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Date

Tuesday, Nov. 25, 2025 at 9:00 a.m. ET

Call participants

  • Chairman and Chief Executive Officer — Efraim Grinberg
  • Executive Vice President and Chief Financial Officer — Sally DeMarcellus

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Takeaways

  • Total Revenue -- $186.1 million, representing a 3.1% increase.
  • Gross Margin -- 54.3%, up 80 basis points, despite a $4.5 million and 30 basis point headwind from new U.S. tariffs.
  • Adjusted Operating Income -- $12.6 million, increasing over 40%.
  • Net Income -- $10.2 million, or $0.45 per diluted share, compared to $8.5 million, or $0.37, in the previous year’s period.
  • US Net Sales Growth -- 6.9%, driven by fashion brands and direct-to-consumer; Movado company stores grew 11.9% and movado.com increased 12.4%.
  • International Net Sales -- Increased 0.6%; declined 2.5% on a constant currency basis, with Europe and Latin America strong but Middle East weaker.
  • Movado Company Store Comps -- Comparable sales up 9.4%; Movado brand up 17.7% within company stores.
  • Licensed Brands Growth -- 6.4% growth overall; 2.9% on a constant currency basis.
  • Cash and Debt Position -- $183.9 million in cash, no debt.
  • Inventory -- Inventory increased 11.8% year-over-year; $5.4 million of the increase was from foreign currency, and $6.4 million from reciprocal tariffs.
  • Tariff Update -- Pending new U.S.-Switzerland framework expected to lower U.S. tariff rate on Swiss watches to 15%.
  • Dividend -- Quarterly cash dividend approved at $0.35 per share.
  • Share Repurchase -- 100,000 shares repurchased year-to-date; $48.4 million authorization remaining.
  • Guidance Withheld -- No fiscal 2026 outlook provided due to economic and tariff uncertainty.
  • Marketing Expense -- Lower year-to-date versus prior year, partially offset by higher performance-based compensation.

Summary

Movado Group (MOV +6.07%) reported increased revenue, margin expansion, and operating income improvement amid global retail headwinds. Key product innovations and refreshed marketing—featuring prominent ambassadors—enabled double-digit growth in branded store sales and stronger engagement with younger and female consumers. Strategic channel and product mix shifts contributed to the margin expansion, while U.S. sales outpaced international regions, especially due to weakness in the Middle East. Recent U.S.-Switzerland tariff developments are expected to ease pricing and planning pressures in the coming year.

  • Efraim Grinberg stated, "we're increasingly optimistic about the improving dynamics in the fashion and accessible luxury watch categories," citing stronger demand from women and younger buyers.
  • The board approved a quarterly dividend of $0.35 per share.
  • Store execution initiatives and refreshed displays supported significant Movado brand outperformance within company-owned retail operations.
  • Inventory composition was described as "comfortable" despite the year-over-year increase, in part from tariffs and foreign exchange impact.

Industry glossary

  • Comparable Store Sales: Same-store sales metric used to indicate revenue growth for retail locations open for at least one year.
  • Constant Currency: A financial metric adjusted to remove the effects of foreign exchange rates, providing comparability across reporting periods.
  • Turn Lock: A design element, referenced for Coach watches, inspired by a brand-signature hardware component.

Full Conference Call Transcript

Efraim Grinberg: Thank you, Allison. Good morning, and welcome to Movado Group's third quarter conference call. Joining me today is our Executive Vice President and CFO, Sally DeMarcellus. After I review the highlights of our quarterly results, and the progress we're making against our strategic initiatives, Sally will discuss our financial results for the quarter and year to date in greater detail. We'll then be glad to take your questions. We're pleased with our results for the third quarter. And more importantly with the progress we're making in building our brands and business in a sustainable way.

In a globally challenging retail environment, we delivered revenue growth of 3.1% to $186,100,000 Excluding The Middle East, where we have rebuilt our team and are refining our strategy, growth was 5.9%. We plan to return to growth in that region next year. For the quarter, gross margin improved by 80 basis points to 54.3% compared to 53.5% last year. Despite a $4,500,000 and two thirty basis point impact from incremental U. S. Tariffs. After quarter end, The US and Switzerland announced a framework agreement that we expect will lower our overall US tariff rate on Swiss watches to 15%. Roughly one third of the rate we've paid since August.

