Significant Accounting Policies:

6 Months Ended

Jun. 30, 2026

1.	Significant Accounting Policies:

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ended December 31, 2026.

The condensed consolidated balance sheet at December 31, 2025, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in our annual report on Form 10-K for the year ended December 31, 2025.

Accounts Receivable

Accounts receivables were $301.8 million, $320.6 million, $274.7 million as of June 30, 2026, December 31, 2025, and December 31, 2024, respectively.

Inventories

Inventories, including promotional merchandise, only include inventory considered saleable or usable in future periods, and are stated at the lower of cost and net realizable value, with cost being determined using an average cost method which approximates first-in, first-out (“FIFO”). Cost components include raw materials, direct labor and overhead (e.g., indirect labor, utilities, depreciation, purchasing, receiving, inspection and warehousing) as well as inbound freight. Promotional merchandise is charged to cost of sales at the time the merchandise is shipped to the Company’s customers.

Income Taxes

Our consolidated effective tax rate was 24.2% and 24.3% for the six months ended June 30, 2026 and 2025, respectively. The Company's effective income tax rate is primarily affected by the geographic mix of earnings among jurisdictions with different statutory tax rates, the benefit associated with the Foreign-Derived Intangible Income ("FDII") deduction, excess tax benefits related to stock-based compensation, state income taxes, and other permanent differences recognized during the period. These items collectively result in the Company's effective tax rate differing from the U.S. federal statutory rate. The company does not have a jurisdictional tax forecast but uses a forecasted tax rate by segment to validate the quarterly effective tax rate. Other than as discussed above, we did not experience any significant changes in tax rates, and none were expected in jurisdictions where we operate. We also did not have any material discreet tax items this quarter nor significant changes in uncertain tax positions, valuation allowances, tax examinations, or enacted law changes. The Company was notified in June 2026 by the Internal Revenue Service that the Company will undergo an audit for the 2024 tax year.

Correction of Immaterial Misstatements in Financial Statements

Subsequent to the issuance of the December 31, 2025 consolidated financial statements, management identified a misclassification in the presentation of equity within the Consolidated Balance Sheets and Consolidated Statement of Changes in Shareholders’ Equity. Specifically, since inception, the equity component of Interparfums SA share-based compensation was improperly recorded in retained earnings rather than being presented in noncontrolling interest.

The Company evaluated the misclassification under ASC 250, Accounting Changes and Error Corrections, considering both quantitative and qualitative factors, including SEC Staff Accounting Bulletin No. 99. Management concluded the misclassification was not material to the previously issued financial statements and recorded the $12.9 million reclassification correction in the current period. This adjustment is reflected in the Consolidated Balance Sheets and Statement of Changes in Shareholders’ Equity. Refer to the “Reclassification adjustment” line item in the Statement of Changes in Shareholders’ Equity.

The revision affected only equity presentation in the Consolidated Balance Sheets and Statement of Changes in Shareholders’ Equity and had no impact on net income, operating income, cash flows, total assets, total liabilities, or total equity for any periods presented.

Reclassifications

Certain prior year amounts in the accompanying consolidated statement of cash flows and notes to consolidated financial statements have been reclassified to conform with current period presentation.