MOVADO GROUP INC
For the period ended Jul 31, 2025. Filed Aug 28, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2025 · Filed Aug 28, 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-Q
Period ended 2025-04-30; filed 2025-05-29.
0000950170-25-078622
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-07-31; filed 2025-08-28.
0001193125-25-190723
Item 2. 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 76 previous paragraphs and 111 current paragraphs.
42 unchanged; 25 reworded; 31 added; 9 removed; 0 previous and 13 current paragraphs rearranged.
Tables are not compared: 2 previous and 4 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 (31)
Current report
The majority of the Company’s products are sourced from Switzerland, Japan, and China. For U.S. customs purposes, the Company’s Swiss watches are classified as products of Switzerland. Watches produced in the Far East generally consist of watch heads that originate in Japan and bands that originate in China. In addition, most of the Company’s jewelry and packaging is of Chinese origin.
Current report
Since February 2020, the Company’s U.S. imports of Chinese-origin watch bands and jewelry have been subject to a special incremental tariff of 7.5%, and imports of Chinese-origin packaging have been subject to a 25% special tariff. Since March 2025, the United States government has imposed additional tariffs on its global trading partners, with individual rates set for each country following trade negotiations. As of the date of this quarterly report, additional special tariffs apply as follows: 30% on U.S. imports of China-origin goods, 15% on Japan-origin goods, and 39% on Switzerland-origin goods.
Current report
If these special tariffs remain in effect, they are expected to materially increase the Company’s U.S. cost of sales and negatively impact sales volumes in the United States. In response, the Company has implemented selective wholesale and retail price increases and is developing additional mitigation strategies. These include potential changes to sourcing and operational processes that could result in a change in country of origin for certain products or otherwise reduce the Company’s exposure to U.S. tariffs. However, the Company expects the tariffs to have a material impact on its U.S. operations even after giving effect to any mitigation efforts, unless these rates are significantly reduced.
Current report
One Big Beautiful Bill Act
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law by President Trump. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company will continue to evaluate and monitor potential impact on future periods, however, the Company does not expect the OBBBA to have a material impact on its Consolidated Financial Statements.
Current report
Net sales for the three months ended July 31, 2025 in the Watch and Accessory Brands segment were $135.7 million, above the prior year period by $4.1 million, or 3.1%. The increase in net sales was primarily due to increased volumes resulting from higher demand in the Company's wholesale customers, with an increase in net sales recorded in the licensed brands category of $8.0 million, or 9.5%, partially offset by a decrease in net sales recorded in the owned brands category of $3.2 million, or 7.2%. Fluctuations in foreign exchange rates positively impacted net sales for the three months ended July 31, 2025, while an unfavorable sales mix limited net sales growth relative to unit volume growth.
Current report
Net sales for the three months ended July 31, 2025 in the United States locations of the Watch and Accessory Brands segment were $44.8 million, below the prior year period by $1.7 million, or 3.7%, resulting primarily from an unfavorable sales mix. The net sales recorded in the owned brands category decreased $2.4 million, or 7.0%, partially offset by an increase in net sales recorded in the licensed brands category of $1.2 million, or 10.7%.
Current report
In the United States locations of the Watch and Accessory Brands segment, for the three months ended July 31, 2025, the Company recorded operating loss of $17.0 million which includes unallocated corporate expenses of $10.7 million. For the three months ended July 31, 2024 the Company recorded operating loss of $7.9 million in the United States locations of the Watch and Accessory Brands segment which included unallocated corporate expenses of $5.5 million. The increase in operating loss was the result of a decrease in gross profit of $3.8 million combined with an increase in SG&A expenses of $5.3 million when compared to the prior year period. The decrease in gross profit of $3.8 million was the result of lower net sales combined with a lower gross margin percentage primarily due to increased U.S. tariffs, a negative impact of fluctuations in foreign exchange rates and the decreased leveraging of certain fixed costs as a result of lower sales. The increase in SG&A expenses was primarily due to (i) an increase in professional fees of $1.9 million mainly related to the internal investigation of allegations of misconduct within the Company's Dubai branch, (ii) an increase in performance-based compensation of $1.7 million and (iii) higher marketing expenses of $1.6 million. These increases were partially offset by a decrease in payroll related expenses of $0.5 million (which included severance costs of $0.3 million related to the cost-savings initiative).
Current report
In the International locations of the Watch and Accessory Brands segment, for the three months ended July 31, 2025, the Company recorded operating income of $16.8 million which includes $14.6 million of certain intercompany profits related to the Company’s International supply chain operations. For the three months ended July 31, 2024 the Company recorded operating income of $6.9 million in the International locations of the Watch and Accessory Brands segment which included $14.1 million of certain intercompany profits related to the Company’s supply chain operations. The increase in operating income was the result of higher gross profit of $5.5 million combined with lower SG&A expenses of $4.4 million. The increase in gross profit of $5.5 million was primarily the result of higher net sales combined with a higher gross margin percentage primarily due to a favorable impact of sales mix, increased leveraging of certain fixed costs as a result of higher sales, the positive impact of fluctuations in foreign exchange rates and lower shipping costs. The decrease in SG&A expenses was primarily due to (i) lower marketing expense of $3.6 million and (ii) a $0.8 million decrease in foreign exchange losses. Payroll related expenses remained flat but included severance costs of $0.6 million related to the cost-savings initiative.
