Inter Parfums (IPAR)

Fragrance and perfume company Inter Parfums (NASDAQ:IPAR) met Wall Streets revenue expectations in Q3 CY2025, with sales up 1.2% year on year to $429.6 million. On the other hand, the company’s full-year revenue guidance of $1.47 billion at the midpoint came in 1.7% below analysts’ estimates. Its GAAP profit of $2.05 per share was 6.2% above analysts’ consensus estimates.

Company Overview

With licenses to produce colognes and perfumes under brands such as Kate Spade, Van Cleef & Arpels, and Abercrombie & Fitch, Inter Parfums (NASDAQ:IPAR) manufactures and distributes fragrances worldwide.

While personal care products products may seem more discretionary than food, consumers tend to maintain or even boost their spending on the category during tough times. This phenomenon is known as "the lipstick effect" by economists, which states that consumers still want some semblance of affordable luxuries like beauty and wellness when the economy is sputtering. Consumer tastes are constantly changing, and personal care companies are currently responding to the public’s increased desire for ethically produced goods by featuring natural ingredients in their products.

Competitors in the luxury fragrance market include Estée Lauder (NYSE:EL) and L'Oréal (ENXTPA:OR).

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $1.46 billion in revenue over the past 12 months, Inter Parfums is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into.

As you can see below, Inter Parfums grew its sales at a solid 14.1% compounded annual growth rate over the last three years. This is a good starting point for our analysis because it shows Inter Parfums’s demand was higher than many consumer staples companies.

This quarter, Inter Parfums grew its revenue by 1.2% year on year, and its $429.6 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 6.8% over the next 12 months, a deceleration versus the last three years. Still, this projection is above the sector average and implies the market is baking in some success for its newer products.

At StockStory, we prefer high gross margin businesses because they indicate pricing power or differentiated products, giving the company a chance to generate higher operating profits.

Inter Parfums has best-in-class unit economics for a consumer staples company, enabling it to invest in areas such as marketing and talent. As you can see below, it averaged an elite 57.2% gross margin over the last two years. That means Inter Parfums only paid its suppliers $42.79 for every $100 in revenue.

Inter Parfums produced a 63.5% gross profit margin in Q3, up 7.7 percentage points year on year. Inter Parfums’s full-year margin has also been trending up over the past 12 months, increasing by 2.8 percentage points. If this move continues, it could suggest better unit economics due to more leverage from its growing sales on the fixed portion of its cost of goods sold (such as manufacturing expenses).

Inter Parfums’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 18.6% over the last two years. This profitability was top-notch for a consumer staples business, showing it’s an well-run company with an efficient cost structure. This is seen in its fast historical revenue growth and healthy gross margin, which is why we look at all three data points together.

Analyzing the trend in its profitability, Inter Parfums’s operating margin might fluctuated slightly but has generally stayed the same over the last year. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q3, Inter Parfums generated an operating margin profit margin of 25.3%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Revenue trends explain a company’s historical growth, but the change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

In Q3, Inter Parfums reported EPS of $2.05, up from $1.93 in the same quarter last year. This print beat analysts’ estimates by 6.2%. Over the next 12 months, Wall Street expects Inter Parfums’s full-year EPS of $5.11 to grow 8.5%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Inter Parfums has shown robust cash profitability, driven by its attractive business model that enables it to reinvest or return capital to investors. The company’s free cash flow margin averaged 10.2% over the last two years, quite impressive for a consumer staples business.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Inter Parfums’s five-year average ROIC was 28.2%, placing it among the best consumer staples companies. This illustrates its management team’s ability to invest in highly profitable ventures and produce tangible results for shareholders.

Inter Parfums reported $187.9 million of cash and $220.5 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $307.8 million of EBITDA over the last 12 months, we view Inter Parfums’s 0.1× net-debt-to-EBITDA ratio as safe. We also see its $4.08 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see Inter Parfums beat analysts’ EPS expectations this quarter. On the other hand, its full-year revenue guidance missed and its full-year EPS guidance fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock remained flat at $91.25 immediately following the results.

Updated: December 3, 2025 at 9:50 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Inter Parfums.

There are some positives when it comes to Inter Parfums’s fundamentals. To kick things off, its revenue growth was good over the last three years. And while its projected EPS for the next year is lacking, its stellar ROIC suggests it has been a well-run company historically. On top of that, its admirable gross margins are a wonderful starting point for the overall profitability of the business.

Inter Parfums’s P/E ratio based on the next 12 months is 17.1x. Looking at the consumer staples space right now, Inter Parfums trades at a compelling valuation. For those confident in the business and its management team, this is a good time to invest.

Wall Street analysts have a consensus one-year price target of $103.60 on the company (compared to the current share price of $82.07), implying they see 26.2% upside in buying Inter Parfums in the short term.