Sign in

You're signed outSign in or to get full access.

MG

MOVADO GROUP INC (MOV)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered modest top-line growth with net sales of $181.5M (+3.3% YoY; +5.0% constant currency) and gross margin expansion to 54.2%, but GAAP EPS fell to $0.36; adjusted EPS was $0.51 .
  • Full-year FY2025 net sales were $653.4M (-1.7% YoY), GAAP EPS $0.81 and adjusted EPS $1.12; operating income compressed sharply due to higher marketing and one-time items; cash ended at $208.5M, no debt .
  • Management withdrew FY2026 outlook given macro uncertainty and tariff risks; they plan $10M annualized cost savings and to cut marketing spend by $15–$20M to align with sales; selective price increases planned to mitigate tariff headwinds .
  • The Board declared a $0.35 quarterly dividend and retains a $50M buyback authorization; investigation-related restatement and governance remediation were addressed on the call .
  • Near-term catalysts: tariff trajectory and pricing actions, opex reductions vs gross margin preservation, brand refresh/innovation (women’s watches, lab-grown diamonds), and any clarity on FY2026 outlook .

What Went Well and What Went Wrong

  • What Went Well

    • International strength and margin improvement: Q4 net sales +8.8% internationally (+12.2% constant currency) and gross margin up to 54.2% on channel/product mix and leverage .
    • Strategic opex actions: $10M annualized savings implemented; planned $15–$20M cut in marketing for FY2026 to bring spend in line with sales .
    • Brand/product momentum: Women’s watches, licensed brands, and new introductions (lab-grown diamonds; Coach Sami bangle; Lacoste LC33; Hugo Boss Grand Prix) highlighted as growth drivers .

  • What Went Wrong

    • U.S. softness and outlet headwinds: Q4 U.S. net sales -2.9% YoY with declines in U.S. wholesale brick-and-mortar and Movado Company Stores .
    • Operating margin pressure: Q4 operating expenses rose to $89.1M (+$5.8M YoY) on higher marketing and investigation/cost-savings charges; GAAP operating income fell to $9.2M (adjusted $13.5M) .
    • Guidance withdrawal and tariff risk: No FY2026 outlook due to uncertainty; management flagged 10% incremental tariffs on global imports and over 100% on certain Chinese components, planning selective price increases to offset .

Financial Results

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$159.3 $182.7 $181.5
Gross Margin %54.2% 53.8% 54.2%
Operating Income (GAAP, $MM)$3.0 $9.3 $9.2
Operating Income (Adjusted, $MM)n/an/a$13.5
Net Income (GAAP, $MM)$3.7 $8.3 $8.1
Diluted EPS (GAAP, $)$0.16 $0.37 $0.36
Diluted EPS (Adjusted, $)n/an/a$0.51
Geography (YoY)Q2 2025Q3 2025Q4 2025
U.S. Net Sales YoY-0.3% -7.1% -2.9%
International Net Sales YoY-0.9% +0.4% +8.8% (+12.2% const. currency)
Actuals vs ConsensusQ2 2025Q3 2025Q4 2025
EPS Consensus Mean ($)0.19*0.32*0.388*
EPS Actual (GAAP, $)0.16 0.37 0.36
EPS OutcomeMissBold beatSlight miss
Revenue Consensus Mean ($MM)150.5*187.7*181.634*
Revenue Actual ($MM)159.3 182.7 181.5
Revenue OutcomeBold beatMissInline