Current report
The Company recorded operating income of $4.2 million and $3.7 million in the Company Stores segment for the three months ended July 31, 2025 and 2024, respectively. The increase in operating income of $0.5 million was primarily related to an increase in gross profit of $0.6 million, mainly due to higher sales combined with a higher gross margin percentage, partially offset by an increase in SG&A expenses of $0.1 million primarily due to rent related expenses due to a new store opening. As of July 31, 2025, and 2024, the Company Stores segment operated 57 and 56 retail outlet locations, respectively.
Current report
The Company recorded other income, net of $1.2 million the three months ended July 31, 2025, primarily due to interest income, partially offset by a non-cash impairment charge of $0.4 million related to one of its investments in a venture capital fund in which the Company has a limited partnership interest. The write-down was a result of a decline in the fair value of the investment primarily attributable to a deterioration in the financial condition and operating performance of certain of the underlying portfolio companies within the fund that was determined to be other than temporary.
Current report
The Company recorded other income, net of $1.9 million for the three months ended July 31, 2024, primarily due to interest income.
Current report
Results of operations for the six months ended July 31, 2025 as compared to the six months ended July 31, 2024 (As Restated)
Current report
Net Sales
Current report
Net sales for the six months ended July 31, 2025 were $293.6 million, representing a $2.2 million or 0.8% increase from the prior year period. For the six months ended July 31, 2025, fluctuations in foreign currency exchange rates positively impacted net sales by $1.4 million when compared to the prior year period. Excluding this $1.4 million impact, net sales would have increased by 0.3% as compared to the prior year period.
Current report
Net sales for the six months ended July 31, 2025 in the Watch and Accessory Brands segment were $250.5 million, above the prior year period by $1.8 million, or 0.7%. The increase in net sales was primarily due to increased volumes resulting from higher demand in the Company's wholesale customers, with an increase in net sales recorded in the licensed brands category of $14.2 million, or 9.0%, partially offset by a decrease in net sales recorded in the owned brands category of $10.1 million, or 11.8%. Fluctuations in foreign exchange rates positively impacted net sales for the six months ended July 31, 2025, while an unfavorable sales mix limited net sales growth relative to unit volume growth.
Current report
Net sales for the six months ended July 31, 2025 in the United States locations of the Watch and Accessory Brands segment were $83.4 million, below the prior year period by $2.3 million, or 2.6%, resulting primarily from an unfavorable sales mix. The net sales recorded in the owned brands category decreased $6.1 million, or 9.5%, partially offset by an increase in net sales recorded in the licensed brands category of $4.4 million, or 22.4%.
Current report
Net sales for the six months ended July 31, 2025 in the International locations of the Watch and Accessory Brands segment were $167.1 million, above the prior year by $4.0 million, or 2.5%, which included fluctuations in foreign currency exchange rates that positively impacted net sales by $1.4 million when compared to the prior year period. The increase in net sales was primarily due to increased volumes resulting from higher demand in the Company's wholesale customers and the positive impact of fluctuations in foreign exchange rates, partially offset due to an unfavorable sales mix. The net sales increase recorded in the licensed brands category was $9.8 million, or 7.1%, primarily due to net sales increases in Europe, the Americas (excluding the United States) and the Middle East, partially offset by a net sales decrease in Asia. The net sales decrease recorded in the owned brands category was $4.0 million, or 18.5%, due to net sales decreases in the Middle East, Asia and the Americas (excluding the United States), partially offset by a net sales increase in Europe.
Current report
Company Stores Net Sales
Current report
Net sales for the six months ended July 31, 2025 in the Company Stores segment were $43.1 million, $0.5 million or 1.1% above the prior year period. The net sales increase was primarily due to an increase in sales from the Company's online outlet store at www.movadocompanystore.com and a new store opening, partially offset by unfavorable sales mix in the Company stores. As of July 31, 2025 and 2024, the Company operated 57 and 56 retail outlet locations, respectively.
Current report
Gross Profit
Current report
SG&A expenses for the six months ended July 31, 2025 were $154.6 million, representing an increase from the prior year period of $1.2 million, or 0.8%. The increase in SG&A expenses was primarily due to (i) an increase in performance-based compensation of $2.6 million, (ii) an increase in professional fees of $2.0 million mainly 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 and (iii) a $1.8 million increase in foreign exchange losses mainly due to a highly volatile foreign currency environment. These increases were partially offset by lower marketing expenses of $3.2 million and a decrease in payroll related expense of $2.9 million (which included severance costs of $1.5 million related to the cost-savings initiative). For the six months ended July 31, 2025, fluctuations in foreign currency rates related to the foreign subsidiaries unfavorably impacted SG&A expenses by $2.9 million when compared to the prior year period.
Current report
For the six months ended July 31, 2025 the Company recorded operating loss of $0.2 million in the Watch and Accessory Brands segment which includes $18.7 million of unallocated corporate expenses as well as $28.6 million of certain intercompany profits related to the Company’s supply chain operations. For the six months ended July 31, 2024, the Company recorded operating income of $0.6 million in the Watch and Accessory Brands segment which included $15.0 million of unallocated corporate expenses as well as $28.3 million of certain intercompany profits related to the Company’s supply chain operations. The $0.8 million change in operating income/loss was the result of an increase in gross profit of $0.5 million, offset by higher SG&A expenses of $1.3 million when compared to the prior year period. The increase in gross profit was the result of higher net sales, partially offset by a lower gross margin percentage primarily due to a negative impact of fluctuations in foreign exchange rates and increased U.S. tariffs, partially offset by the favorable impact of sales mix and the increased leveraging of certain fixed costs as a result of higher sales. The increase in SG&A expenses was primarily due to (i) an increase in performance-based compensation of $2.5 million, (ii) an increase in professional fees of $2.0 million mainly related to the internal investigation of allegations of misconduct within the Company's Dubai branch and (iii) a $1.8 million increase in foreign exchange losses mainly due to a highly volatile foreign currency environment. These increases were partially offset by lower marketing expenses of $3.1 million and a decrease in payroll related expense of $2.8 million (which included severance costs of $1.5 million related to the cost-savings initiative).
