Movado Group(MOV) - 2026 Q1 - Quarterly Report

Financial Performance - 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[113]. - The Watch and Accessory Brands segment net sales were $114.8 million, a decrease of$2.3 million or 2.0% compared to the prior year, primarily due to a $6.8 million or 17.0$6.2 million or 8.3%, partially offsetting the decline in owned brands[114]. - Net sales for the U.S. Watch and Accessory Brands segment were $38.6 million, a decrease of$0.5 million or 1.4% compared to the prior year, primarily due to an unfavorable sales mix[115]. - International net sales in the Watch and Accessory Brands segment were $76.2 million, down$1.8 million or 2.3%, impacted by foreign currency fluctuations of $1.2 million[116]. - Net income attributable to Movado Group, Inc. was$1.4 million for the three months ended April 30, 2025, compared to $2.0 million in the prior year[130]. Cost and Expenses - The Company recorded$4.6 million in accruals for severance and employee-related charges during fiscal year 2025 as part of a cost-savings initiative[107]. - The Company expects annual savings of approximately $10.0 million from the cost-savings initiatives implemented[107]. - Gross profit for the three months ended April 30, 2025, was$71.4 million, representing 54.1% of net sales, a decrease from 54.3% in the prior year[118]. - SG&A expenses increased by $0.3 million or 0.4$71.1 million, driven by a $2.7 million rise in foreign exchange losses[119]. - The Company recorded an operating loss of less than$0.1 million in the Watch and Accessory Brands segment, compared to an operating income of $1.7 million in the prior year[120]. - The U.S. locations of the Watch and Accessory Brands segment reported an operating loss of$7.0 million, an improvement from an $8.1 million loss in the prior year[121]. - International locations recorded operating income of$7.0 million, down from 9.8 million in the prior year, due to higher SG&A expenses[124]. Cash Flow and Investments - Cash used in operating activities was 7.2 million, an improvement from $18.1 million used in the prior year[133]. - The Company had$203.1 million in cash and cash equivalents as of April 30, 2025, down from $225.4 million in the prior year[131]. - The Company committed to invest up to$21.5 million in minority investments, having funded approximately $14.1 million through fiscal 2025 and an additional$1.3 million in the first three months of fiscal 2026[143]. - Cash paid for interest was $0.1 million for both the three-month periods ended April 30, 2025, and April 30, 2024[142]. Tariffs and Foreign Exchange - The U.S. government imposed a baseline special tariff of 10$1.2 million compared to the prior year period[113]. Shareholder Returns - The Company declared a cash dividend of $0.35 per share, totaling$7.8 million, for both the three-month periods ended April 30, 2025, and April 30, 2024[144]. - The Company expects to continue declaring cash dividends in the future, subject to the Board of Directors' discretion[144]. Debt and Financial Obligations - As of April 30, 2025, the Company had unsecured lines of credit totaling 6.5 million Swiss Francs, equivalent to $7.9 million, with no borrowings against these lines[140]. - The Company had no floating rate debt as of April 30, 2025, and reported no weighted average borrowings during the three months ended April 30, 2025[153]. - The Company has guaranteed obligations to third parties totaling$1.5 million as of April 30, 2025, related to its foreign subsidiaries[141]. Hedging and Future Contracts - As of April 30, 2025, the Company's net forward contracts hedging portfolio included 30.5 million U.S. dollars equivalent and 34.6 million Euros equivalent, with various expiry dates[151]. - The Company did not hold any future contracts in its gold hedge portfolio as of April 30, 2025, meaning changes in gold purchase prices will directly affect the cost of sales[152]. Share Repurchase - During the three months ended April 30, 2024, the Company repurchased 39,000 shares at a total cost of $1.1 million, averaging$27.85 per share[145].