Movado Group(MOV) - 2025 Q1 - Quarterly Report

Net Sales Performance - Net sales for the three months ended April 30, 2024 were $136.7 million, a decrease of$8.2 million or 5.7% compared to the prior year period[87] - Net sales for the three months ended April 30, 2024 were $136.7 million, a decrease of$8.2 million or 5.7% compared to the prior year period[88] - Watch and Accessory Brands segment net sales decreased by $6.2 million or 4.9$119.4 million, primarily due to lower demand in wholesale customers[89] - Company Stores segment net sales decreased by $2.1 million or 10.7$17.3 million, primarily due to sales mix and lower online outlet store sales[93] - Owned brands category net sales decreased by $2.8 million or 8.7$0.2 million or 2.0%[91] Gross Profit and Operating Income - Gross profit for the three months ended April 30, 2024 was $75.5 million or 55.3$6.5 million from the prior year period[94] - Operating income in the Watch and Accessory Brands segment decreased to $2.9 million for the three months ended April 30, 2024 from$8.8 million in the prior year period[96] Expenses and Net Income - SG&A expenses increased by $1.1 million or 1.5$72.2 million, primarily due to higher payroll-related expenses[95] - Net income attributable to Movado Group, Inc. was $2.9 million, a decrease of$6.2 million compared to the prior year period[106] - The company recorded an income tax provision of $2.3 million, a decrease of$0.2 million compared to the prior year period[47] - The effective tax rate was 42.9% for the three months ended April 30, 2024, compared to 21.5% in the prior year period[105] Cash and Liquidity - Cash and cash equivalents totaled $225.4 million at April 30, 2024, with$155.5 million held at foreign subsidiaries[107] - Cash used in operating activities was $18.1 million for the three months ended April 30, 2024, compared to$21.5 million in the prior year period[110] - Cash used in investing activities was $4.8 million in Q2 fiscal 2024, primarily for$3.1 million in long-term investments and $1.6 million in capital expenditures[111] - Cash used in financing activities was$9.9 million in Q2 fiscal 2024, including $7.8 million in dividends paid and$1.1 million in stock repurchases[112] - The company's working capital increased to $410.3 million at April 30, 2024, from$409.4 million at April 30, 2023, primarily due to an increase in cash and trade receivables[108] Share Repurchases and Dividends - The company repurchased 37,859 shares of common stock during the three months ended April 30, 2024[57] - The company repurchased 39,000 shares at a total cost of $1.1 million in Q2 fiscal 2024, with$16.8 million remaining under its $50.0 million share repurchase program approved in November 2021[122] - The company paid cash dividends of$0.35 per share, totaling $7.8 million, in Q2 fiscal 2024, compared to$29.9 million in Q2 fiscal 2023, which included a special cash dividend of $1.00 per share[121] Credit Facilities and Investments - The Company has a$100.0 million senior secured revolving credit facility with a maturity date of October 28, 2026[113] - Availability under the credit facility was $99.7 million at April 30, 2024, reduced by$0.3 million in outstanding letters of credit[115] - The Company's Swiss subsidiary maintains unsecured lines of credit totaling 6.5 million Swiss Francs ($7.1 million) as of April 30, 2024[117] - Cash paid for interest, including unused commitment fees and amortization of debt fees, was$0.1 million for both the three months ended April 30, 2024 and 2023[118] - The company committed to invest up to $21.5 million in minority investments in growth companies and venture capital funds during fiscal 2022, with$8.4 million funded through fiscal 2024 and an additional $3.1 million in Q1 fiscal 2025[120] Compensation and Stock Awards - Compensation expense for stock awards was$1.5 million, an increase of $0.5 million compared to the prior year period[68] Foreign Currency and Hedging - The company manages foreign currency exchange risk through a hedging program, primarily using forward and option contracts, with significant exposure to Swiss Francs, Euros, British Pounds, Chinese Yuan, and Japanese Yen[125] - The company uses forward exchange contracts, not designated as qualified hedges, to offset exposure to foreign currency receivables and liabilities, with changes in fair value recognized in earnings[126] Retail Operations - The company operates 55 retail outlet locations as of April 30, 2024[93]