Current report
Company Stores Operating Income
Current report
Other Non-Operating Income, net
Current report
The Company recorded other income, net of $3.0 million for the six months ended July 31, 2025, primarily due to interest income, partially offset by a non-cash impairment charge of $0.4 million related to one of its investments in a venture capital fund in which the Company has a limited partnership interest. The write-down was a result of a decline in the fair value of the investment primarily attributable to a deterioration in the financial condition and operating performance of certain of the underlying portfolio companies within the fund that was determined to be other than temporary.
Current report
The Company recorded other income, net of $4.0 million for the six months ended July 31, 2024, primarily due to interest income.
Current report
Interest Expense
Current report
Income Taxes
Current report
The Company recorded an income tax provision of $2.6 million and $2.9 million for the six months ended July 31, 2025 and 2024, respectively.
Current report
The Company recorded net income attributable to Movado Group, Inc. of $4.4 million and $5.5 million for the six months ended July 31, 2025 and 2024, respectively.
Removed paragraphs (9)
Previous 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 April 2025, the United States government imposed a baseline special tariff of 10% on products from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including special incremental tariffs of 31% on Swiss goods and 24% on Japanese goods. Later in April, the United States government implemented a 90-day pause on the country-specific tariffs for all countries except China, while maintaining the 10% baseline tariff. The special 10% tariff 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. 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.
Previous report
In May 2025, the United States government announced a 90-day pause on most recent tariffs on Chinese imports, reducing the combined tariff on such imports from 145% to 30% during this period. 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 55% and on Chinese watch bands and jewelry to 37.5%.
Previous report
If the paused reciprocal tariffs on Chinese, Swiss, Japanese and other countries’ goods were to go into effect, the Company would incur substantial additional increases in its cost of sales, and sales volumes into the United States would likely decline.
Previous report
The Inflation Reduction Act of 2022
Previous report
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 report
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 report
Net sales for the three months ended April 30, 2025 in the Watch and Accessory Brands segment were $114.8 million, below the prior year period by $2.3 million, or 2.0%. The decrease in net sales was primarily due to unfavorable sales mix, with a decrease in net sales recorded in the owned brands category of $6.8 million, or 17.0%, partially offset by an increase in net sales recorded in the licensed brands category of $6.2 million, or 8.3%, and the negative impact of fluctuations in foreign exchange rates.
Previous report
Net sales for the three months ended April 30, 2025 in the United States locations of the Watch and Accessory Brands segment were $38.6 million, below the prior year period by $0.5 million, or 1.4%, resulting primarily from unfavorable sales mix. The net sales recorded in the owned brands category decreased $3.7 million, or 12.5%, partially offset by an increase in net sales recorded in the licensed brands category of $3.2 million, or 37.0%.
Previous report
The Company recorded other income, net of $1.8 million and $2.2 million for the three months ended April 30, 2025 and April 30, 2024, respectively, primarily due to interest income.
Reworded paragraphs (25)
Previous wording
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, during fiscal year 2025, the Company recorded $4.6 million in accruals for severance and employee-related charges and early lease termination charges and an additional $0.6 million was recorded in accruals for severance and employee-related charges during the first three months of fiscal year 2026. Of the total amount recorded, $1.3 million was paid related to severance and employee related charges during fiscal year 2025, and $1.0 million paid related to severance and employee-related charges during the first three months of fiscal year 2026, with the balance expected to be paid during the remainder of fiscal year 2026. The Company expects go-forward annual savings from the cost-savings initiatives of approximately $10.0 million.
Current wording
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, during fiscal year 2025, the Company recorded $4.6 million in accruals for severance and employee-related charges and early lease termination charges and an additional $1.5 million was recorded in accruals for severance and employee-related charges during the first six months of fiscal year 2026. Of the total amount recorded, $1.3 million was paid related to severance and employee related charges during fiscal year 2025, and $2.0 million paid related to severance and employee-related charges and $0.5 million of early lease termination related fees and costs were paid/utilized during the first six months of fiscal year 2026, with the balance expected to be paid during the remainder of fiscal year 2026. The Company expects go-forward annual savings from the cost-savings initiatives of approximately $10.0 million.
Previous wording
The following is a discussion of the results of operations for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, along with a discussion of the changes in financial condition during the first three months of fiscal 2026. The Company’s results of operations for the first three months of fiscal 2026 should not be deemed indicative of the results that the Company will experience for the full year of fiscal 2026. See “Recent Developments and Initiatives” above. See also “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025 filed with the Securities and Exchange Commission on April 16, 2025.