This positive development will allow us to plan effectively for next year and reduce the level of price based mitigation. Benefiting both American consumers and the company. Adjusted operating income grew more than 40% to $12,600,000 For the first nine months, we generated positive operating cash flow of $1,300,000 versus a use of cash of $40,600,000 last year. We ended the quarter with a strong balance sheet dollars 183,900,000.0 in cash and no debt. And our board has approved a quarterly dividend of 35¢ per share. This quarter reflects continued progress on our strategic priorities. Strengthening our brands driving innovation, delivering improving financial results. Our results are a direct reflection of our team's effort, dedication, and commitment.

Despite ongoing global economic and political uncertainty, we're increasingly optimistic about the improving dynamics in the fashion and accessible luxury watch categories. Driven by innovation in new shapes, and sizes and growing interest from women and younger consumers. We're also seeing a strong momentum in fashion jewelry. Supported by the growing adoption of jewelry for men. Regionally, we're pleased that The United States returned to 6.9% growth, led by our fashion brand business and our direct to consumer business. 11.9% growth in Movado Company stores, and 12.4% growth on movado.com. Internationally, our business in Europe and Latin America continue to perform strongly partially offset by softer results in The Middle East.

From a branding standpoint, we're very pleased with the progress we're making on the Movado brand. Our product innovation this year has resonated strongly. The museum collection performed well, particularly our new BANGL collection. And we're introducing a new style that would allow lab grown diamonds for the holiday season. This collection will be featured prominently in holiday marketing with Jessica Alba and Julianne Moore. For men, we launched the Automatic Museum Imperial, a new hero collection inspired by an iconic design from the late nineteen seventies. Holiday marketing will feature the collection in videos with star running back Christian McCaffrey.

In bold, our limited edition collaboration with brand ambassador Ludacris celebrating the twenty fifth anniversary of his debut album, has been a standout. The MVP collection is already sold out. We're also seeing strong growth in Movado Heritage. Inspired by our rich archives. The new 1917 collection based on a square vintage design from that year has launched successfully. Supported by a digital campaign featuring basketball superstar Tyrese Halliburton who is an avid vintage watch collector. Sell through is strong across both men's and women's styles.

Our holiday campaign is designed to deepen engagement between our products, ambassadors, and consumers while driving performance at the point of sale through enhanced displays, training, and retail partner support to ensure an elevated in store experience. The Movado brand helped drive double digit growth in both sales and contribution margin in our company stores. Overall, sales in Movado company stores grew 9.4% on a comparable store basis. With Movado brand sales up 17.7%. Over the past year, we've refreshed all Movato display displays and visuals in our stores. Improved assortments, leading to a strong results from these initiatives.

Among our licensed brands, we saw strong performance in both jewelry and watches, delivering a 6.4% growth overall and a 2.9% on a constant currency basis. Leading the way to Gen Z consumers has been coached. Continues to drive double digit growth led by the SAMI collection. Inspired by Coach's iconic turn lock. We've expanded his hero family with SAMI stretch bracelets and a mini ring watch. Which is trending strongly. Other successes include the Caddie, Cass, and Reese families. All featuring shaped cases. Hugo Boss continues to perform well. Led by hero families such as Sky Traveler, the Grand Prix, and the Principal Tank Watch.

We're also excited about the potential in Hugo Boss jewelry, particularly for men, led by the watch inspired candor bracelet. For Tommy Hilfiger, the new T. H. Oxford family, with a dial inspired by the classic Oxford shirt is gaining traction. With new case shapes rolling out this fall. On the women's side, we are increasing our penetration with our best selling Mia collection already sold out in many markets. Lacoste continues to set trends in jewelry, with the best selling Metropole collection and strong results in the rugged LC33 anti digi lie. Which is truly aligned with the Lacoste brand. The new black and gold version introduced this fall is expected to sell out over the holidays.

