Movado Group(MOV) - 2026 Q1 - Quarterly Results

First Quarter Fiscal 2026 Financial Highlights Movado Group reported a slight decrease in Q1 FY2026 net sales, with reduced operating income and EPS, while maintaining a strong balance sheet and approving a quarterly dividend Q1 FY2026 Key Financial Metrics | Metric | Q1 FY2026 | Q1 FY2025 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $131.8 million | $134.4 million | -1.9% | | Operating Income | $0.3 million | $2.1 million | -86.2% | | Adjusted Operating Income | $0.9 million | N/A | N/A | | Diluted EPS | $0.06 | $0.09 | -33.3% | | Adjusted Diluted EPS | $0.08 | N/A | N/A | - The company ended the quarter with a strong liquidity position, holding $203.1 million in cash and no debt[4][5] - The Board of Directors approved a quarterly cash dividend of $0.35 per share[1][4][9] Management Commentary Management successfully navigated a challenging retail environment through cost-saving initiatives and product innovation, with strong performance from licensed brands and optimism for future opportunities despite market volatility - Successfully navigated a challenging retail environment by focusing on operational efficiency and cost-saving initiatives[4] - The licensed brand portfolio performed very well, indicating renewed vibrancy in the fashion watch category. The Movado brand also saw a strong response to new product introductions[4] - While anticipating continued market volatility, the company is optimistic about introducing compelling innovation across its brand portfolio[4] Detailed Financial Analysis This section provides a detailed analysis of the first quarter's financial results, including net sales, profitability, and non-GAAP adjustments Net Sales Net sales for Q1 FY2026 decreased by 1.9% to $131.8 million, primarily due to declines in owned brands, partially offset by growth in licensed brands Net Sales Performance (Q1 FY2026 vs Q1 FY2025) | Category | Value (Q1 FY26) | Change vs Q1 FY25 | Constant Dollar Change | | :--- | :--- | :--- | :--- | | Total Net Sales | $131.8 million | -1.9% | -1.0% | | U.S. Net Sales | N/A | -1.6% | N/A | | International Net Sales | N/A | -2.2% | -0.7% | - The overall decrease in net sales was attributed to declines in owned brands and Movado Company Stores, which was partially offset by an increase in licensed brands[8] Profitability Analysis Gross margin slightly decreased to 54.1%, while operating expenses increased to $71.1 million, leading to a sharp decline in operating income to $0.3 million and net income to $1.4 million - Gross margin decreased to 54.1% from 54.3%, primarily due to the negative impact of foreign exchange rates, increased shipping costs, and decreased leverage of fixed costs from lower sales[8] - Operating expenses increased to $71.1 million from $70.8 million, mainly due to higher foreign exchange losses and performance-based compensation, partially offset by lower payroll and marketing expenses[8] Profitability Comparison (Q1 FY2026 vs Q1 FY2025) | Metric | Q1 FY2026 | Q1 FY2025 (As Restated) | | :--- | :--- | :--- | | Gross Profit | $71.4 million | $72.9 million | | Operating Income | $0.3 million | $2.1 million | | Net Income Attributable to Movado | $1.4 million | $2.0 million | | Diluted EPS | $0.06 | $0.09 | Non-GAAP Adjustments The company reported adjusted non-GAAP figures, excluding a $0.6 million pre-tax charge related to a cost-savings initiative, resulting in an adjusted operating income of $0.9 million and adjusted diluted EPS of $0.08 - First quarter fiscal 2026 results included a pre-tax charge of $0.6 million, or $0.02 per diluted share, associated with a corporate cost-savings initiative[6] GAAP to Non-GAAP Reconciliation (Q1 FY2026, in thousands, except EPS) | Metric | As Reported (GAAP) | Adjustment | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Operating Income | $291 | $579 | $870 | | Net Income | $1,420 | $460 | $1,880 | | Diluted EPS | $0.06 | $0.02 | $0.08 | Capital Allocation The Board of Directors approved a quarterly cash dividend of $0.35 per share, with no share repurchases made during the quarter, leaving $50.0 million available under the program - The Board of Directors approved a cash dividend of $0.35 per share, payable on June 26, 2025, to shareholders of record as of June 12, 2025[9] - No shares were repurchased during the first quarter of fiscal 2026. As of April 30, 2025, $50.0 million remained available under the share repurchase program[10] Business Outlook Movado Group has elected not to provide a fiscal 2026 outlook due to economic uncertainty and unpredictable tariff impacts, but is planning actions to mitigate these effects - The company has chosen not to provide a fiscal 2026 outlook, citing economic uncertainty and unpredictable tariff impacts[11] - To mitigate the impact of recent tariff changes, the company is planning actions such as select price increases at wholesale and retail levels[11] Financial Statements This section presents the unaudited consolidated financial statements for the period ended April 30, 2025 Consolidated Statements of Operations For Q1 FY2026, Movado Group generated $131.8 million in net sales and $71.4 million in gross profit, with operating income at $0.3 million and net income at $1.4 million Consolidated Statements of Operations (in thousands) | Account | Three Months Ended April 30, 2025 | Three Months Ended April 30, 2024 (As Restated) | | :--- | :--- | :--- | | Net sales | $131,769 | $134,379 | | Gross profit | $71,350 | $72,920 | | Operating income | $291 | $2,118 | | Net income attributable to Movado Group, Inc. | $1,420 | $2,015 | Consolidated Balance Sheets As of April 30, 2025, the company reported total assets of $747.2 million, total liabilities of $253.8 million, and total shareholders' equity of $493.2 million, with $203.1 million in cash Key Balance Sheet Items (in thousands) | Account | April 30, 2025 | April 30, 2024 (As Restated) | | :--- | :--- | :--- | | Cash and cash equivalents | $203,086 | $225,372 | | Inventories | $189,298 | $165,170 | | Total current assets | $511,007 | $501,886 | | Total assets | $747,178 | $735,995 | | Total current liabilities | $125,555 | $103,370 | | Total equity | $495,400 | $491,856 | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities for Q1 FY2026 was $7.2 million, an improvement from the prior year, with the period ending with a cash balance of $203.1 million Statements of Cash Flows Summary (in thousands) | Cash Flow Activity | Three Months Ended April 30, 2025 | Three Months Ended April 30, 2024 (As Restated) | | :--- | :--- | :--- | | Net cash used in operating activities | ($7,214) | ($18,074) | | Net cash used in investing activities | ($2,837) | ($4,796) | | Net cash used in financing activities | ($467) | ($9,917) | | Net change in cash | ($5,341) | ($36,735) | | Cash at end of period | $203,873 | $226,079 |