Current wording
The following is a discussion of the results of operations for the three and six months ended July 31, 2025 compared to the three and six months ended July 31, 2024, along with a discussion of the changes in financial condition during the first six months of fiscal 2026. The Company’s results of operations for the first six months of fiscal 2026 should not be deemed indicative of the results that the Company will experience for the full year of fiscal 2026. See “Recent Developments and Initiatives” above. See also “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025 filed with the Securities and Exchange Commission on April 16, 2025.
Previous wording
Net sales for the three months ended April 30, 2025 were $131.8 million, representing a $2.6 million or 1.9% decrease from the prior year period. For the three months ended April 30, 2025, fluctuations in foreign currency exchange rates negatively impacted net sales by $1.2 million when compared to the prior year period. Excluding this $1.2 million impact, net sales would have decreased by 1.0% as compared to the prior year period.
Current wording
Net sales for the three months ended July 31, 2025 were $161.8 million, representing a $4.8 million or 3.1% increase from the prior year period. For the three months ended July 31, 2025, fluctuations in foreign currency exchange rates positively impacted net sales by $2.6 million when compared to the prior year period. Excluding this $2.6 million impact, net sales would have increased by 1.4% as compared to the prior year period.
Previous wording
Net sales for the three months ended April 30, 2025 in the International locations of the Watch and Accessory Brands segment were $76.2 million, below the prior year by $1.8 million, or 2.3%, which included fluctuations in foreign currency exchange rates that negatively impacted net sales by $1.2 million when compared to the prior year period. The decrease in net sales was primarily due to unfavorable sales mix and the negative impact of fluctuations in foreign exchange rates. The net sales decrease recorded in the owned brands category was $3.1 million, or 29.5%, due to net sales decreases across all regions. The net sales increase recorded in the licensed brands category was $3.0 million, or 4.5%, primarily due to net sales increases in Europe, the Middle East and the Americas (excluding the United States), partially offset by a net sales decrease in Asia.
Current wording
Net sales for the three months ended July 31, 2025 in the International locations of the Watch and Accessory Brands segment were $90.9 million, above the prior year by $5.8 million, or 6.8%, which included fluctuations in foreign currency exchange rates that positively impacted net sales by $2.6 million when compared to the prior year period. The increase in net sales was primarily due to increased volumes resulting from higher demand in the Company's wholesale customers and the positive impact of fluctuations in foreign exchange rates. The net sales increase recorded in the licensed brands category was $6.9 million, or 9.3%, primarily due to net sales increases in Europe and the Americas (excluding the United States), partially offset by net sales decreases in the Middle East and Asia. The net sales decrease recorded in the owned brands category was $0.8 million, or 7.6%, due to net sales decreases in the Middle East, Asia and the Americas (excluding the United States), partially offset by a net sales increase in Europe.
Previous wording
Net sales for the three months ended April 30, 2025 in the Company Stores segment were $17.0 million, $0.3 million or 1.7% below the prior year period. The net sales decrease was primarily due to unfavorable sales mix in the Company stores, partially offset by a new store opening. The net sales related to the Company's online outlet store at www.movadocompanystore.com were relatively flat as compared to the prior year period. As of April 30, 2025 and 2024, the Company operated 56 and 55 retail outlet locations, respectively.
Current wording
Net sales for the three months ended July 31, 2025 in the Company Stores segment were $26.2 million, $0.8 million or 3.0% above the prior year period. The net sales increase was primarily due to an increase in sales from the Company's online outlet store at www.movadocompanystore.com and a new store opening, partially offset by unfavorable sales mix in the Company stores. As of July 31, 2025 and 2024, the Company operated 57 and 56 retail outlet locations, respectively.
Previous wording
Gross profit for the three months ended April 30, 2025 was $71.4 million or 54.1% of net sales as compared to $72.9 million or 54.3% of net sales in the prior year period. The decrease in gross profit of $1.5 million was due to lower net sales combined with a lower gross margin percentage. The decrease in the gross margin percentage of approximately 20 basis points for the three months ended April 30, 2025 reflected a negative impact of fluctuations in foreign exchange rates of approximately 100 basis points, approximately 30 basis points due to increased shipping costs and the decreased leveraging of certain fixed costs as a result of lower sales of approximately 20 basis points, partially offset by the favorable impact of sales mix of approximately 130 basis points.
Current wording
Gross profit for the three months ended July 31, 2025 was $87.6 million or 54.1% of net sales as compared to $85.3 million or 54.3% of net sales in the prior year period. The increase in gross profit of $2.3 million was due to higher net sales partially offset by a lower gross margin percentage. The decrease in the gross margin percentage of approximately 20 basis points for the three months ended July 31, 2025 reflected a negative impact due to increased U.S. tariffs (approximately 130 basis points) and a negative impact of fluctuations in foreign exchange rates (approximately 100 basis points), partially offset by a favorable sales mix (approximately 150 basis points), lower shipping costs (approximately 30 basis points) and the increased leveraging of certain fixed costs from higher sales (approximately 30 basis points).
Previous wording
SG&A expenses for the three months ended April 30, 2025 were $71.1 million, representing an increase from the prior year period of $0.3 million, or 0.4%. The increase in SG&A expenses was primarily due to the following factors: a $2.7 million increase in foreign exchange losses mainly due to a highly volatile foreign currency environment and an increase in performance-based compensation of $1.0 million. These increases were partially offset by a decrease in payroll related expense of $2.4 million (which included severance costs of $0.6 million related to the cost-savings initiative discussed above under "Recent Developments and Initiatives") and lower marketing expense of $1.2 million. For the three months ended April 30, 2025, fluctuations in foreign currency rates related to the foreign subsidiaries unfavorably impacted SG&A expenses by $1.5 million when compared to the prior year period.
