MOVADO GROUP INC
For the period ended Jan 31, 2025. Filed Apr 16, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 16, 2025
MOV$31.03-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-01-31; filed 2024-03-26.
0000950170-24-036181
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-01-31; filed 2025-04-16.
0000950170-25-054522
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 143 current paragraphs.
71 unchanged; 30 reworded; 25 added; 5 removed; 0 previous and 17 current paragraphs rearranged.
Tables are not compared: 3 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS
Current report
The Company has restated our previously issued Consolidated Financial Statements contained in this Annual Report on Form 10-K. Refer to the "Explanatory Note" preceding Item 1, Business, for background on the restatement, the fiscal periods impacted, control considerations and other information.
Current report
In addition, we have restated certain previously reported financial information at January 31, 2024 and for the fiscal years ended January 31, 2024 and January 31, 2023 in this Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, including but not limited to information within the Results of Operations and Liquidity and Capital Resources.
Current report
See Note 1A -Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information related to the restatement, including descriptions of the misstatements and the impacts on our Consolidated Financial Statements.
Current report
Tariffs
Current report
Most of the bands used in the production of the Company’s traditional watches, as well as most of the Company’s jewelry, are made in China and have been subject to a U.S. special 7.5% tariff since February 2020. In March and April 2025, the Trump Administration announced a series of additional special tariffs, some of which have been temporarily paused. The additional such special tariffs already in effect as of the date of this annual report on Form 10-K include tariffs of 10% on all or substantially all products imported by the Company, and a 145% tariff on substantially all products of Chinese origin. Together with the special tariffs applicable to Chinese products implemented in 2018, the special tariffs on Chinese products implemented in 2025 have increased the total U.S. special tariff on Chinese packaging materials to 170% and on Chinese watch bands and jewelry to 152.5%. In addition, the special 10% tariff applicable to all other countries applies to substantially all other products imported by the Company, including all Swiss watches as well as all watch heads (i.e., the entirety of a watch other than the watch band) produced in the Far East (which generally have Japanese movements and are therefore considered products of Japan for U.S. customs purposes). These actions are expected to increase the Company’s cost of sales. If the additional special tariffs that went into effect in March and April 2025 had been in effect during fiscal 2025, cost of sales would have been approximately $25 million to $30 million higher than the $300.2 million reported, assuming all else remained unchanged. However, the Company is developing plans to lessen the impact of these tariffs, including select price increases at the wholesale and retail levels, as well as possible operational changes that could result in a change in the country of origin for certain of the Company's products. In addition, in April 2025, the Trump Administration announced a series of so-called “reciprocal” tariffs on dozens of countries with which the U.S. has a trade deficit, including special incremental tariffs of 32% on Swiss goods and 24% on Japanese goods. On April 9, 2025, the Trump Administration announced a 90-day pause in the implementation of these “reciprocal” tariffs (other than the reciprocal tariffs on China, discussed above). However, if these additional “reciprocal” tariffs go into effect, the Company will incur substantial additional increases in its cost of sales and sales volumes into the U.S. would likely decline.
Current report
Cost-Savings Initiative
Current report
During fiscal year 2025, in light of the ongoing challenging consumer-spending environment, the Company committed to a cost-savings initiative to reduce operating expenses through headcount reductions, bringing them more in line with sales. As a result of this initiative, the Company recorded $4.6 million in accruals for severance and employee-related charges and early lease termination charges of which $1.3 million was paid related to severance and employee related charges during fiscal year 2025, with the balance expected to be paid during fiscal year 2026. The Company expects go-forward annual savings from the cost-savings initiatives of approximately $10.0 million.
Current report
Net sales for fiscal 2025 were $653.4 million, representing an $11.0 million or 1.7% decrease from the prior year. Both of the Company's operating segments experienced net sales declines. For fiscal 2025, fluctuations in foreign currency exchange rates negatively impacted net sales by $1.4 million when compared to the prior year. Excluding this $1.4 million impact, net sales would have decreased by 1.5% as compared to the prior year.
Current report
Net sales for fiscal 2025 in the Watch and Accessory Brands segment were $556.4 million, below the prior year by $4.1 million, or 0.7%. The decrease in net sales was primarily due to unfavorable sales mix, mainly in the United States locations, and the negative impact of fluctuations in foreign exchange rates, partially offset by an increase in online retail in the United States locations and increased volumes resulting from higher demand in the Company's wholesale customers, mainly in the International locations.
Current report
Net sales for fiscal 2025 in the United States locations of the Watch and Accessory Brands segment were $186.5 million, below the prior year by $4.8 million, or 2.5%, resulting primarily from unfavorable sales mix, partially offset by an increase in online retail. The net sales recorded in the owned brands category decreased $11.2 million, or 7.7%, partially offset by an increase in net sales recorded in the licensed brand category of $6.8 million, or 16.0%.
Current report
Net sales for fiscal 2025 in the Company Stores segment were $97.0 million, $6.9 million or 6.7% below the prior year. The net sales decrease was primarily due to unfavorable sales mix in the Company stores, partially offset by an increase in sales from the Company's online outlet store at www.movadocompanystore.com and a new store opening. As of January 31, 2025 and 2024, the Company operated 56 and 55 retail outlet locations, respectively.
