Movado Group(US:MOV)2025-11-25 14:32Financial Performance - Net sales for the three months ended October 31, 2025, were $186.1 million, representing a $5.6 million or 3.1% increase from the prior year period[129]. - The Watch and Accessory Brands segment net sales for the same period were $162.7 million, an increase of $3.1 million or 1.9% compared to the prior year[130]. - In the licensed brands category, net sales increased by $7.0 million or 6.4%, while owned brands category net sales decreased by $4.3 million or 8.5%[130]. - U.S. net sales in the Watch and Accessory Brands segment were $54.2 million, up $2.6 million or 5.0% from the prior year[131]. - Net sales for the three months ended October 31, 2025, in the International locations of the Watch and Accessory Brands segment were $108.5 million, a 0.4% increase from the prior year, with a $3.4 million positive impact from foreign currency exchange rates[132]. - Net sales for the Company Stores segment for the three months ended October 31, 2025, were $23.4 million, representing a 12.2% increase from the prior year, driven by higher foot traffic and online sales[133]. - For the nine months ended October 31, 2025, net sales were $479.7 million, a 1.7% increase from the prior year, with foreign currency fluctuations positively impacting sales by $4.8 million[149]. - The Watch and Accessory Brands segment net sales for the nine months ended October 31, 2025, were $413.2 million, a 1.2% increase, with licensed brands up by $21.2 million, or 7.9%[150]. Profitability - Gross profit for the three months ended October 31, 2025, was $101.1 million, or 54.3% of net sales, an increase from 53.5% in the prior year, attributed to a favorable sales mix and reduced costs[134]. - Operating income for the Watch and Accessory Brands segment for the three months ended October 31, 2025, was $9.2 million, an increase of $4.4 million from the prior year, driven by higher gross profit and lower SG&A expenses[136]. - The Company recorded a net income attributable to Movado Group, Inc. of $9.6 million for the three months ended October 31, 2025, compared to $4.8 million in the prior year[146]. - Gross profit for the nine months ended October 31, 2025, was $260.0 million, or 54.2% of net sales, reflecting a slight increase in gross margin percentage from the prior year[154]. - Operating income in the Watch and Accessory Brands segment for the nine months ended October 31, 2025, was $9.0 million, an increase of $3.6 million from $5.4 million in the prior year, driven by a gross profit increase of $3.3 million[157]. - The Company recorded net income attributable to Movado Group, Inc. of $14.0 million for the nine months ended October 31, 2025, compared to $10.3 million in the prior year, reflecting an increase of $3.7 million[168]. Expenses and Cost Management - SG&A expenses for the three months ended October 31, 2025, were $89.3 million, a decrease of 1.4% from the prior year, primarily due to lower marketing and payroll expenses[135]. - SG&A expenses for the nine months ended October 31, 2025, were $243.9 million, a decrease of $0.1 million or 0.0% from the prior year, primarily due to lower marketing expenses of $8.2 million and a decrease in payroll-related expenses of $6.8 million[156]. - 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[124]. - The Company expects annual savings of approximately $10.0 million from the cost-savings initiatives[124]. Taxation - The effective tax rate for the three months ended October 31, 2025, was 25.3%, down from 31.9% in the prior year, influenced by changes in foreign currency gains and jurisdictional earnings[145]. - The effective tax rate was 29.5% for the nine months ended October 31, 2025, down from 32.8% in the prior year, influenced by changes in foreign valuation allowances and jurisdictional earnings[167]. Cash Flow and Investments - Cash and cash equivalents as of October 31, 2025, were $183.9 million, an increase from $181.5 million in the prior year, with $94.7 million held at foreign subsidiaries[169]. - Net cash provided by operating activities was $1.3 million for the nine months ended October 31, 2025, a significant improvement of approximately $41.9 million compared to net cash used of $40.6 million in the prior year[171]. - Cash used in investing activities was $6.3 million for the nine months ended October 31, 2025, a decrease from $11.9 million in the prior year, primarily due to capital expenditures related to Company stores[174]. - Cash used in financing activities was $25.4 million for the nine months ended October 31, 2025, compared to $27.0 million in the prior year, including $23.3 million in dividends paid[175]. - The Company declared and paid cash dividends of $23.3 million during the nine months ended October 31, 2025, consistent with the previous year[185]. - A share repurchase program authorized the Company to buy back up to $50.0 million of its common stock, with $48.4 million remaining available as of October 31, 2025[186]. Foreign Currency and Tariffs - Fluctuations in foreign currency exchange rates positively impacted net sales by $3.4 million for the three months ended October 31, 2025[129]. - The Company anticipates that tariffs will have a material impact on its U.S. operations despite mitigation efforts[123]. - The Company has implemented selective price increases in response to incremental tariffs, which include a 20% tariff on U.S. imports of China-origin goods[120][123]. - The Company manages foreign currency exchange risk through a hedging program, primarily involving the Swiss Franc, Euro, and British Pound[189]. - The Company did not hold any futures contracts in its gold hedge portfolio as of October 31, 2025, meaning changes in gold purchase prices will directly affect its cost of sales[194]. Other Financial Information - The One Big Beautiful Bill Act signed into law on July 4, 2025, is not expected to have a material impact on the Company's Consolidated Financial Statements[125]. - The Company recorded a non-cash impairment charge of $0.4 million related to a venture capital fund investment due to a decline in fair value[184]. - As of October 31, 2025, the Company's net forward contracts hedging portfolio included 28.0 million Swiss Francs and 37.4 million U.S. dollars equivalent, with a potential loss of $0.2 million if settled[193]. - The Company had no floating rate debt as of October 31, 2025, and reported no weighted average borrowings during the nine months ended October 31, 2025[195]. - The Company does not hedge interest rate risks and considers its exposure to commodity price fluctuations primarily related to gold used in manufacturing[194]. - The Company will continue to evaluate the carrying value of its investments regularly[184].