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MG

MOVADO GROUP INC (MOV)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 was soft: net sales declined 1.9% to $131.8M, gross margin slipped 20bps to 54.1%, and GAAP EPS was $0.06 (adjusted $0.08), reflecting FX volatility, tariff uncertainty, and deleverage on lower sales .
  • Significant miss vs Street: revenue came in below the S&P Global consensus ($131.8M vs $142.1M*) and EPS missed materially ($0.06 vs $0.386*); licensed brands were a relative bright spot, while owned brands and outlet stores were weaker .
  • Guidance withheld: management reiterated no FY26 outlook given tariff/macro uncertainty; action plan includes selective price increases to mitigate tariff impacts; dividend maintained at $0.35/share and cash of $203.1M with no debt .
  • Near-term stock narrative hinges on: estimate miss, tariff/legal developments, FX losses (unrealized), and progress on cost-savings; management emphasized strong balance sheet and improving outlet trends into May .

What Went Well and What Went Wrong

  • What Went Well

    • Licensed brands delivered strong growth; momentum cited across Coach, Hugo Boss, Lacoste, Calvin Klein, and Tommy Hilfiger product families .
    • Movado brand refresh: new Mini Bangle and Mini Quest collections drew strong consumer response around Mother’s Day, amplified by ambassador activation (Tyrese Haliburton) and social media campaigns .
    • Balance sheet resilience: $203.1M cash, no debt; quarterly dividend of $0.35/share approved, repurchase authorization still available ($50M remaining) .

  • What Went Wrong

    • Topline and EPS miss: net sales down 1.9% YoY to $131.8M; GAAP EPS at $0.06, adjusted $0.08, pressured by FX losses and deleverage on lower sales .
    • Gross margin contracted to 54.1% (-20bps) on FX, higher shipping, and fixed-cost deleverage; owned brands and outlet stores declined YoY .
    • Outlook withheld again: uncertainty around tariffs and macro led to no FY26 guidance; FX volatility led to unrealized currency losses impacting intercompany balances .

Financial Results

MetricQ3 FY25Q4 FY25Q1 FY26
Net Sales ($USD Millions)$182.7 $181.5 $131.8
Gross Margin %53.8% 54.2% 54.1%
Operating Income ($USD Millions)$6.6 $9.2 $0.3
Adjusted Operating Income ($USD Millions)$9.3 $13.5 $0.9
Diluted EPS ($)$0.22 $0.36 $0.06
Adjusted Diluted EPS ($)$0.37 $0.51 $0.08

Estimates vs Actual (Q1 FY26):

MetricConsensus EstimateActual
Revenue ($USD Millions)$142.1*$131.8
Primary EPS ($)$0.386*$0.06

Values with asterisk (*) retrieved from S&P Global.

Geography/Channel KPIs (Q1 FY26):

KPIQ1 FY26
U.S. Net Sales YoY-1.6%
International Net Sales YoY-2.2% (-0.7% constant)
Outlet Division Sales YoY-1.7% (trend improved into May)

Balance Sheet and Cash Flow KPIs:

MetricQ3 FY25Q4 FY25Q1 FY26
Cash and Cash Equivalents ($USD Millions)$181.5 $208.5 $203.1
Inventories ($USD Millions)$168.9 $156.7 $189.3
Operating Expenses ($USD Millions)$91.8 $89.1 $71.1
Adjusted Operating Expenses ($USD Millions)$89.1 $84.8 $70.5
Net Cash from Operating Activities ($USD Millions)(40.6) (9M FY25) (1.5) (FY25) (7.2)

Non-GAAP/Adjustments (Q1 FY26):

  • Cost-savings initiative charge: $0.6M pre-tax ($0.5M after-tax; $0.02 per diluted share); adjusted EPS excludes this .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FY26 Outlook (Revenue/EPS/Margins)FY26Not provided (Q4 FY25) Not provided Maintained
Tariff Mitigation ActionsFY26Evaluating actions Implementing selective price increases (wholesale and retail) New/Initiated
DividendQ1 FY26$0.35/share (Q4 FY25 declared) $0.35/share (paid Jun 26, 2025; record Jun 12) Maintained
Share RepurchaseFY26New $50M program (Dec 5, 2024) $50.0M remaining available under Dec 5, 2024 program as of Apr 30, 2025 Available