Current report
SG&A expenses for fiscal 2025 were $333.1 million, representing an increase from the prior year of $17.4 million, or 5.5%. The increase in SG&A expenses was primarily due to the following factors: higher marketing expenses of $17.2 million, a $2.5 million provision for professional fees related to the internal investigation of allegations of misconduct within the Dubai branch of the Company's Swiss subsidiary that resulted in a restatement of previously issued financial statements, an increase in payroll related expenses of $2.1 million (which included severance and payroll related costs of $4.1 million related to the cost-savings initiative discussed above under “Recent Developments and Initiatives”) and an increase in credit card and platform fees of $0.7 million. These increases were partially offset by a decrease in professional fees of $2.8 million, a decrease in the reduction of accruals for donations and doubtful accounts of $1.8 million and a decrease of $0.5 million in amortization expense related to certain intangible assets being fully amortized. For the year ended January 31, 2025, fluctuations in foreign currency rates related to the foreign subsidiaries favorably impacted SG&A expenses by $1.5 million when compared to the prior year.
Current report
For fiscal 2025, the Company recorded operating income of $7.7 million in the Watch and Accessory Brands segment which includes $30.0 million of unallocated corporate expenses as well as $67.0 million of certain intercompany profits related to the Company’s supply chain operations. For fiscal 2024, the Company recorded operating income of $31.3 million in the Watch and Accessory Brands segment which included $30.8 million of unallocated corporate expenses as well as $71.5 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of a decrease in gross profit of $6.6 million combined with higher SG&A expenses of $17.0 million when compared to the prior year. The decrease in gross profit was the result of lower net sales combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of certain fixed costs as a result of lower sales and a negative impact of fluctuations in foreign exchange rates, partially offset by decreased shipping costs. The increase in SG&A expenses of $17.0 million was primarily due to the following factors: higher marketing expenses of $16.9 million, a $2.5 million provision for professional fees related to the internal investigation of allegations of misconduct within the Dubai branch of the Company's Swiss subsidiary that resulted in a restatement of previously issued financial statements, an increase in payroll related expenses of $1.8 million (which included severance and payroll related costs of $4.1 million related to the cost-savings initiative) and an increase in credit card and platform fees of $0.7 million. These increases in SG&A expenses were partially offset by a decrease in professional fees of $2.8 million, a decrease in the reduction of accruals for donations and doubtful accounts of $1.8 million and a decrease of $0.5 million in amortization expense related to certain intangible assets being fully amortized.
Current report
In the United States locations of the Watch and Accessory Brands segment, for the twelve months ended January 31, 2025, the Company recorded an operating loss of $40.1 million which includes unallocated corporate expenses of $30.0 million. For the twelve months ended January 31, 2024 the Company recorded an operating loss of $30.0 million in the United States locations of the Watch and Accessory Brands segment which included unallocated corporate expenses of $30.8 million. The increase in operating loss was the result of an increase in gross profit of $2.0 million, offset by an increase in SG&A expenses of $12.1 million when compared to the prior year. The increase in gross profit of $2.0 million was the result of a higher gross margin percentage primarily due to the favorable impact of sales mix and decreased shipping costs, partially offset by decreased leveraging of certain fixed costs as a result of lower sales. The increase in SG&A expenses of $12.1 million was primarily due to the following factors: higher marketing expenses of $11.7 million, a $2.5 million provision for professional fees related to the internal investigation of allegations of misconduct within the Dubai branch of the Company's Swiss subsidiary that resulted in a restatement of previously issued financial statements, an increase in credit card and platform fees of $0.7 million, while payroll related expenses remained flat (but included severance and payroll related costs of $1.9 million related to the cost-savings initiative). These increases in SG&A expenses were partially offset by a decrease in professional fees of $2.4 million and a decrease in the reduction of accruals for donations and doubtful accounts of $2.0 million.
Current report
In the International locations of the Watch and Accessory Brands segment, for the twelve months ended January 31, 2025, the Company recorded operating income of $47.8 million which includes $67.0 million of certain intercompany profits related to the Company’s International supply chain operations. For the twelve months ended January 31, 2024, the Company recorded operating income of $61.3 million in the International locations of the Watch and Accessory Brands segment which included $71.5 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of lower gross profit of $8.7 million combined with higher SG&A expenses of $4.8 million when compared to the prior year. The decrease in gross profit of $8.7 million was the result of a lower gross margin percentage primarily due to the unfavorable impact of sales mix and a negative impact of fluctuations in foreign exchange rates, partially offset by decreased shipping costs. The increase in SG&A expenses of $4.8 million was primarily due to the following factors: higher marketing expenses of $5.2 million and an increase in payroll related expenses of $1.8 million (which included severance and payroll related costs of $2.2 million related to the cost-savings initiative). These increases in SG&A expenses were partially offset by a decrease of $0.5 million in amortization expense related to certain intangible assets being fully amortized and a decrease in professional fees of $0.4 million.
Current report
The Company recorded operating income of $12.3 million and $17.2 million in the Company Stores segment for fiscal 2025 and 2024, respectively. The decrease in operating income of $4.9 million was primarily related to a decrease in gross profit of $4.4 million, mainly due to lower net sales combined with a lower gross margin percentage, and higher SG&A expenses of $0.5 million primarily due to an increase in payroll related expenses of $0.3 million and higher marketing expenses of $0.3 million. As of January 31, 2025, and 2024, the Company Stores segment operated 56 and 55 retail outlet locations, respectively.
Current report
The Company recorded other income, net of $7.1 million primarily due to interest income for the twelve months ended January 31, 2025.
Current report
Fiscal 2024 (As Restated) Compared to Fiscal 2023 (As Restated)
Current report
Company Stores Net Sales
Current report
Gross Profit
Current report
Company Stores Operating Income
Current report
Other Non-Operating Income
Current report
The Company recorded an income tax provision of $11.8 million and $24.3 million for fiscal 2024 and 2023, respectively.
