Movado Group(US:MOV)2025-11-25 15:02Financial Data and Key Metrics Changes - Revenue growth of 3.1% to $186.1 million for the third quarter, with a 5.9% increase excluding the Middle East [4][5] - Gross margin improved by 80 basis points to 54.3% compared to 53.5% last year, despite a $4.5 million impact from U.S. tariffs [5][15] - Adjusted operating income grew over 40% to $12.6 million, with positive operating cash flow of $1.3 million for the first nine months [5][17] - Net income for the third quarter was $10.2 million, or $0.45 per diluted share, compared to $8.5 million, or $0.37 per diluted share in the previous year [17] Business Line Data and Key Metrics Changes - Movado brand sales grew 17.7%, with overall sales in Movado company stores increasing by 9.4% on a comparable store basis [9] - Licensed brands saw a 6.4% growth overall, with a 2.9% increase on a constant currency basis [10] - Strong performance in specific collections such as Coach's Sammy Collection and Tommy Hilfiger's TH Oxford family [10][11] Market Data and Key Metrics Changes - U.S. net sales increased by 6.9%, while international net sales increased by 0.6%, with strong performances in Europe and Latin America [14][15] - The Middle East market showed softer results, but the company is working on rebuilding its strategy in that region [4][15] Company Strategy and Development Direction - Focus on building brands sustainably, driving innovation, and improving financial results [4][6] - Plans to return to growth in the Middle East next year and continue to invest in brand-building efforts while improving profitability [4][25] - Emphasis on capturing momentum from younger consumers embracing analog watches [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving dynamics in the fashion and accessible luxury watch categories, driven by innovation and interest from younger consumers [6][12] - The company is not providing a fiscal 2026 outlook due to current economic uncertainty and unpredictable tariff developments [20] Other Important Information - The company ended the quarter with $183.9 million in cash and no debt, and a quarterly dividend of $0.35 per share was approved [6][19] - Capital expenditures for the first nine months were $3.5 million, with approximately 100,000 shares repurchased under the share repurchase program [19] Q&A Session Summary Question: Is the success in sales due to influencers or design trends with Gen Z? - Management indicated it is a combination of both increased social media coverage and innovative designs resonating with younger consumers [22] Question: Does having sold-out conditions impair sales? - Management clarified that sold-out conditions are planned for select product families and that they expect to replenish styles soon [23] Question: Will the success in sales change spending levels for the fiscal year? - Management emphasized a balance between investing in brand-building and improving profitability [25]