In Calvin Klein, we're building leadership in women's watches, complemented by a strong jewelry offering. The Mini Pulse has quickly become a best seller and the new micro contemporary is performing very well. For Olivia Burton, we're seeing healthy growth in our two key markets. The US and The United Kingdom. Led by the Mini Grove Collection our Mini to the Max campaign, which will continue through the spring. We're very proud of our team's execution this year. Especially following a challenging fiscal twenty five. We're making strong progress against our strategic initiatives and capturing opportunities across global markets. We're also encouraged by the renewed interest among younger consumers embracing analog watches for their design, innovation, quality, and value.

With our strong portfolio of brands, we're well positioned to capture this momentum. At the same time, we've made meaningful strides in improving gross and controlling expenses as we return to sales growth. Looking ahead, our focus remains on driving improved profitability across every aspect of the business. We're looking forward to a strong holiday season and to building on this momentum as we plan for the next year. I'll now turn the call over to Sally.

Sally DeMarcellus: Thank you, Efraim, and good morning, everyone. For today's call, I will review our financial results for the third quarter and year to date period of fiscal twenty six. My comments today will focus on adjusted results. Please refer to the description of the special items included in our results for the third quarter and first nine months of fiscal twenty six and fiscal twenty five in our press release issued earlier today. Which also includes a reconciliation table of GAAP and non GAAP measures. Turning to a review of the quarter. Overall, we were pleased with our performance for the 2026. Sales were $186,100,000 as compared to $180,500,000 last year. An increase of 3.1%.

In constant dollars, the increase in net sales was 1.2%. Net sales increased across licensed brands and company stores, partially offset by a decrease in net sales in owned brands. By geography, US net sales increased nine I'm sorry, U. S. Net sales increased 6.9% as compared to the third quarter of last year. International net sales increased 0.6% with strong performances in certain markets such as Europe, and Latin America, offset by a weaker performance in The Middle East. Which is where we are making progress rebuilding this important market. On a constant currency basis, international net sales decreased 2.5%. Gross profit as a percent of sales was 54.3% compared to 53.5% in the third quarter of last year.

The increase in gross margin rate as compared to the same period last year was primarily driven by favorable channel and product mix and the increased leverage driven by certain reduced costs and higher sales. This was partially offset by increased tariffs. Operating expenses were $88,500,000 as compared to $87,900,000 for the third quarter of last year. The $600,000 increase was driven by an increase in performance based compensation partially offset by a planned reduction in marketing expenses. The combination of higher revenue and gross profit more than offset a relatively small increase in operating expenses to deliver a 43.5% increase in operating income. To $12,600,000 This is a $3,800,000 improvement from the $8,800,000 spent in the 2025.

We recorded approximately $1,200,000 of other nonoperating income in the 2026 as compared $1,400,000 in the same period of last year. Other nonoperating income is comprised of interest earned on our global cash position. We recorded income tax expense of $3,500,000 in the third quarter fiscal twenty six as compared to $1,500,000 in the third quarter fiscal twenty five. Net income in the third quarter was $10,200,000 or $0.45 per diluted share as compared to $8,500,000 or $0.37 per diluted share in the year ago period. Now turning to our year to date results. Sales for the nine month period ended 10/31/2025 were $479,700,000 as compared to $471,900,000 last year.

Total net sales increased 1.7% as compared to the nine month period of fiscal two thousand twenty five. In constant dollars, the increase in net sales for the year to date period was point 6%. U. S. Net sales increased by 1.5% and international net sales increased 1.8%. Gross profit was $260,000,000 or 54.2% of sales. As compared to $254,800,000 or 54% of sales last year. The increase in the gross margin rate for the first nine months was primarily due to favorable channel and product mix partially offset by increased tariff costs, and the unfavorable foreign currency exchange. Operating expenses were $239,500,000 as compared to $241,300,000 for the same period of last year.

The decrease was driven by a reduction in marketing expenses partially offset by an increase in performance based compensation. For the nine months ended 10/31/2025, operating income was $20,500,000 compared to $13,500,000 in fiscal twenty five. We reported approximately $4,000,000 of other nonoperating income in the nine month period of fiscal two thousand twenty is primarily comprised of interest earned on our global cash position as compared to $5,200,000 in the same period of last year. Net income was $17,400,000 or $0.77 per diluted share as compared to $13,900,000 or $0.62 per diluted share in the year ago period. Now turning to our balance sheet.