Current wording
SG&A expenses for the three months ended July 31, 2025 were $83.6 million, representing an increase from the prior year period of $0.9 million, or 1.1%. The increase in SG&A expenses was primarily due to (i) an increase in professional fees of $2.1 million mainly 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 and (ii) an increase in performance-based compensation of $1.6 million. These increases were partially offset by lower marketing expense of $2.0 million, a $0.8 million decrease in foreign exchange losses and a decrease in payroll related expenses of $0.5 million (which included severance costs of $0.9 million related to the cost-savings initiative discussed under "Recent Developments and Initiatives"). For the three months ended July 31, 2025, fluctuations in foreign currency rates related to the foreign subsidiaries unfavorably impacted SG&A expenses by $1.4 million when compared to the prior year period.
Previous wording
For the three months ended April 30, 2025 the Company recorded operating loss of less than $0.1 million in the Watch and Accessory Brands segment which includes $8.0 million of unallocated corporate expenses as well as $14.0 million of certain intercompany profits related to the Company’s supply chain operations. For the three months ended April 30, 2024, the Company recorded operating income of $1.7 million in the Watch and Accessory Brands segment which included $9.5 million of unallocated corporate expenses as well as $14.2 million of certain intercompany profits related to the Company’s supply chain operations. The $1.7 million change in operating income/loss was the result of a decrease in gross profit of $1.2 million combined with higher SG&A expenses of $0.5 million when compared to the prior year period. The decrease in gross profit was the result of lower net sales while the gross margin percentage remained flat with a negative impact of fluctuations in foreign exchange rates, increased shipping costs and the decreased leveraging of certain fixed costs as a result of lower sales, offset by the favorable impact of sales mix. The increase in SG&A expenses was primarily due to the following factors: a $2.7 million increase in foreign exchange losses mainly due to a highly volatile foreign currency environment and an increase in performance-based compensation of $1.0 million. These increases were partially offset by a decrease in payroll related expense of $2.3 million (which included severance costs of $0.6 million related to the cost-savings initiative) and lower marketing expense of $1.0 million.
Current wording
For the three months ended July 31, 2025 the Company recorded operating loss of $0.2 million in the Watch and Accessory Brands segment which includes $10.7 million of unallocated corporate expenses as well as $14.6 million of certain intercompany profits related to the Company’s supply chain operations. For the three months ended July 31, 2024, the Company recorded operating loss of $1.0 million in the Watch and Accessory Brands segment which included $5.5 million of unallocated corporate expenses as well as $14.1 million of certain intercompany profits related to the Company’s supply chain operations. The $0.8 million decrease in operating loss was the result of an increase in gross profit of $1.7 million, partially offset by higher SG&A expenses of $0.9 million when compared to the prior year period. The increase in gross profit was the result of higher net sales, partially offset by a lower gross margin percentage primarily due to increased U.S. tariffs and a negative impact of fluctuations in foreign exchange rates, partially offset by the favorable impact of sales mix, lower shipping costs and the increased leveraging of certain fixed costs as a result of higher sales. The increase in SG&A expenses was primarily due to (i) an increase in professional fees of $2.1 million mainly related to the internal investigation of allegations of misconduct within the Company's Dubai branch and (ii) an increase in performance-based compensation of $1.5 million. These increases were partially offset by lower marketing expense of $2.0 million, a $0.8 million decrease in foreign exchange losses and a decrease in payroll related expenses of $0.4 million (which included severance costs of $0.9 million related to the cost-savings initiative).
Previous wording
The Company recorded an income tax provision of $0.7 million and $2.0 million for the three months ended April 30, 2025 and 2024, respectively.
Current wording
The Company recorded an income tax provision of $2.0 million and $0.8 million for the three months ended July 31, 2025 and 2024, respectively.
Previous wording
The effective tax rate was 34.0% and 48.7% for the three months ended April 30, 2025 and 2024, respectively. The significant components of the effective tax rate changed primarily due to changes in valuation allowances against certain foreign losses and a limitation on a portion of the foreign tax credits and deductions related to the tax on Global Intangible Low-Taxed Income ("GILTI"), partially offset by excess tax deficiencies related to stock-based compensation and changes in jurisdictional earnings.
Current wording
The effective tax rate was 38.5% and 19.1% for the three months ended July 31, 2025 and 2024, respectively. The significant components of the effective tax rate changed primarily due to changes in jurisdictional earnings mix resulting in a change in valuation allowances against certain foreign losses and a limitation on a portion of the foreign tax credits and deductions related to the tax on Global Intangible Low-Taxed Income ("GILTI").
Previous wording
The Company recorded net income attributable to Movado Group, Inc. of $1.4 million and $2.0 million for the three months ended April 30, 2025 and 2024, respectively.
Current wording
The Company recorded net income attributable to Movado Group, Inc. of $3.0 million and $3.5 million for the three months ended July 31, 2025 and 2024, respectively.