Current report
The Company recorded net income attributable to Movado Group, Inc. of $41.3 million and $90.4 million for fiscal 2024 and 2023, respectively.
Removed paragraphs (5)
Previous report
Net Sales
Previous report
Interest Expense
Previous report
Net Sales
Previous report
Interest Expense
Previous report
On March 23, 2023, the Company declared a special cash dividend of $1.00 per share, as well as a quarterly cash dividend of $0.35 per share, both paid on April 19, 2023, to shareholders of record on April 5, 2023. The total dividends of $29.9 million were paid on April 19, 2023. The Company paid cash dividends of $0.35 per share, or $7.7 million, during the three months ended July 31, 2023; $0.35 per share, or $7.8 million, during the three months ended October 31, 2023; and $0.35 per share, or $7.7 million, during the three months ended January 31, 2024. The Company paid cash dividends of $0.35 per share, or $7.9 million, during the three months ended April 30, 2022; $0.35 per share, or $7.9 million, during the three months ended July 31, 2022; $0.35 per share, or $7.8 million, during the three months ended October 31, 2022; and $0.35 per share, or $7.8 million, during the three months ended January 31, 2023.
Reworded paragraphs (30)
Previous wording
56.8% of the Company’s total sales are from international markets (see Note 18 to the Consolidated Financial Statements), and therefore reported sales made in those markets are affected by foreign exchange rates. The Company’s international sales are primarily billed in local currencies (predominantly Euros, British Pounds and Swiss Francs) and translated to U.S. dollars at average exchange rates for financial reporting purposes. The Company reduces its exposure to exchange rate risk through a hedging program.
Current wording
57.4% of the Company’s total sales are from international markets (see Note 19 to the Consolidated Financial Statements), and therefore reported sales made in those markets are affected by foreign exchange rates. The Company’s international sales are primarily billed in local currencies (predominantly Euros, British Pounds and Swiss Francs) and translated to U.S. dollars at average exchange rates for financial reporting purposes. The Company reduces its exposure to exchange rate risk through a hedging program.
Previous wording
The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all other non-U.S. Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia account for 30.5%, 9.3%, 9.0% and 8.0%, respectively, of the Company’s total net sales for fiscal 2024. A vast majority of the Company’s tangible International assets are owned by the Company’s Swiss and Hong Kong subsidiaries.
Current wording
The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all other non-U.S. Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Americas (excluding the United States), Asia and the Middle East account for 31.0%, 9.9%, 8.9% and 7.6%, respectively, of the Company’s total net sales for fiscal 2025. A vast majority of the Company’s tangible International assets are owned by the Company’s Swiss and Hong Kong subsidiaries.
Previous wording
The Company’s business is seasonal. There are two major selling seasons in the Company’s markets: the spring season, which includes school graduations and several holidays; and, most importantly, the Christmas and holiday season. Major selling seasons in certain international markets center on significant local holidays that occur in late winter or early spring. The Company’s net sales historically have been higher during the second half of the fiscal year. The second half of each fiscal year accounted for 54.6% and 54.0% of the Company’s net sales for the fiscal years ended January 31, 2024 and 2023, respectively.
Current wording
The Company’s business is seasonal. There are two major selling seasons in the Company’s markets: the spring season, which includes school graduations and several holidays and, most importantly, the Christmas and holiday season. Major selling seasons in certain international markets center on significant local holidays that occur in late winter or early spring. The Company’s net sales historically have been higher during the second half of the fiscal year. The second half of each fiscal year accounted for 55.4% and 54.2% of the Company’s net sales for the fiscal years ended January 31, 2025 and 2024, respectively.
Previous wording
The Company’s retail operations consist of 51 retail outlet locations in the United States and four locations in Canada.
Current wording
The Company’s retail operations consist of 52 retail outlet locations in the United States and four locations in Canada.
Previous wording
Cost of sales of the Company’s products consists primarily of costs for raw materials, component costs, royalties, depreciation, amortization, assembly costs, shipping to customers, design costs and unit overhead costs associated with the Company’s supply chain operations predominately in Switzerland and Asia. The Company’s supply chain operations consist of logistics management of assembly operations and product sourcing predominately in Switzerland and Asia and minor assembly in Switzerland. Through productivity improvement efforts, the Company has controlled the level of overhead costs and maintained flexibility in its cost structure by outsourcing a significant portion of its component and assembly requirements.
Current wording
Cost of sales of the Company’s products consists primarily of costs for raw materials, component costs, royalties, depreciation, amortization, assembly costs, shipping to customers, import duties, design costs and unit overhead costs associated with the Company’s supply chain operations predominately in Switzerland and Asia. The Company’s supply chain operations consist of logistics management of assembly operations and product sourcing predominately in Switzerland and Asia and minor assembly in Switzerland. Through productivity improvement efforts, the Company has controlled the level of overhead costs and maintained flexibility in its cost structure by outsourcing a significant portion of its component and assembly requirements.
Previous wording
Other non-operating income, net consist primarily of interest income and the non-service components of the Company's Swiss pension plan. In addition, for the fiscal year ended January 31, 2024, the Company recorded an impairment related to an equity investment in a consumer products company that sold its business and assets in which the Company expects to receive little or no return on its investment. Also, for the fiscal year ended January 31, 2022, the Company recorded other non-operating income due to the final settlement related to a sale of a building in an international location in the prior year period.
Current wording
Other non-operating income, net consist primarily of interest income and the non-service components of the Company's Swiss pension plan. In addition, for the fiscal year ended January 31, 2024, the Company recorded an impairment related to an equity investment in a consumer products company that sold its business and assets in which the Company expects to receive little or no return on its investment.