Cash at the end of the third quarter was $183,900,000 as compared to $181,500,000 in the same period of last year. Accounts receivable was $118,300,000 up $4,500,000 from the same period of last year, primarily due to foreign currency. Inventory at the end of the quarter was up $20,800,000 or 11.8% above the same period of last year. $5,400,000 of the increase was due to foreign currency. And $6,400,000 of IEPA reciprocal tariffs is included in the inventory on hand at the end of the third quarter. We are comfortable with the composition and balance of our inventory at quarter end.

In the first nine months of fiscal twenty six, capital expenditures were $3,500,000 and we repurchased approximately 100,000 shares under our share repurchase program. Of 10/31/2025, we had $48,400,000 remaining under our authorized share repurchase program. Subject to prevailing market conditions and the business environment, we plan to utilize our share repurchase program to offset dilution. As Efra mentioned, there has been a recent trade agreement impacting future Swiss tariff rates, we will adjust our mitigation strategy accordingly. Given the current economic uncertainty and the unpredictable impact of tariff developments, the company is not providing fiscal twenty six outlook. I would now like to open the call up for questions. Thank you. The floor is now open for questions.

Operator: Once again, that's star one if you'd like to register a question at this time. Our first question today is coming from Hamed Khorsand of BWS Financial. Please go ahead.

Sally DeMarcellus: Hi. Good morning. So first, I just wanted to ask you, the success you're seeing with many of your watches and brands, is that coming from your, you know, influencers, your, you know, the spokespeople that you have, or is that because of the design and it's just trending well with Gen z?

Efraim Grinberg: Well, I think it's a combination of both, Amit. Thank you. A good question. And so what you're seeing is an increased coverage of these products on social media and obviously, the bulk of our campaigns are also on digital media, and so that resonates they're resonating, with younger, consumers across the spectrum. I think it's also the combination of innovation of new shapes and sizes. And the embrace of younger consumers to the watch category. And that's occurring pretty much on a global basis. So it's it's nice to see.

Hamed Khorsand: Okay. And then as far as the commentary you made about many of your brands being selling well or being sold out, Do you want the sold out conditions? I mean, would that impair your sales?

Efraim Grinberg: So, I think it's really on some select product families across, I think I mentioned Tommy Hilfiger in some markets and some of our other brands. And I think that what you know, this is not a in some cases, we also in the case of the ludicrous watch and Movado, it was a limited edition. So it was planned to be sold out. We still have one model available. Which we expect to sell out in the next few weeks.

So I think it's always good to have a balance of supply and demand, and we'll be able to replenish most of the styles into the first early first quarter or the end of the fourth quarter of this year. So I think it's a good balance to have. And part of it is as the category comes back and the innovation has increased and consumers are drawn back into the category. Obviously, the levels of demand change. And that's also very good to see.

Hamed Khorsand: And the success you're seeing in sales, does that change your commentary coming into the calendar year about you know, what your spending levels would be for the fiscal year?

Efraim Grinberg: I think it's really a balance. And our focus has been on improving profitability. And you saw that through the first nine months of this year and particularly in quarter. So it's really we will continue to invest in our brand building efforts. But at the same time, we have made it a goal and we're very serious about it. Of driving improved profitability at the company.

Hamed Khorsand: Okay. Thank you.

Operator: Once again, that's star one if you'd like to register a question at this time. We're showing no additional questions in queue at this time. I'd like to turn the floor back over to Mr. Grinberg for closing comments.

Efraim Grinberg: Well, thank very much all for participating today. I'd like to wish everybody a great Thanksgiving holiday. And, of course, it's the really formal beginning of the holiday shopping period. We'll all be in stores looking to see how businesses out there, and I'm sure many of you will be as well as, beginning your holiday shopping. So, again, enjoy the holiday, and thank you very much for being here today.

Operator: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or lock off the webcast at this time, and enjoy the of your day.