Executive Summary

Q3 FY2025 revenue was $182.7M (-2.6% YoY; +14.7% QoQ) and GAAP EPS was $0.22; adjusted EPS was $0.37, reflecting higher marketing spend and a cost-savings charge; gross margin contracted 70 bps YoY to 53.8% .
Management tightened the FY2025 outlook to the low end previously communicated: revenue ≈$665M, operating income ≈$23M, EPS ≈$0.90, gross margin ~54%, tax rate ~25% vs prior guidance range of $665–$675M, $23–$26M, $0.90–$1.00, ~54%, ~25% .
Board authorized a new $50M buyback and declared a $0.35 dividend; cash ended at $181.5M with no debt, offering flexibility amidst a challenging category and tighter retailer inventory in the U.S. and Europe .
Key operational drivers: digital momentum (movado.com +16.9% in Q3; Sep/Oct >+25%), licensed brands +3.8% YoY, India +20%, while U.S. wholesale remained soft (U.S. -7.1% YoY; International +0.4%) .

What Went Well and What Went Wrong

What Went Well

Digital acceleration: “on our movado.com website, quarterly sales increased by 16.9% with both September and October sales growing by over 25%,” aided by a new brand campaign and product introductions .
Licensed brands growth: Licensed sales grew 3.8% YoY, led by Coach, Lacoste, Calvin Klein and Hugo Boss, with new collections (e.g., Bos(s)matic, LC 33) resonating with consumers .
Strong balance sheet and capital returns: Cash of $181.5M, no debt, new $50M buyback, and a $0.35 quarterly dividend, reinforcing shareholder return capacity in a difficult backdrop .

What Went Wrong

Retailer destocking and mix headwinds: U.S. retailer inventory management pressured shipments; U.S. net sales -7.1% YoY, gross margin -70 bps YoY on mix, fixed-cost deleverage, FX .
Elevated OpEx from growth investments: Operating expenses rose to $91.8M (adj. $89.1M) vs $81.6M LY, primarily on marketing and payroll, compressing operating income to $6.6M (adj. $9.3M) vs $20.7M LY .
Non-GAAP charges: $2.7M pre-tax provision for cost-savings initiative ($0.10 per share) and $1.1M after-tax repatriation-related tax ($0.05 per share) further weighed on GAAP EPS .

Financial Results

P&L Summary (oldest → newest)

Metric	Q1 FY2025	Q2 FY2025	Q3 FY2025
Revenue ($MM)	$136.7	$159.3	$182.7
YoY Growth (%)	-5.7%	-0.7%	-2.6%
Gross Margin (%)	55.3%	54.2%	53.8%
OpEx ($MM, GAAP)	$72.2	$83.3	$91.8
OpEx ($MM, Adjusted)	—	—	$89.1
Operating Income ($MM, GAAP)	$3.3	$3.0	$6.6
Operating Income ($MM, Adjusted)	—	—	$9.3
Other Income ($MM)	$2.2	$1.9	$1.5
Effective Tax Rate (GAAP)	42.9%	19.5%	31.5%
Effective Tax Rate (Adjusted)	—	—	18.4%
Diluted EPS (GAAP)	$0.13	$0.16	$0.22
Diluted EPS (Adjusted)	—	—	$0.37

YoY Comparison for Q3

Metric	Q3 FY2024	Q3 FY2025
Revenue ($MM)	$187.7	$182.7
Gross Margin (%)	54.5%	53.8%
Operating Income ($MM, GAAP)	$20.7	$6.6
Diluted EPS (GAAP)	$0.77	$0.22
Diluted EPS (Adjusted)	—	$0.37

Balance Sheet / Cash Flow KPIs

KPI	Q1 FY2025	Q2 FY2025	Q3 FY2025
Cash & Equivalents ($MM)	$225.4	$198.3	$181.5
Inventory ($MM)	$159.6	$176.4	$168.9
Net Debt	$0 (no debt)	$0 (no debt)	$0 (no debt)
9M CFO ($MM)	—	—	$(40.6)

Regional/Channel KPIs (Q3 FY2025)

KPI	Q3 FY2025
U.S. Net Sales YoY	-7.1%
International Net Sales YoY	+0.4%
Licensed Brands YoY	+3.8%
movado.com Sales Growth	+16.9% (Q3); Sep/Oct >+25%
India Growth	+20%

Non-GAAP adjustments (Q3): $2.7M pre-tax cost-savings initiative ($0.10 per share after-tax) and $1.1M after-tax repatriation-related tax ($0.05 per share) .

Guidance Changes

Metric	Period	Previous Guidance (Q2 FY25)	Current Guidance (Q3 FY25)	Change
Net Sales	FY2025	$665–$675M	≈$665M (low end)	Narrowed to low end
Gross Profit Margin	FY2025	~54%	~54%	Maintained
Operating Income	FY2025	$23–$26M (incl. ~$20M incremental brand investments)	≈$23M (incl. ~$18M incremental brand investments)	Narrowed to low end; slightly lower incremental spend assumption
Effective Tax Rate	FY2025	~25%	~25%	Maintained
Diluted EPS	FY2025	$0.90–$1.00	≈$0.90 (low end)	Narrowed to low end
Dividend	Quarterly	$0.35 declared (Sep payment)	$0.35 declared (Dec 30, 2024 payment)	Maintained
Share Repurchases	Authorization	$15.2M remained as of 10/31/24 on expiring plan	New $50M authorization through Dec 5, 2027	New program