Previous wording
In August 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law by President Biden. Among other things, the IR Act implemented a 1% excise tax on the fair market stock repurchases by covered corporations, a 15% minimum tax based on adjusted financial statement income of certain large corporations, and several tax incentives to promote clean energy. Although the Company is continuing to evaluate the IR Act and its potential impact on future periods, at this time the Company does not expect the IR Act to have a material impact on its Consolidated Financial Statements.
Current wording
In August 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law by President Biden. Among other things, the IR Act implemented a 1% excise tax on the fair market stock repurchases by covered corporations, a 15% minimum tax based on adjusted financial statement income of certain large corporations, and several tax incentives to promote clean energy. Although the Company is continuing to evaluate the IR Act and its potential impact on future periods, to date, the IR Act has not had a material impact on its Consolidated Financial Statements.
Previous wording
The OECD has issued Pillar Two model rules implementing a new global minimum tax of 15%, which is intended to be effective on January 1, 2024. While the U.S. has not yet adopted the Pillar Two rules, several other countries have adopted and enacted changes to their legislation in response to Pillar Two. The Company's turnover currently does not meet the minimum requirements that were set by OECD inclusive framework and rules. Although the Company will continue to evaluate and monitor the enactments of Pillar Two, to the extent that Pillar Two becomes applicable, the Company does not expect a material impact on its Consolidated Financial Statements.
Current wording
The Organization for Economic Cooperation and Development ("OECD") has issued Pillar Two model rules implementing a new global minimum tax of 15%, which was intended to be effective on January 1, 2024. While several countries have adopted and enacted changes to their legislation in response to Pillar Two, in January 2025, the President of the United States issued an executive order announcing the United States’ opposition to aspects of these rules. The Company's revenue currently does not meet the minimum requirements that were set by OECD inclusive framework and rules. Although the Company will continue to evaluate and monitor the enactments of Pillar Two, to the extent that Pillar Two becomes applicable, the Company does not expect a material impact on its Consolidated Financial Statements.
Previous wording
The following is a discussion of the results of operations for fiscal 2024 compared to fiscal 2023 along with a discussion of the changes in financial condition during fiscal 2024. For a discussion of our results of operations in fiscal year 2023 compared to fiscal year 2022, please see “Results of Operations” in Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on March 23, 2023.
Current wording
The following is a discussion of the results of operations for fiscal 2025 compared to fiscal 2024 and fiscal 2024 compared to fiscal 2023 along with a discussion of the changes in financial condition during fiscal 2025. The fiscal year 2024 and 2023 amounts reflect the restatements described in Note 1A - Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data.
Previous wording
Fiscal 2024 Compared to Fiscal 2023
Current wording
Fiscal 2025 Compared to Fiscal 2024 (As Restated)
Previous wording
Gross profit for fiscal 2024 was $370.4 million or 55.1% of net sales as compared to $433.9 million or 57.7% of net sales in the prior year. The decrease in gross profit of $63.5 million was primarily due to lower net sales combined with a lower gross margin percentage. The decrease in the gross margin percentage of approximately 260 basis points for fiscal 2024 reflected an unfavorable impact of sales mix of approximately 180 basis points, the decreased leveraging of higher fixed costs over lower sales of approximately 90 basis points and a negative impact of fluctuations in foreign exchange rates of approximately 30 basis points, partially offset by decreased shipping costs of approximately 40 basis points.
Current wording
Gross profit for fiscal 2025 was $353.1 million or 54.0% of net sales as compared to $364.2 million or 54.8% of net sales in the prior year. The decrease in gross profit of $11.1 million was due to lower net sales combined with a lower gross margin percentage. The decrease in the gross margin percentage of approximately 80 basis points for fiscal 2025 reflected an unfavorable impact of sales mix of approximately 50 basis points, the decreased leveraging of certain fixed costs as a result of lower sales of approximately 30 basis points and a negative impact of fluctuations in foreign exchange rates of approximately 10 basis points, partially offset by decreased shipping costs of approximately 10 basis points.
Previous wording
The Company recorded an income tax provision of $12.7 million and $24.9 million for fiscal 2024 and 2023, respectively.
Current wording
The Company recorded an income tax provision of $7.4 million and $11.8 million for fiscal 2025 and 2024, respectively.
Previous wording
The Company recorded net income attributable to Movado Group, Inc. of $46.7 million and $94.5 million for fiscal 2024 and 2023, respectively.
Current wording
The Company recorded net income attributable to Movado Group, Inc. of $18.4 million and $41.3 million for fiscal 2025 and 2024, respectively.
Previous wording
Net sales for fiscal 2024 were $672.6 million, representing a $79.3 million or 10.5% decrease from the prior year. This decrease is attributable to the Watch and Accessory Brands segment and, to a lesser extent, the Company Stores segment. For fiscal 2024, fluctuations in foreign currency exchange rates positively impacted net sales by $8.6 million when compared to the prior year. Excluding this $8.6 million impact, net sales would have decreased by 11.7% as compared to the prior year.
Current wording
Net sales for fiscal 2024 were $664.4 million, representing a $79.8 million or 10.7% decrease from the prior year. This decrease is attributable to the Watch and Accessory Brands segment and, to a lesser extent, the Company Stores segment. For fiscal 2024, fluctuations in foreign currency exchange rates positively impacted net sales by $8.6 million when compared to the prior year. Excluding this $8.6 million impact, net sales would have decreased by 11.9% as compared to the prior year.
Previous wording
Net sales for fiscal 2024 in the Watch and Accessory Brands segment were $568.7 million, below the prior year by $71.7 million, or 11.2%. The decrease in net sales was primarily due to decreased volumes resulting from lower demand in the Company's wholesale customers in both the United States and International locations and a decrease in online retail, partially offset by the positive impact of fluctuations in foreign exchange rates.