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25)Previous Mentions (Q4 FY25)Current Period (Q1 FY26)Trend
Tariffs/MacroRetail partners tightening inventories; revised FY25 outlook lower-end; focus on profitability No FY26 outlook due to tariff uncertainty; planned price increases No FY26 outlook; tariff-related uncertainty; selective price increases planned Persistent uncertainty; mitigation actions underway
Cost Savings~$6.5M annualized savings targeted; headcount reduction $10M annualized savings implemented; FY26 marketing spend cut $15–$20M vs FY25 Continued opex rationalization; adjusted opex down; unrealized FX losses offset savings Cost actions continuing; FX noise
Product PerformanceBrand-building campaign; strong digital; licensed brands mixed Innovation across brands; marketing support Licensed brands strong; Movado Mini Bangle/Quest positive response; women’s watches/men’s jewelry momentum Improving consumer engagement in select categories
Regional TrendsU.S. down; International flat-to-slight up International growth; U.S. decline U.S. -1.6%; International -2.2% (constant -0.7%); outlet trends improved in May Mixed; early signs of outlet improvement
FX/Non-OpFX headwinds on GM; higher marketing spend FX impact noted Unrealized FX loss from late-quarter USD decline; other income ~$1.6M (interest) FX volatility elevated

Management Commentary

  • “We delivered sales of $131.8 million… Our adjusted operating income… was $870,000… adjusted EPS $0.08… We ended the quarter with $203 million in cash and no debt. We are pleased that our board approved a dividend of $0.35 per share.” — CEO Efraim Grinberg .
  • “We are optimistic… introduce compelling innovation… licensed brand portfolio performed very well… Movado brand received a strong response to new product introductions during the Mother’s Day holiday.” — CEO .
  • “Operating expenses were $70.5 million… savings partially offset by unrealized currency losses due to highly volatile exchange rates… Net income… $1.9 million or $0.08 per diluted share.” — CFO Sallie DeMarsilis .
  • “Given the current macroeconomic environment and ongoing uncertainty of the impact of tariffs… not providing fiscal 2026 outlook… we will be implementing select price increases.” — CFO .

Q&A Highlights

  • Sales Momentum and Tariffs: Management sees pockets of growth and challenges by market/brand; discretionary demand remains pressured; tariffs add uncertainty to consumer and retail environment .
  • Dividend vs EPS: PM question on dividend coverage; CEO highlighted strong cash position, inventory expected to come down by year-end, and focus on improved operating cash flow in 2H .
  • FX Losses: CFO clarified FX losses were unrealized, stemming from a sharp USD decline late in the quarter; will seek to mitigate risk and benefit from potential future offsets; realization only upon payment .
  • Tone: Cautiously optimistic on innovation and brand momentum; operational discipline and cost control emphasized; outlook withheld due to tariff/macro uncertainty .

Estimates Context

  • Street (S&P Global) had revenue at $142.1M* and EPS at $0.386* for Q1 FY26; MOV reported $131.8M and $0.06 GAAP ($0.08 adjusted), a meaningful miss on both lines .
  • With only one estimate on file for revenue and EPS, the miss likely drives downward revisions; EBITDA actual was $3.17M vs prior quarter stronger levels, reflecting deleverage and FX .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 miss and no FY26 outlook keep uncertainty high; watch for tariff/legal developments and pricing actions to offset cost pressures .
  • Licensed brands are a relative strength; Movado brand innovation gaining traction—track sell-through and outlet improvements into Q2 .
  • Cost discipline is real (lower adjusted opex), but FX volatility and fixed-cost deleverage can blunt progress; monitor FX hedging and opex cadence .
  • Balance sheet optionality remains a support (cash $203.1M, no debt); dividend sustained; repurchase capacity available ($50M) .
  • Near-term trading: estimate reset risk given miss; catalysts include tariff rulings, price increases, Q2 outlet trends, and evidence of margin recovery.
  • Medium-term thesis: brand portfolio strength + cost savings should drive profitability improvement once macro/tariff headwinds normalize; execution on pricing and marketing ROI is key .