Previous wording
In the United States locations of the Watch and Accessory Brands segment, for the three months ended April 30, 2025, the Company recorded operating loss of $7.0 million which includes unallocated corporate expenses of $8.0 million. For the three months ended April 30, 2024 the Company recorded an operating loss of $8.1 million in the United States locations of the Watch and Accessory Brands segment which included unallocated corporate expenses of $9.5 million. The decrease in operating loss was the result of a decrease in gross profit of $3.3 million offset by a decrease in SG&A expenses of $4.4 million when compared to the prior year period. The decrease in gross profit of $3.3 million was the result of lower net sales combined with a lower gross margin percentage primarily due to the negative impact of fluctuations in foreign exchange rates. The decrease in SG&A expenses was primarily due to the following factors: a decrease in payroll related expenses of $1.7 million, a decrease in information technology related charges of $1.0 million and lower marketing expenses of $0.8 million. These increases were partially offset by an increase in performance-based compensation of $0.8 million.
Current wording
In the United States locations of the Watch and Accessory Brands segment, for the six months ended July 31, 2025, the Company recorded operating loss of $24.0 million which includes unallocated corporate expenses of $18.7 million. For the six months ended July 31, 2024 the Company recorded an operating loss of $16.0 million in the United States locations of the Watch and Accessory Brands segment which included unallocated corporate expenses of $15.0 million. The increase in operating loss was the result of a decrease in gross profit of $7.0 million combined with an increase in SG&A expenses of $1.0 million when compared to the prior year period. The decrease in gross profit of $7.0 million was the result of lower net sales combined with a lower gross margin percentage primarily due to the negative impact of fluctuations in foreign exchange rates, increased U.S. tariffs, unfavorable sales mix and the decreased leveraging of certain fixed costs as a result of lower sales. The increase in SG&A expenses was primarily due to (i) an increase in performance-based compensation of $2.5 million, (ii) an increase in professional fees of $1.8 million mainly related to the internal investigation of allegations of misconduct within the Company's Dubai branch and (iii) higher marketing expenses of $0.8 million. These increases were partially offset by a decrease in payroll related expense of $2.2 million (which included severance costs of $0.3 million related to the cost-savings initiative) and a decrease in information technology related charges of $1.3 million.
Previous wording
In the International locations of the Watch and Accessory Brands segment, for the three months ended April 30, 2025, the Company recorded operating income of $7.0 million which includes $14.0 million of certain intercompany profits related to the Company’s International supply chain operations. For the three months ended April 30, 2024 the Company recorded operating income of $9.8 million in the International locations of the Watch and Accessory Brands segment which included $14.2 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of higher gross profit of $2.1 million offset by higher SG&A expenses of $4.9 million. The increase in gross profit of $2.1 million was primarily the result of a higher gross margin percentage primarily due to a favorable impact of sales mix and the positive impact of fluctuations in foreign exchange rates, partially offset by increased shipping costs and the decreased leveraging of certain fixed costs as a result of lower sales. The increase in SG&A expenses was primarily due to the following factors: a $2.7 million increase in foreign exchange losses mainly due to a highly volatile foreign currency environment, an increase in information technology related charges of $0.9 million and an increase in performance-based compensation of $0.2 million. These increases were partially offset by a decrease in payroll related expense (which included severance costs of $0.6 million related to the cost-savings initiative) of $0.6 million and lower marketing expense of $0.2 million.
Current wording
In the International locations of the Watch and Accessory Brands segment, for the six months ended July 31, 2025, the Company recorded operating income of $23.8 million which includes $28.6 million of certain intercompany profits related to the Company’s International supply chain operations. For the six months ended July 31, 2024 the Company recorded operating income of $16.6 million in the International locations of the Watch and Accessory Brands segment which included $28.3 million of certain intercompany profits related to the Company’s supply chain operations. The increase in operating income was the result of higher a gross profit of $7.6 million partially offset by higher SG&A expenses of $0.4 million. The increase in gross profit of $7.6 million was primarily the result of higher sales and a higher gross margin percentage primarily due to a favorable impact of sales mix, the increased leveraging of certain fixed costs as a result of higher sales and the positive impact of fluctuations in foreign exchange rates. The increase in SG&A expenses was primarily due to (i) a $1.8 million increase in foreign exchange losses mainly due to a highly volatile foreign currency environment, (ii) an increase in information technology related charges of $1.0 million and (iii) an increase in professional fees of $0.2 million mainly related to the internal investigation of allegations of misconduct within the Company's Dubai branch. These increases were offset by lower marketing expenses of $3.9 million and a $0.6 million decrease in payroll related expense (which included severance costs of $1.2 million related to the cost-savings initiative).
Previous wording
The Company recorded operating income of $0.3 million and $0.5 million in the Company Stores segment for the three months ended April 30, 2025 and 2024, respectively. The decrease in operating income of $0.2 million was primarily related to a decrease in gross profit of $0.4 million, mainly due to lower sales combined with a lower gross margin percentage, partially offset by lower SG&A expenses of $0.2 million primarily due to lower marketing expenses. As of April 30, 2025, and 2024, the Company Stores segment operated 56 and 55 retail outlet locations, respectively.
Current wording
The Company recorded operating income of $4.4 million and $4.1 million in the Company Stores segment for the six months ended July 31, 2025 and 2024, respectively. The increase in operating income of $0.3 million was primarily related to an increase in gross profit of $0.2 million mainly due to higher sales, partially offset by a lower gross margin percentage, combined with lower SG&A expenses of $0.1 million primarily due to lower marketing expenses. As of July 31, 2025, and 2024, the Company Stores segment operated 57 and 56 retail outlet locations, respectively.
