Interparfums (IPAR) 2026年第三季法說會：營收持平，調升展望

重點摘要

• 2026 年第三季淨銷售額持平於 4.3 億美元。前九個月銷售額成長 1%，主因歐洲業務的成長抵消了美國業務的下滑。
• 前九個月淨利從去年同期的 1.4 億美元（或稀釋後每股盈餘 4.36 美元）增至 1.42 億美元（或稀釋後每股盈餘 4.43 美元）。
• 第三季毛利率上升 360 個基點至 67.1%，受惠於有利的部門、品牌與通路組合、存貨銷毀成本降低以及關稅退稅。
• 該公司將 2026 年淨銷售額預期從 14.8 億美元上調至約 14.9 億美元，同時維持稀釋後每股盈餘 4.85 美元的財測指引。
• Coach 第三季銷售額成長 23%，今年以來成長 15%。萬寶龍（Montblanc）該季成長 12%，前九個月成長 8%，而 GUESS 今年以來成長 7%。
• 管理層預期在主要授權系列推出以及 Longchamp、Off-White 和 Puma 新產品的支撐下，2027 與 2028 年成長將有所改善。然而，這些預期仍面臨地緣政治、匯率、消費者需求及成本壓力的考驗。

核心財務數據

前七大品牌佔今年以來銷售額的 82%，成長 6%。直營零售銷售額佔總銷售額的 42%，成長 8%。

Interparfums 在前九個月的損益表中認列了 1,640 萬美元的關稅退稅，其中包括 1,480 萬美元的銷貨成本、100 萬美元的推銷及管理費用（SG&A），以及 60 萬美元的利息。管理層預期第四季將認列另外 140 萬美元先前尚未實現的退稅，主要計入銷貨成本。

業務與營運表現

歐洲業務第三季銷售額成長 4%，其中包括 3% 的有機成長和新品牌貢獻的 1%，但部分被 1% 的外匯逆風所抵消。前九個月銷售額成長 1%。第三季毛利率達到 70.8%，增加 480 個基點。

美國業務第三季銷售額下滑 7%。約 1,000 萬美元的禮盒組出貨因供應鏈中斷而延遲，預計將於第四季認列。管理層表示，若排除該時間差影響，季度銷售額本應持平。前九個月美國銷售額成長 3%，若排除延遲出貨的影響則為成長 6%。

北美銷售額在前九個月成長 4%。亞太地區以及中南美洲各成長 12%。相較之下，東歐下滑 15%，而中東及非洲地區則在營運困難和持續的區域衝突下衰退 19%。

Coach 仍是表現最強勁的主力品牌，今年以來銷售額成長 15%。管理層表示，現有授權系列、延伸產品線以及計劃推出的重磅新品，可望支撐兩位數的成長。前九個月 Jimmy Choo 成長 5%，GUESS 成長 7%，Roberto Cavalli 成長 6%。

Lacoste 今年以來下滑 9%，但在第三季重返 4% 的成長。Donna Karan/DKNY 因新品推出時機與禮盒組延遲，該季下滑 9%，但今年以來仍維持 4% 的成長。Ferragamo 在第一季大跌 22% 後，前九個月累計下滑 2%。

Interparfums 正在重建 Annick Goutal 的經銷網絡，並透過 8 家布魯明黛（Bloomingdale's）百貨門市及線上通路在美國重新推出該品牌。管理層亦正籌備於 2027 年推出 Longchamp 與 Off-White 的首發香水系列。此外，計劃於 2027 年下半年推出 Puma 男女時尚休閒香水。

管理層業績指引

Interparfums 將 2026 全年銷售額預期從 14.8 億美元上調至約 14.9 億美元，並維持稀釋後每股盈餘 4.85 美元的指引。每股盈餘預期包含 1,790 萬美元關稅退稅的收益，該公司將該收益部分用於資助額外的廣告與促銷活動，並抵消更高的關稅與物流成本。

管理層預期全年毛利率將提升約 150 個基點。其中約 110 個基點預計來自關稅退稅，其餘則由品牌與通路組合以及成本效益計畫所帶動。這項退稅效益預計不會延續至 2027 年。

全年廣告與促銷支出預計將接近淨銷售額的 21%。管理層表示該水準為常規基準，並指出視新品發表的推廣需求而定，2027 年的支出可能會略高一些。

財務長表示，2026 年的全年展望意味著第四季銷售額將下滑約 3%，其中包含約兩個百分點的外匯壓力。美國業務預計將受惠於認列延遲出貨的禮盒組。

風險與關注焦點

• 中東衝突使第三季有機成長率減少約一個百分點，前九個月成長率減少約兩個百分點。
• 東歐與中東地區依舊疲弱，管理層表示這兩個地區均未出現明顯改善。
• 歐元走軟在第四季帶來了外匯逆風。
• 石油與能源成本上升推高了運輸、玻璃製造及塑膠材料費用。航運路線拉長也進一步加劇了物流壓力。
• 前九個月關稅帶來了 1,190 萬美元的額外淨支出，儘管退稅抵消了部分財報上的衝擊。
• 管理層指出，消費者需求放緩、地緣政治風險、關稅以及供應商定價是 2027 年的不確定性因素。

分析師問答重點

禮盒組延遲與土耳其的組裝業務以及貨櫃運輸時間大幅拉長有關。供應商進度落後約 30 至 45 天。為降低再次發生的風險，Interparfums 計劃將 2027 年禮盒組的收貨時間提前 60 至 90 天，其中聖誕禮盒將從 6 月開始進貨。

管理層表示，2027 年的重大新品發表不至於造成嚴重的資源排擠，因為各品牌擁有專屬的行銷團隊，並由各自獨立的國際銷售團隊支援。支出會在三個階段進行重新評估：向零售商與經銷商展示說明、首批訂單，以及根據銷售狀況進行的後續追加訂單。

該公司目前預期 2027 年不會出現重大的投入成本增加或全面的價格調整。管理層表示，僅在必要時才會考慮選擇性調漲價格，同時主要仰賴包裝與其他成本效益措施。

電話會議進行時，美國節慶需求與終端銷售表現依然強勁。管理層並未發現零售商或經銷商有庫存過剩的情形，並指出一些態度審慎的經銷商可能因庫存過低而需要追加訂單。

管理層將亞洲描述為一大亮點，提及印度的全新經銷商、韓國關係企業表現改善，以及中國市場的回溫。管理層亦表示電子商務約佔公司銷售額的 30%，而免稅旅遊零售則約佔今年以來淨銷售額的 7%。

Abercrombie & Fitch 與 Hollister 合計約佔銷售額的 2% 至 3%。其計劃退出品牌組合預計在發生時將對成長造成壓力，但管理層打算隨著時間推移，透過包括 David Beckham、Nautica 和 Puma 在內的新授權品牌來抵消其影響。

電話財報會議完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

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.

分析師問答

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.