Sales grew by 3% to $161.8 million and adjusted operating profit more than doubled to $7 million from $2.6 million last year despite a $2.2 million impact from unmitigated U.S. tariff expenses.
— Efraim Grinberg
03Detailed Report
MOV
Company MOV
Period
Q2 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 22, 2026
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Executive Summary
Movado Group reported a solid Q2 2026, with revenue of $161.8 million, up 3.1% year over year, and adjusted operating income of $7.0 million. The quarter demonstrated a return to growth in both sales and profitability, aided by strength in licensed brands and international markets, partially offset by tariff headwinds and a modest U.S. brand decline. Management highlighted a sharp push into digital channels, a broader marketing plan featuring high-profile icons, and continued product innovation across Movado and licensed brands. Despite tariff-related margin pressure, Movado maintained a strong balance sheet (cash >$180 million and no debt) and announced roughly $10 million of annualized savings from expense actions. Management did not provide full-year 2026 guidance due to tariff and macro retail uncertainty, but emphasized strategy execution and inventory readiness as key near-term levers.
Key takeaways for investors include: (1) licensing brands fueling growth (+9.5% reported; +6.5% in constant currency) and international strength (up 6.9% CC); (2) Movado brand momentum improving in wholesale and e-commerce, with notable success in women’s watches and the BOLD/Mini Quest lines; (3) tariff dynamics remain a key risk, with actionable pricing and inventory mitigation already in place; and (4) a robust capital position supporting buybacks and strategic investments as the company returns to sustainable profitability.
Key Performance Indicators
Revenue
Increasing
161.83M
QoQ: 22.81% | YoY: 1.58%
Gross Profit
Increasing
87.57M
54.11% margin
QoQ: 22.73% | YoY: 1.39%
Operating Income
Increasing
4.01M
QoQ: 1 276.98% | YoY: 32.24%
Net Income
Decreasing
2.99M
QoQ: 110.28% | YoY: -19.75%
EPS
Decreasing
0.13
QoQ: 116.67% | YoY: -23.53%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability:
- Q2 2026 net sales: $161.8 million, up 3.1% YoY; constant-currency growth approximately 1.4%.
- Gross margin: 54.1% (vs. 54.3% in Q2 2025), a 2 bps margin headwind from tariffs and FX.
- Operating income: $7.0 million; operating margin ≈ 4.3% for the quarter (7.0m / 161.8m).
- Net income: $2.99 million; net margin 1.84%; EPS $0.13.
Year-to-date (6 months ended 2025-07-31):
- Net sales: $293.6 million, up 0.8% YoY; constant dollars up 0.3%.
- Gross profit: $158.9 million; gross margin 54.1% (54.3% prior year).
- Operating income: $7.9 million; net income: $7.2 million; diluted EPS $0.32.
Geography and channel mix:
- U.S. net sales: down 1.6% YoY in Q2; international net sales up 6.9% (CC: up 3.9%).
- Licensed brands: +9.5% (reported), +6.5% CC. Movado brand revenue declined 5.6% in the quarter, offset by licensing growth and a rebound in wholesale/distribution.
- Outlet/online: outlet channel grew 2.4% in the quarter; Movado.com and digital partners showed solid momentum (6% growth on the company’s own site).
Balance sheet and liquidity:
- Cash and equivalents: ~$180.5 million; net debt: none.
- Inventory: up $28.3 million (15.5% YoY); approximately $16 million of the increase is US-inventory; $5.1 million FX impact; $4.6 million reciprocal tariffs embedded in on-hand inventory.
- Share repurchase: ~100,000 shares bought in Q2; remaining authorization ~$48.4 million.
Tariffs and pricing actions:
- Tariff headwinds persisted with a 39% tariff rate on Swiss imports noted; $2.2 million tariff impact in the quarter; pricing actions to offset tariffs began effective July 1, 2025.
Strategic initiatives and product highlights:
- Brand strategy focused on trend-right products; notable performance in Women’s watches and Movado BOLD/Verso/Quest lines; new campaigns featuring Ludacris, Jessica Alba, Julianne Moore, Christian McCaffrey, and Tyrese Haliburton; fall introductions include Museum Imperio and Heritage 1917.
- Licensed brands showing resilience and growth in a digital-driven environment (TikTok, Reels, YouTube).
Outlook:
- Management elected not to provide fiscal 2026 outlook due to tariff and macro retail uncertainty. Anticipated annualized savings of about $10 million from cost-reduction actions to be realized over the year. Inventory readiness and ongoing tariff mitigation efforts remain critical near-term considerations.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
161.83M
1.58%
22.81%
Gross Profit
87.57M
1.39%
22.73%
Operating Income
4.01M
32.24%
1 276.98%
Net Income
2.99M
-19.75%
110.28%
EPS
0.13
-23.53%
116.67%
Key Financial Ratios
Management Insights Available for Members
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