Current wording
Net sales for fiscal 2024 in the Watch and Accessory Brands segment were $560.5 million, below the prior year by $72.2 million, or 11.4%. The decrease in net sales was primarily due to decreased volumes resulting from lower demand in the Company's wholesale customers in both the United States and International locations and a decrease in online retail, partially offset by the positive impact of fluctuations in foreign exchange rates.
Previous wording
Net sales for fiscal 2024 in the International locations of the Watch and Accessory Brands segment were $377.4 million, below the prior year by $35.7 million, or 8.6%, which included fluctuations in foreign currency exchange rates that positively impacted net sales by $8.6 million when compared to the prior year. The decrease in net sales was in both the owned and licensed brand categories primarily due to decreased volumes resulting from lower demand in the Company's wholesale customers and a decrease in online retail, partially offset by the positive impact of fluctuations in foreign exchange rates. The net sales decrease recorded in the owned brands category was $4.5 million, or 7.7%, primarily due to net sales decreases in Europe, the Americas (excluding the United States) and the Middle East, partially offset by a net sales increase in Asia. The net sales decrease in the licensed brands category was $28.5 million, or 8.2%, primarily due to net sales decreases in Europe and the Americas (excluding the United States), partially offset by net sales increases in the Middle East and Asia.
Current wording
Net sales for fiscal 2024 in the International locations of the Watch and Accessory Brands segment were $369.2 million, below the prior year by $36.2 million, or 8.9%, which included fluctuations in foreign currency exchange rates that positively impacted net sales by $8.6 million when compared to the prior year. The decrease in net sales was in both the owned and licensed brand categories primarily due to decreased volumes resulting from lower demand in the Company's wholesale customers and a decrease in online retail, partially offset by the positive impact of fluctuations in foreign exchange rates. The net sales decrease recorded in the owned brands category was $4.5 million, or 7.7%, primarily due to net sales decreases in Europe, the Americas (excluding the United States) and the Middle East, partially offset by a net sales increase in Asia. The net sales decrease in the licensed brands category was $29.1 million, or 8.5%, primarily due to net sales decreases in Europe and the Americas (excluding the United States), partially offset by net sales increases in the Middle East and Asia.
Previous wording
For fiscal 2024, the Company recorded operating income of $37.5 million in the Watch and Accessory Brands segment which includes $30.8 million of unallocated corporate expenses as well as $71.5 million of certain intercompany profits related to the Company’s supply chain operations. For fiscal 2023, the Company recorded operating income of $95.0 million in the Watch and Accessory Brands segment which included $37.0 million of unallocated corporate expenses as well as $81.0 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of a decrease in gross profit of $56.0 million combined with higher SG&A expenses of $1.5 million when compared to the prior year. The decrease in gross profit was primarily the result of lower net sales combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of higher fixed costs over lower sales and a negative impact of fluctuations in foreign exchange rates, partially offset by lower shipping costs. The increase in SG&A expenses of $1.5 million was primarily due to the following factors: an increase in payroll related expenses of $9.8 million; higher marketing expenses of $1.5 million; and an increase in travel and entertainment expenses of $1.1 million. Increased SG&A expenses were partially offset by a decrease in performance-based compensation of $10.8 million.
Current wording
For fiscal 2024, the Company recorded operating income of $31.3 million in the Watch and Accessory Brands segment which includes $30.8 million of unallocated corporate expenses as well as $71.5 million of certain intercompany profits related to the Company’s supply chain operations. For fiscal 2023, the Company recorded operating income of $90.3 million in the Watch and Accessory Brands segment which included $37.0 million of unallocated corporate expenses as well as $81.0 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of a decrease in gross profit of $57.5 million combined with higher SG&A expenses of $1.5 million when compared to the prior year. The decrease in gross profit was primarily the result of lower net sales combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of higher fixed costs over lower sales and a negative impact of fluctuations in foreign exchange rates, partially offset by lower shipping costs. The increase in SG&A expenses of $1.5 million was primarily due to the following factors: an increase in payroll related expenses of $9.8 million; higher marketing expenses of $1.5 million; and an increase in travel and entertainment expenses of $1.1 million. Increased SG&A expenses were partially offset by a decrease in performance-based compensation of $10.8 million.
Previous wording
In the International locations of the Watch and Accessory Brands segment, for the twelve months ended January 31, 2024, the Company recorded operating income of $67.6 million which includes $71.5 million of certain intercompany profits related to the Company’s International supply chain operations. For the twelve months ended January 31, 2023 the Company recorded operating income of $98.1 million in the International locations of the Watch and Accessory Brands segment which included $81.0 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of lower gross profit of $26.1 million combined with higher SG&A expenses of $4.4 million. The decrease in gross profit of $26.1 million was primarily the result of lower net sales, combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of higher fixed costs over lower sales and a negative impact of fluctuations in foreign exchange rates, partially offset by lower shipping costs. The increase in SG&A expenses of $4.4 million was primarily due to the following factors: an increase in payroll related expenses of $4.3 million; higher marketing expenses of $1.5 million; and an increase in travel and entertainment expenses of $0.5 million. These increases in SG&A expenses were partially offset by a decrease in performance-based compensation of $2.7 million.