Values retrieved from S&P Global.*

KPIs (FY2025 year-end)Value
Cash & Cash Equivalents ($MM)$208.5
Accounts Receivable ($MM)$93.4
Inventory ($MM)$156.7
Operating Cash Flow ($MM)$(1.5)
Dividend Declared (per share)$0.35
Shares Repurchased (FY2025)~120,000
Buyback Authorization Remaining$50.0M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FY2026 Outlook (Revenue/EPS)FY2026None providedNot providing outlook due to uncertaintyWithdrawn/Not provided
Marketing SpendFY2026Higher FY2025 baselineReduce by $15–$20M to align with salesLowered
Cost SavingsFY2026n/a$10M annualized savings implementedRaised efficiency
Tariff MitigationFY2026n/aSelective wholesale/retail price increasesNew mitigation
DividendQ1 FY2026 (paid May 6, 2025)Prior quarterly cadence$0.35 per shareMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025 and Q3 2025)Current Period (Q4 2025)Trend
Tariffs/MacroChallenging retail/watch category; cautious inventories; macro uncertainty in U.S./Europe Explicit tariff headwinds: 10% incremental on global imports; >100% on select Chinese components; no FY2026 outlook Risk rising; visibility reduced
Opex/Cost ActionsInvestment year; plan to align opex with sales; initial savings in Q3 $10M annualized savings; marketing down $15–$20M FY2026 Tightening spend
Marketing/BrandLarge campaign launch with new ambassadors; focus on digital & 360 media Shift to digital venues; conversion focus; preserve brand integrity; reduced promotions More targeted, conversion-led
Product PerformanceLicensed brands growth (Coach, Lacoste, CK, Hugo Boss); innovation pipeline Women’s watches strength; lab-grown diamonds; Coach Sami; Lacoste LC33; Hugo Boss Grand Prix Positive mix/innovation
Regional TrendsU.S. down; International slightly up; Europe softening U.S. -2.9% YoY; International +8.8% YoY (+12.2% CC) International accelerating
Outlet StoresDTC growth offset brick-and-mortar declines; outlet plan stable Outlet challenged; fixture upgrades rolled out to all stores Improvement initiatives underway
Governance/Restatementn/aDubai office investigation; restated prior periods; strengthening controls Remediation ongoing

Management Commentary

  • “We delivered net sales growth in the fourth quarter and also expanded gross profit margin while increasing marketing spend… [and] implemented actions that are expected to deliver $10 million in annualized savings.”
  • “We will bring our marketing spend to be more in line with sales in fiscal 2026, with planned spend being reduced by a range of $15 million to $20 million.”
  • “We intend to make every effort to protect our gross margin in the U.S. taking into account the current incremental tariff rate of 10% for all global imports and over 100% on the Chinese bracelet or leather straps…”
  • “We will be introducing our first set of Movado watches featuring lab-grown diamonds… below $2,000.”
  • On governance: “We restated our financials… Honesty and integrity and transparency are at the core… we will emerge… with an even more robust control environment.”

Q&A Highlights

  • Tariff and pricing strategy: Management emphasized selective price increases and maintaining value tiers (“good, better, best”) across brands to sustain demand under uncertainty .
  • Opex and FCF: Intent to generate free cash flow in FY2026 while flexing variable expenses (esp. digital marketing) and managing inventory levels .
  • Outlook stance: Reiterated it’s “better not to make predictions” amid tariff uncertainty; hope for more clarity by the first quarter call .

Estimates Context

  • Q4 FY2025 EPS of $0.36 vs consensus $0.388* was a slight miss; adjusted EPS of $0.51 exceeded GAAP consensus but consensus typically references GAAP results .
  • Q4 FY2025 revenue of $181.5M was essentially in line with consensus $181.634M* .
  • Prior quarters: Q3 EPS beat ($0.37 vs $0.32*), but revenue missed ($182.7M vs $187.7M*); Q2 EPS missed ($0.16 vs $0.19*), revenue beat ($159.3M vs $150.5M*) .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • International momentum and margin discipline offset U.S. softness; watch for durability of mix-led margin gains as opex is reduced .
  • Cost actions ($10M) and planned marketing cuts ($15–$20M) should support operating leverage in FY2026; monitor impact on brand equity and growth .
  • Tariff path is the principal swing factor; selective price increases and vendor/customer partnering are mitigation levers—track consumer elasticity .
  • Product/brand refresh (women’s, lab-grown diamonds, licensed brand hits) is a near-term growth vector; execution at wholesale and DTC remains critical .
  • Capital allocation remains shareholder-friendly (dividend $0.35, $50M buyback capacity) with strong cash and no debt; FCF generation is a focus .
  • Governance remediation post-restatement appears underway; continued control strengthening reduces risk premium over time .
  • Near-term trading set-up: sensitivity to tariff headlines and any reinstated outlook; positive surprise likely if U.S. sell-through stabilizes and international strength persists .