Notes: FY2026 plans target “meaningful improvement in profitability,” including ~$6.5M annualized savings from the Q3 cost-savings initiative; further efficiency actions expected .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 FY2025)	Current Period (Q3 FY2025)	Trend
Marketing investment/brand-building	Q1: Planned to ramp marketing; new fall Movado campaign to drive awareness . Q2: Launched largest Movado Icons campaign; reiterated elevated marketing spend; cut FY outlook .	Continued elevated marketing; campaign positive feedback; efficient brand-building to be prioritized in FY2026 .	Investment staying elevated near-term; pivot to efficiency in FY2026.
Retailer inventory/demand	Q2: Category remains difficult; second-half expectations lowered .	Retailers tightly managing inventories in U.S./Europe; U.S. -7.1% YoY; international +0.4% .	Persistent headwind; watch for destocking abatement.
Digital/e-commerce	Q1: Movado.com double-digit growth; spring TV campaign . Q2: U.S. online retail up; wholesale/mall mix pressured .	movado.com +16.9% in Q3; Sep/Oct >+25%; Amazon Premier launch delayed then executed for holidays .	Strengthening digital channel momentum.
Licensed brands performance	Q1–Q2: Mixed; new product initiatives across portfolio .	Licensed up +3.8% YoY; brand-specific wins (Coach, Lacoste, CK, HUGO BOSS) .	Improving contribution from licensed brands.
Regional trends	Q1–Q2: International softness, esp. Europe; U.S. pressured .	U.S. -7.1%, International +0.4%; India +20% .	Europe weak; EMs (e.g., India) offsetting.
Cost actions/profitability	Q2: Indicated intent to reduce OpEx .	Cost-savings initiative in Q3; ~$6.5M annualized savings; FY2026 plan focused on profitability .	Accelerating cost discipline.

Management Commentary

CEO framing: “Our financial results were held back due to tighter inventory management by our retail partners in the U.S. and Europe and our planned increase in investment spend to support future growth…we have taken steps to align our expense base…reduce headcount…expected to generate approximately $6.5 million in annualized savings” .
Strategic priorities: “Our highest priority is to meaningfully improve profitability…fiscal 2026…efficient brand-building initiatives, key growth opportunities such as jewelry and emerging markets, and a more streamlined expense base” .
Liquidity and returns: “We…conclud[ed] the quarter with $181.5 million in cash and no debt…our Board…approved a new $50 million share repurchase plan” .
CFO lens: “Operating expenses were $89.1 million…increase was driven by increased investment in marketing and in payroll-related costs…operating income decreased to $9.3 million as compared to $20.7 million” (adjusted basis) .
Channel color: “Our shipments to retail and digital partners…were pressured by tighter inventory management…a delay in the launch of our Amazon Premier platform also pressured sales. This launch has now occurred…” .

Q&A Highlights

Buyback usage: Near-term focus is to offset dilution; scope could expand with higher cash generation .
Retail inventory positioning: Retailers in U.S./Europe “pretty…historically low” inventory; as conditions improve, retailers typically rebuild; e-commerce inherently carries lower inventory as % of sales .
Tone: Management “optimistic” longer term but focused on cost control to return to acceptable profitability next year .

Estimates Context

Wall Street consensus (S&P Global) for Q3 FY2025 EPS/Revenue was unavailable at the time of analysis due to data access limits; therefore, we are not presenting beat/miss vs consensus. We will update comparisons once S&P Global estimates are retrievable.

Key Takeaways for Investors

Near-term: Narrative centers on cost discipline and capital returns amid retailer destocking; the new $50M buyback and maintained $0.35 dividend support total return while fundamentals reset at the low end of guidance .
Mix and margin: Gross margin compression (-70 bps YoY) is tied to channel/product mix and deleverage; watch for higher-margin DTC (movado.com) growth to aid mix in 4Q and FY2026 .
Demand recovery signal: Monitor U.S./Europe restocking signals post-holidays and digital sell-through; management flagged historically low retailer inventories that could snap back as confidence returns .
Growth vectors: Licensed brands momentum (+3.8% YoY) and emerging markets (India +20%) provide offset to Europe softness; jewelry is a stated priority for FY2026 .
Execution watchlist: Delivery of ~$6.5M annualized cost savings, disciplined FY2026 marketing spend, and improved operating margins vs FY2025 baseline are the primary medium-term catalysts .
Holiday and Amazon: The Amazon Premier launch and early Black Friday momentum at company stores are near-term swing factors for 4Q .
Risk balance: Category headwinds and retailer inventory caution persist; strong cash, no debt, and buyback authorization mitigate downside and provide optionality .

Appendix: Additional Details and Disclosures

Q3 Non-GAAP reconciliation highlights: GAAP OpEx $91.8M; adj. $89.1M; GAAP operating income $6.6M; adj. $9.3M; GAAP EPS $0.22; adj. $0.37 (excludes $2.7M pre-tax cost-savings provision and $1.1M after-tax repatriation-related tax item) .
Cash deployment YTD: ~120k shares repurchased under prior plan through 10/31; new $50M authorization effective 12/5/24 through 12/5/27; quarterly dividend declared for 12/30/24 payment .
Other income: CFO indicated ~$(+)1.4M in non-operating income primarily from interest on cash; 8-K reported $1.5M (rounding/description difference) .

Sources: Company 8-K earnings press release and exhibits; Q3 FY2025 earnings call transcript; Q1–Q2 FY2025 earnings releases .

MOVADO GROUP INC (MOV)·Q3 2025 Earnings Summary