Current wording
In the International locations of the Watch and Accessory Brands segment, for the twelve months ended January 31, 2024, the Company recorded operating income of $61.3 million which includes $71.5 million of certain intercompany profits related to the Company’s International supply chain operations. For the twelve months ended January 31, 2023 the Company recorded operating income of $93.3 million in the International locations of the Watch and Accessory Brands segment which included $81.0 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of lower gross profit of $27.6 million combined with higher SG&A expenses of $4.4 million. The decrease in gross profit of $27.6 million was primarily the result of lower net sales, combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of higher fixed costs over lower sales and a negative impact of fluctuations in foreign exchange rates, partially offset by lower shipping costs. The increase in SG&A expenses of $4.4 million was primarily due to the following factors: an increase in payroll related expenses of $4.3 million; higher marketing expenses of $1.5 million; and an increase in travel and entertainment expenses of $0.5 million. These increases in SG&A expenses were partially offset by a decrease in performance-based compensation of $2.7 million.
Previous wording
The effective tax rate for fiscal 2024 was 21.0% and was essentially equivalent to the U.S. statutory tax rate of 21.0% primarily due to foreign profits being taxed in lower taxing jurisdictions, partially offset by U.S. state and local taxes, net of the federal benefit. The effective tax rate for fiscal 2023 was 20.4% and differed from the U.S. statutory tax rate of 21.0% primarily due to foreign profits being taxed in lower taxing jurisdictions and the release of certain foreign valuation allowances, partially offset by U.S. state and local taxes, net of the federal benefit.
Current wording
The effective tax rate for fiscal 2024 was 21.8% and differed from the U.S. statutory tax rate of 21.0% primarily due to foreign profits being taxed in lower taxing jurisdictions, partially offset by cross-border tax effects and U.S. state and local taxes, net of the federal benefit. The effective tax rate for fiscal 2023 was 20.7% and differed from the U.S. statutory tax rate of 21.0% primarily due to foreign profits being taxed in lower taxing jurisdictions and the release of certain foreign valuation allowances, partially offset by U.S. state and local taxes, net of the federal benefit.
Previous wording
At January 31, 2024 and January 31, 2023, the Company had $262.1 million and $251.6 million, respectively, of cash and cash equivalents. Of this total, $176.1 million and $114.0 million, respectively, consisted of cash and cash equivalents at the Company’s foreign subsidiaries.
Current wording
At January 31, 2025 and January 31, 2024, the Company had $208.5 million and $262.1 million, respectively, of cash and cash equivalents. Of this total, $83.3 million and $176.1 million, respectively, consisted of cash and cash equivalents at the Company’s foreign subsidiaries.
Previous wording
At January 31, 2024 the Company had working capital of $430.8 million as compared to $424.8 million at January 31, 2023. The increase in working capital was primarily the result of an increase in cash and trade receivables and a decrease in income taxes payable, accrued liabilities and accrued payroll and benefits, partially offset by a decrease in inventories. The Company defines working capital as the difference between current assets and current liabilities.
Current wording
At January 31, 2025 the Company had working capital of $377.0 million as compared to $419.9 million at January 31, 2024. The decrease in working capital was primarily the result of a decrease in cash and an increase in accrued liabilities, partially offset by an increase in trade receivables and a decrease in income taxes payable. The Company defines working capital as the difference between current assets and current liabilities.
Previous wording
The Company had $76.8 million of cash provided by operating activities for fiscal 2024 as compared to $54.3 million for fiscal 2023. Cash provided by operating activities for fiscal 2024 included net income of $47.5 million, positively adjusted by $24.6 million related to non-cash items. Cash provided by operating activities for fiscal 2024 included a $37.7 million decrease in investment in inventories primarily due to timing of receipts to align with sales levels, partially offset by a change in payments related to income taxes of $16.7 million primarily due to timing, a decrease in accrued payroll and benefits of $9.9 million primarily as a result of payments of fiscal year 2023 performance-based compensation and an increase of $9.1 million in trade receivables as a result of timing of receipts and change in sales mix. Cash provided by operating activities for fiscal 2023 included net income of $97.0 million, positively adjusted by $20.3 million related to non-cash items. Cash used in operating activities for fiscal 2023 was impacted by a $28.9 million increase in investment in inventories primarily due to timing of receipts, a decrease of $13.7 million in accounts payable primarily due to timing of payments and a decrease in accrued payroll of $7.7 million primarily as a result of payments of fiscal year 2022 performance-based compensation, net of fiscal year 2023 accrual.
Current wording
The Company had $1.5 million of cash used in operating activities for fiscal 2025 as compared to $76.8 million of cash provided by operating activities for fiscal 2024. Cash used in operating activities for fiscal 2025 included $19.2 million of net income, adjusted for non-cash items of $18.9 million. Cash used in operating activities primarily included tax related net payments of $12.4 million, $11.6 million increase in trade receivables due to timing of receipts and changes in sales mix and increase in inventories of $11.7 million based on timing of receipts and sales. Cash provided by operating activities for fiscal 2024 included net income of $42.2 million, positively adjusted by $24.6 million related to non-cash items. Cash provided by operating activities for fiscal 2024 included a $35.7 million decrease in investment in inventories primarily due to timing of receipts to align with sales levels, partially offset by a change in payments related to income taxes of $17.6 million primarily due to timing and a decrease in accrued payroll and benefits of $9.9 million primarily as a result of payments of fiscal year 2023 performance-based compensation.
Previous wording
Cash used in investing was $11.5 million for fiscal 2024 as compared to $10.6 million for fiscal 2023. The cash used in fiscal 2024 was primarily related to capital expenditures of $8.2 million primarily due to new computer software and leasehold improvements and $3.1 million of long-term investments. Cash used in investing activities for fiscal 2023 included $7.1 million of capital expenditures and $3.3 million of long-term investments.