Previous wording
At April 30, 2025 and April 30, 2024, the Company had $203.1 million and $225.4 million, respectively, of cash and cash equivalents. Of this total, $86.4 million and $155.5 million, respectively, consisted of cash and cash equivalents at the Company's foreign subsidiaries.
Current wording
At July 31, 2025 and July 31, 2024, the Company had $180.5 million and $198.3 million, respectively, of cash and cash equivalents. Of this total, $71.9 million and $142.4 million, respectively, consisted of cash and cash equivalents at the Company's foreign subsidiaries.
Previous wording
At April 30, 2025 the Company had working capital of $385.5 million as compared to $398.5 million at April 30, 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 inventories. The Company defines working capital as the difference between current assets and current liabilities.
Current wording
At July 31, 2025 the Company had working capital of $384.8 million as compared to $392.8 million at July 31, 2024. The decrease in working capital was primarily the result of a decrease in cash and an increase in accrued liabilities and accrued payroll and benefits, partially offset by an increase in inventories and trade receivables, net. The Company defines working capital as the difference between current assets and current liabilities.
Previous wording
The Company had $7.2 million of cash used in operating activities for the three months ended April 30, 2025 as compared to $18.1 million of cash used in operating activities for the three months ended April 30, 2024. Cash used in operating activities for the three months ended April 30, 2025 included net income of $1.3 million, positively adjusted by $2.9 million related to non-cash items. Cash used in operating activities for the three months ended April 30, 2025 included a $26.7 million increase in investment in inventories primarily due to timing of receipts. Cash provided by operating activities for the three months ended April 30 2025 included a $9.6 million decrease in trade receivables due to timing of receipts and change in sales mix during the quarter and decreases in net payments related to taxes, other current assets, accrued liabilities, accrued payroll and benefits and accounts payable totaling $5.5 million primarily due to timing. Cash used in operating activities for the three months ended April 30, 2024 included net income of $2.1 million, positively adjusted by $3.5 million related to non-cash items. Cash used in operating activities for the three months ended April 30, 2024 included a $15.7 million increase in investment in inventories primarily due to timing of receipts to align with sales levels and net tax related payments of $9.1 million primarily due to timing.
Current wording
The Company had $11.0 million of cash used in operating activities for the six months ended July 31, 2025 as compared to $35.9 million of cash used in operating activities for the six months ended July 31, 2024. Cash used in operating activities for the six months ended July 31, 2025 included net income of $4.4 million, positively adjusted by $10.3 million related to non-cash items. Cash used in operating activities for the six months ended July 31, 2025 included a $44.4 million increase in inventories due in part to the Company strategically increasing its inventory to mitigate potential cost increases and potential supply chain disruptions associated with the new tariffs and to meet sales projections and demands and an increase in tax related payments of $5.0 million. Cash provided by operating activities for the six months ended July 31 2025 included a $4.8 million decrease in trade receivables due to timing of receipts and change in sales mix during the six months and decreases in net payments related to accrued liabilities and accrued payroll and benefits of $19.2 million primarily due to timing. Cash used in operating activities for the six months ended July 31, 2024 included net income of $5.7 million, positively adjusted by $9.3 million related to non-cash items. Cash used in operating activities for the six months ended July 31, 2024 included a $32.3 million increase in investment in inventories primarily due to timing of receipts to align with sales levels, a $2.3 million increase in trade receivables due to timing of sales during the quarter and increases in net payments related to taxes, other current assets, accrued liabilities and accrued payroll and benefits totaling $20.1 million primarily due to timing.
Previous wording
Cash used in investing activities was $2.8 million for the three months ended April 30, 2025 as compared to cash used in investing activities of $4.8 million for the three months ended April 30, 2024. The cash used in the three months ended April 30, 2025 was primarily related to capital expenditures of $1.5 million mainly due to expenditures related to Company stores and shop-in-shops and $1.3 million of long-term investments. Cash used in investing activities for the three months ended April 30, 2024 included $3.1 million of long-term investments and $1.6 million of capital expenditures.
Current wording
Cash used in investing activities was $4.8 million for the six months ended July 31, 2025 as compared to cash used in investing activities of $8.3 million for the six months ended July 31, 2024. The cash used in the six months ended July 31, 2025 was primarily related to capital expenditures of $2.8 million mainly due to expenditures related to Company stores and shop-in-shops and $1.9 million of long-term investments. Cash used in investing activities for the six months ended July 31, 2024 included $4.3 million of long-term investments and $3.9 million of capital expenditures.
Previous wording
Cash used in financing activities was $0.5 million for the three months ended April 30, 2025 as compared to cash used in financing activities of $9.9 million for the three months ended April 30, 2024. The cash used in the three months ended April 30, 2025 was due to $0.5 million of shares repurchased as a result of the surrender of shares by employees in connection with the vesting of certain stock awards. In addition, during the three months ended April 30, 2025, the Company declared a cash dividend of $0.35 per share for $7.8 million, payable on May 6, 2025. Cash used in financing activities for the three months ended April 30, 2024 included $7.8 million in dividends paid, $1.1 million in stock repurchased in the open market and $1.0 million of shares repurchased as a result of the surrender of shares in connection with the vesting of certain stock awards.
