TikTok that are great indicators for us. TikTok Shop is quite optimistic. They are looking at a very strong November sales, Amazon also. Are people buying in advance? I think they are doing the same as last year. I don't see too much -- too many changes in their habit. Michel, you have maybe.

Michel Atwood

Yes. I mean, I agree, Jean. I would say maybe that the one consumer behavior we're seeing more of is in the past, a lot of people were buying fragrances as a gift for somebody else. I think we're seeing a lot more people buying fragrances from themselves. And I think that has been a trend that is -- it's a gradual trend, but I think we're seeing more of that. And I think we're seeing as a result, we're seeing more buying opportunities and people are not just buying during holiday season necessarily.

But other than that, I don't think we're seeing an earlier holiday season, if that's your question, Hamed. Like holiday seems to be happening pretty much on the same time line as we usually see it, which is the run-up to Thanksgiving and really the last 5, 6 weeks of the year. Any other questions?

Operator

Yes. Our final question comes from the line of Fraser Donlon with Berenberg.

Fraser Donlon

Just 2 questions on my side. So Coach has been super strong this year. Obviously, fashion is working well and fragrance on your side. Like how do you see the road map from here and almost the potential for that brand given the sell-in seems super strong on, let's say, not major launches this year? And then the second question was just about Abercrombie & Fitch and Hollister, which I think you said dropping out of the portfolio in 2028. Could you just remind like how we should think about the revenue impact from that?

Jean Madar

Yes. Coach definitely is a shining star. We are lucky because fashion is doing extraordinary well. The name recognition is getting even bigger outside of the U.S. So I think that even if Coach is having some great numbers, the potential for growing Coach is very big.

As we said before, Coach, Jimmy Choo, Montblanc, Guess, our largest brand will be growing faster than the rest of the portfolio, which is good news. And Coach with the existing franchise, the new flankers and the new blockbuster will definitely -- could definitely grow double-digit. So that's for Coach. A&F Hollister, Michel, you want to answer on that?

Michel Atwood

Yes, absolutely. Look, A&F and Hollister, I think we've had some pretty good visibility in terms of where this is going to land, and we have had a lot of time to plan for it. And part of our strategy to bring in new licenses like David Beckham, like Nautica and like PUMA are to effectively refresh the portfolio, bring in brands that we believe are larger, have more potential for growth. And so yes, we've -- that's part of the portfolio swing that we're expecting to materialize over the next couple of years on the portfolio.

This represents -- I mean, look, A&F and Abercrombie together represent less than 4% of our -- it's like 2% to 3% of our sales. So it's not going to be material, but it will weigh down on our growth the year that this comes out.

Jean Madar

Yes, we still have 2027 and 2028. So -- by that time, maybe other brands will be signed and the newer brands like Longchamp, like, Off-White, like Puma will have been in the market for more than 2 years. So we are not too worried. And when I look at the portfolio, I think that it's very important to edit this portfolio of brands.

Of course, we want to keep and the bigger one, and that's why we will -- we will extend the license whenever we can. We did it recently with GUESS, but we will definitely do it with all the others. But it's important to sometimes let go the one that we think has less potential. We don't need to carry a 24 license. We can do -- we are doing right now, what Michel said, 80% of the business with a 7 or 8 license.

Michel Atwood

Exactly. Exactly. More than 80% with the top 7.

Operator

This now concludes our question-and-answer session. I would like to turn the floor back over to Michel Atwood for any closing comments.

Michel Atwood

All right. Well, thank you, Jean. Thanks, everyone, for joining our call today. With this being said, this is our final conference call over the year. So Jean and I would like to extend our warmest wishes for a safe and joyful holiday season and a healthy and fulfilling year for our employees and everybody who's been able -- our stakeholders and everybody who's on the line today.

If any have additional questions, please contact David Sullivan or Conor Rodriguez from the Equity Group. These are our Investor Relations representatives. Thank you, and have a great day.

Jean Madar

Thank you. Thank you, everyone.

Operator

And thank you, ladies and gentlemen. That does conclude today's teleconference. You may disconnect your lines at this time.