Current wording
Cash used in investing was $13.7 million for fiscal 2025 as compared to $11.5 million for fiscal 2024. The cash used in fiscal 2025 was primarily related to capital expenditures of $8.0 million mainly due to expenditures for computer software, shop-in-shops and leasehold improvements and $5.7 million of long-term investments. Cash used in investing activities for fiscal 2024 included $8.2 million of capital expenditures and $3.1 million of long-term investments.
Previous wording
The Company expects that capital expenditures in fiscal 2025 will be approximately $11.0 million as compared to $8.2 million in fiscal 2024. The capital spending will be primarily for projects in the ordinary course of business including facilities improvements, shop-in-shops, website development, computer hardware and software and tooling costs. The Company has the ability to manage its capital expenditures on discretionary projects.
Current wording
The Company expects that capital expenditures in fiscal 2026 will be approximately $10.0 million as compared to $8.0 million in fiscal 2025. The capital spending will be primarily for projects in the ordinary course of business including facilities improvements, shop-in-shops, website development, computer hardware and software and tooling costs. The Company has the ability to manage its capital expenditures on discretionary projects.
Previous wording
Cash used in financing activities was $57.6 million for fiscal 2024 as compared to $65.3 million for fiscal 2023. The cash used in fiscal 2024 included $53.1 million in dividends paid, which included a special cash dividend of $1.00 per share, $3.1 million in stock repurchased in the open market and $1.4 million paid for the distribution of noncontrolling interest earnings. Cash used in financing activities in fiscal 2023 included $31.4 million in stock repurchased in the open market and $31.4 million in dividends paid.
Current wording
Cash used in financing activities was $35.4 million for fiscal 2025 as compared to $57.6 million for fiscal 2024. The cash used in fiscal 2025 included $31.1 million in dividends paid, $2.6 million in stock repurchased in the open market, $1.2 million of shares repurchased as a result of the surrender of shares by employees in connection with the vesting of certain stock awards and $0.6 million paid for the distribution of noncontrolling interest earnings. Cash used in financing activities in fiscal 2024 included $53.1 million in dividends paid, which included a special cash dividend of $1.00 per share, $3.1 million in stock repurchased in the open market and $1.4 million paid for the distribution of noncontrolling interest earnings.
Previous wording
The Company's Swiss subsidiary maintains unsecured lines of credit with a Swiss bank that are subject to repayment upon demand. As of January 31, 2024, and 2023, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.5 million and $7.1 million, respectively. As of January 31, 2024, and 2023, there were no borrowings against these lines. As of January 31, 2024, and 2023, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.4 million and $1.2 million, respectively, in various foreign currencies, of which $0.8 million and $0.6 million, respectively, was a restricted deposit as it relates to lease agreements.
Current wording
The Company's Swiss subsidiary maintains unsecured lines of credit with a Swiss bank that are subject to repayment upon demand. As of January 31, 2025, and 2024, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.1 million and $7.5 million, respectively. As of January 31, 2025, and 2024, there were no borrowings against these lines. As of January 31, 2025, and 2024, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.3 million and $1.4 million, respectively, in various foreign currencies, of which $0.7 million and $0.8 million, respectively, was a restricted deposit as it relates to lease agreements.
Previous wording
Cash paid for interest, including unused commitments fees and amortization of debt fees, was $0.3 million during both fiscal 2024 and 2023, respectively.
Current wording
Cash paid for interest, including unused commitments fees, was $0.3 million during both fiscal 2025 and 2024, respectively.
Previous wording
From time to time the Company may make minority investments in growth companies in the consumer products sector and other sectors relevant to its business, including certain of the Company's suppliers and customers, as well as in venture capital funds that invest in companies in media, entertainment, information technology and technology-related fields and in digital assets. During fiscal 2022, the Company committed to invest up to $21.5 million in such investments. The Company funded approximately $5.3 million of these commitments through fiscal 2023 and an additional $3.1 million during fiscal 2024 and may be called upon to satisfy capital calls in respect of the remaining $13.1 million in such commitments at any time during a period generally ending ten years after the first capital call in respect of a given commitment. One consumer products company in which the Company made an equity investment in fiscal year 2022 sold its business and assets in the first quarter of fiscal 2024 in a transaction that is expected to yield little or no return for equity holders. As a result, the Company fully impaired its $0.5 million investment in this entity in the first quarter of fiscal 2024.
Current wording
From time to time, the Company may make minority investments in growth companies in the consumer products sector and other sectors relevant to its business, including certain of the Company's suppliers and customers, as well as in venture capital funds that invest in companies in media, entertainment, information technology and technology-related fields and in digital assets. During fiscal 2022, the Company committed to invest up to $21.5 million in such investments. The Company funded approximately $8.4 million of these commitments through fiscal 2024 and an additional $5.7 million during fiscal 2025 and may be called upon to satisfy capital calls in respect of the remaining $7.5 million in such commitments at any time during a period generally ending ten years after the first capital call in respect of a given commitment. One consumer products company in which the Company made an equity investment in fiscal year 2022 sold its business and assets in the first quarter of fiscal 2024 in a transaction that yielded little return for equity holders. As a result, the Company fully impaired its $0.5 million investment in this entity in fiscal 2024.
Previous wording
Although the Company currently expects to continue to declare cash dividends in the future, the decision of whether to declare any future cash dividend, including the amount of any such dividend and the establishment of record and payment dates, will be determined, in each quarter, by the Board of Directors, in its sole discretion.