Current wording
Cash used in financing activities was $17.6 million for the six months ended July 31, 2025 as compared to cash used in financing activities of $17.7 million for the six months ended July 31, 2024. The cash used in the six months ended July 31, 2025 included $15.6 million in dividends paid, $1.6 million in stock repurchased in the open market and $0.5 million of shares repurchased as a result of the surrender of shares by employees in connection with the vesting of certain stock awards. Cash used in financing activities for the six months ended July 31, 2024 included $15.5 million in dividends paid, $1.1 million in stock repurchased in the open market and $1.1 million of shares repurchased as a result of the surrender of shares by employees in connection with the vesting of certain stock awards.
Previous wording
The Company had weighted average borrowings under the Facility of zero during both the three months ended April 30, 2025 and 2024, respectively.
Current wording
The Company had weighted average borrowings under the Facility of zero during both the three and six months ended July 31, 2025 and 2024, respectively.
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 April 30, 2025, and 2024, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.9 million and $7.1 million, respectively. As of April 30, 2025, and 2024, there were no borrowings against these lines. As of April 30, 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 $1.5 million and $1.3 million, respectively, in various foreign currencies, of which $0.8 million for both periods, 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 July 31, 2025, and 2024, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $8.0 million and $7.4 million, respectively. As of July 31, 2025, and 2024, there were no borrowings against these lines. As of July 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 $1.5 million and $1.4 million, respectively, in various foreign currencies, of which $0.8 million and $0.7 million, respectively, was a restricted deposit as it relates to lease agreements.
Previous wording
Cash paid for interest, including unused commitments fees, was $0.1 million for both the three month periods ended April 30, 2025 and April 30, 2024, respectively.
Current wording
Cash paid for interest, including unused commitments fees, was $0.1 million for both the six month periods ended July 31, 2025 and July 31, 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 $14.1 million of these commitments through fiscal 2025 and an additional $1.3 million during the first three months of fiscal 2026 and may be called upon to satisfy capital calls in respect of the remaining $6.2 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.
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 $14.1 million of these commitments through fiscal 2025 and an additional $1.9 million during the first six months of fiscal 2026 and may be called upon to satisfy capital calls in respect of the remaining $5.6 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. During the three-month period ended July 31, 2025, the Company recorded a non-cash impairment charge of $0.4 million related to one of its investments in a venture capital fund in which the Company has a limited partnership interest. The write-down was a result of a decline in the fair value of the investment primarily attributable to a deterioration in the financial condition and operating performance of certain of the underlying portfolio companies within the fund that was determined to be other than temporary. The Company will continue to regularly evaluate the carrying value of its investments.
Previous wording
During the three months ended April 30, 2025, the Company has declared a cash dividend of $0.35 per share for $7.8 million, payable on May 6, 2025. During the three months ended April 30, 2024, the Company declared and paid a cash dividend of $0.35 per share for $7.8 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.
Current wording
During the six months ended July 31, 2025, the Company declared and paid two separate cash dividends each at $0.35 per share aggregating to $15.6 million. During the six months ended July 31, 2024, the Company declared and paid two separate cash dividends each at $0.35 per share aggregating to $15.5 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 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 the three months ended April 30, 2025, the Company did not repurchase any shares of its common stock. During the three months ended April 30, 2024, the Company repurchased a total of 39,000 shares of its common stock under the November 23, 2021 share repurchase program at a total cost of $1.1 million, or an average of $27.85 per share. At April 30, 2025, $50.0 million remains available for purchase under the Company's December 5, 2024 repurchase program.
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 the six months ended July 31, 2025, the Company repurchased a total of 100,000 shares of its common stock under the December 5, 2024 share repurchase program at a total cost of $1.6 million, or an average of $15.94 per share. During the six months ended July 31, 2024, the Company repurchased a total of 39,000 shares of its common stock under the November 23, 2021 share repurchase program at a total cost of $1.1 million, or an average of $27.85 per share. At July 31, 2025, $48.4 million remains available for purchase under the Company's December 5, 2024 repurchase program.
Rearranged current paragraphs (13)
Current report — wording carried from elsewhere
Watch and Accessory Brands Operating Loss
Current report — wording carried from elsewhere
Net Sales: Comparative net sales by business segment were as follows (in thousands):
Current report — wording carried from elsewhere
Comparative net sales by categories were as follows (in thousands):
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 the six months ended July 31, 2025 was $158.9 million or 54.1% of net sales as compared to $158.2 million or 54.3% of net sales in the prior year period. The increase in gross profit of $0.7 million was due to higher net sales partially offset by a lower gross margin percentage. The decrease in the gross margin percentage of approximately 20 basis points for the six months ended July 31, 2025 reflected a negative impact of fluctuations in foreign exchange rates (approximately 100 basis points) and a negative impact due to increased U.S. tariffs (approximately 70 basis points), partially offset by a favorable sales mix (approximately 140 basis points) and the increased leveraging of certain fixed costs from higher sales of (approximately 10 basis points).
Current report — wording carried from elsewhere
Selling, General and Administrative (“SG&A”)
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
Interest expense was $0.2 million primarily due to the payment of unused commitment fees for both the six months ended July 31, 2025 and 2024. There were no borrowings under the Company's revolving credit facility during the six months ended July 31, 2025 and 2024.
Current report — wording carried from elsewhere
The effective tax rate was 37.2% and 33.5% for the six months ended July 31, 2025 and 2024, respectively. The significant components of the effective tax rate changed primarily due to changes in jurisdictional earnings mix resulting in a change in valuation allowances against certain foreign losses and a limitation on a portion of the foreign tax credits and deductions related to the tax on GILTI.
Current report — wording carried from elsewhere
Net Income Attributable to Movado Group, Inc.