Current wording
During fiscal 2025, the Company has declared and paid a total of four separate cash dividends of $0.35 per share aggregating to $31.1 million. During fiscal 2024, the Company declared and paid four separate cash dividends of $0.35 per share and a special cash dividend of $1.00 per share aggregating to $53.1 million. Although the Company currently expects to continue to declare cash dividends in the future, the decision of whether to declare any future cash dividend, including the amount of any such dividend and the establishment of record and payment dates, will be determined, in each quarter, by the Board of Directors, in its sole discretion.
Previous wording
On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to $50.0 million of its outstanding common stock through November 23, 2024, depending on market conditions, share price and other factors. Under the share repurchase program, the Company is permitted to purchase shares of its common stock from time to time through open market purchases, repurchase plans, block trades or otherwise. During fiscal 2024, the Company repurchased a total of 111,722 shares of its common stock at a total cost of $3.1 million, or an average of $27.89 per share. At January 31, 2024, $17.9 million remains available for purchase under the Company's November 23, 2021 repurchase program. During fiscal 2023, the Company repurchased a total of 898,956 shares of its common stock under the November 23, 2021 share repurchase program and a prior share repurchase program that expired on September 30, 2022 at a total cost of $31.4 million, or an average of $34.94 per share.
Current wording
On November 23, 2021, the Board approved a share repurchase program under which the Company was authorized to purchase up to $50.0 million of its outstanding common stock through November 23, 2024, depending on market conditions, share price and other factors. On December 5, 2024, the Board approved a new share repurchase program under which the Company is authorized to purchase up to $50.0 million of its outstanding common stock through December 5, 2027, depending on market conditions, share price and other factors. These repurchases may be made through open market purchases, repurchase plans, block trades or otherwise. During fiscal 2025, the Company repurchased a total of 120,000 shares of its common stock at a total cost of $2.6 million, or an average of $21.90 per share. During fiscal 2024, the Company repurchased a total of 111,722 shares of its common stock at a total cost of $3.1 million, or an average of $27.89 per share. At January 31, 2025, all $50.0 million remains available for purchase under the Company's December 5, 2024 repurchase program.
Rearranged current paragraphs (17)
Current report — wording carried from elsewhere
Net sales for fiscal 2025 in the International locations of the Watch and Accessory Brands segment were $369.9 million, above the prior year by $0.7 million, or 0.2%, which included fluctuations in foreign currency exchange rates that negatively impacted net sales by $1.4 million when compared to the prior year. The increase in net sales was primarily due to increased volumes resulting from higher demand in the Company's wholesale customers, partially offset by the negative impact of fluctuations in foreign exchange rates. The net sales decrease recorded in the owned brands category was $3.8 million, or 7.1%, due to net sales decreases in Europe, the Middle East and the Americas (excluding the United States), partially offset by an increase in Asia. The net sales increase in the licensed brands category was $4.3 million, or 1.4%, primarily due to net sales increases in Asia and the Americas (excluding the United States), partially offset by net sales decreases in the Middle East and Europe.
Current report — wording carried from elsewhere
For the twelve months ended January 31, 2024, the Company recorded other income, net of $6.0 million primarily due to interest income, partially offset by a $0.5 million impairment related to an equity investment in a consumer products company that sold its business and assets in a transaction that yielded little return for equity holders.
Current report — wording carried from elsewhere
Interest expense was $0.5 million primarily due to the payment of unused commitment fees for both fiscal 2025 and 2024. There were no borrowings under the Company's revolving credit facility during fiscal 2025 and 2024.
Current report — wording carried from elsewhere
The effective tax rate for fiscal 2025 was 27.9% and differed from the U.S. statutory tax rate of 21.0% primarily due to the tax consequences of a foreign currency gain related to an extraordinary intercompany dividend and an increase in valuation allowances against certain foreign losses, partially offset by foreign profits being taxed in lower taxing jurisdictions. The effective tax rate for fiscal 2024 was 21.8% and differed from the U.S. statutory tax rate of 21.0% primarily due to foreign profits being taxed in lower taxing jurisdictions, partially offset by cross-border tax effects and U.S. state and local taxes, net of the federal benefit.
Current report — wording carried from elsewhere
The following are net sales by business segment and geographic location (in thousands):
Current report — wording carried from elsewhere
The following are net sales by category (in thousands):
Current report — wording carried from elsewhere
The following table presents the Company’s results of operations expressed as a percentage of net sales for the fiscal years indicated:
Current report — wording carried from elsewhere
Watch and Accessory Brands Net Sales
Current report — wording carried from elsewhere
United States Watch and Accessory Brands Net Sales
Current report — wording carried from elsewhere
International Watch and Accessory Brands Net Sales
Current report — wording carried from elsewhere
Gross profit for fiscal 2024 was $364.2 million or 54.8% of net sales as compared to $429.1 million or 57.7% of net sales in the prior year. The decrease in gross profit of $64.9 million was primarily due to lower net sales combined with a lower gross margin percentage.
Current report — wording carried from elsewhere
The decrease in the gross margin percentage of approximately 290 basis points for fiscal 2024 reflected an unfavorable impact of sales mix of approximately 210 basis points, the decreased leveraging of higher fixed costs over lower sales of approximately 90 basis points and a negative impact of fluctuations in foreign exchange rates of approximately 30 basis points, partially offset by decreased shipping costs of approximately 40 basis points.
Current report — wording carried from elsewhere
Selling, General and Administrative (“SG&A”)
Current report — wording carried from elsewhere
Watch and Accessory Brands Operating Income
Current report — wording carried from elsewhere
U.S. Watch and Accessory Brands Operating Loss
Current report — wording carried from elsewhere
International Watch and Accessory Brands Operating Income
Current report — wording carried from elsewhere
Net Income Attributable to Movado Group, Inc.