Executive Summary
Movado Group reported a modest year-over-year revenue decline in the first quarter of fiscal 2026, with revenue of $131.8 million, down 1.9% from the year-ago period (1% in constant currency). The quarter showcased a resilient gross margin of about 54.1% alongside aggressive cost-saving initiatives, yet the bottom line was dampened by currency volatility and a contemporaneous FX unwind, leading to a near-breakeven operating result and modest GAAP net income of $1.42 million. Management underscored ongoing brand and product initiatives, along with strong momentum in licensed brands, even as it retained a cautious stance due to tariff-related and macroeconomic uncertainties and elected not to provide full-year guidance.
Key positives include: (i) solid liquidity with approximately $203 million in cash and a net cash position (no net debt) versus a headcount of a smaller net cash outflow typical of a seasonal quarter; (ii) robust brand and product momentum, notably in the Movado brand refresh (Mini Bangle and Bold Mini Quest) and the expansion of licensed brands (Coach, Hugo Boss, Lacoste, Calvin Klein, Tommy Hilfiger, Olivia Burton); (iii) improving performance in the Outlet channel and cost controls that helped offset currency headwinds. The principal overhangs remain macroeconomic softness in discretionary categories, tariff volatility, and currency fluctuations that can impact intercompany balances and future periods' profitability. The company resumed its emphasis on value-oriented innovation and selective price actions to offset anticipated cost pressures while maintaining financial flexibility.
Investment thesis: Movado’s near-term earnings visibility is modest due to external headwinds, but the balance sheet strength, brand equity in both owned and licensed lines, and a clear product roadmap position it to benefit from a more favorable macro backdrop or tariff resolution. Investors should monitor tariff policy developments, FX hedging effectiveness, inventory dynamics, and the pace of operating-cash-flow recovery in the second half of fiscal 2026.
Key Performance Indicators
QoQ: -24.56% | YoY:-3.59%
QoQ: -23.17% | YoY:-5.51%
QoQ: -95.92% | YoY:-91.21%
QoQ: -78.81% | YoY:-50.88%
QoQ: -83.33% | YoY:-53.85%
Key Insights
Revenue: $131.769 million, down 1.9% year-over-year; in constant currency down 1% (YoY -3.59%, QoQ -24.56%).
Gross Profit: $71.35 million; gross margin 54.15% (vs 54.30% prior year; YoY -5.51%, QoQ -23.17%).
Operating Income: $0.291 million; operating margin 0.22% (YoY -91.21%, QoQ -95.92%).
Net Income: $1.42 million; net margin 1.08% (YoY -50.88%, QoQ -78.81%).
EPS (GAAP): $0.06 (diluted); Adjusted EPS (non-GAAP) cited by management: $0.08.
Geography: US sales down 1.6%; International down 2.2%...
Financial Highlights
Revenue: $131.769 million, down 1.9% year-over-year; in constant currency down 1% (YoY -3.59%, QoQ -24.56%).
Gross Profit: $71.35 million; gross margin 54.15% (vs 54.30% prior year; YoY -5.51%, QoQ -23.17%).
Operating Income: $0.291 million; operating margin 0.22% (YoY -91.21%, QoQ -95.92%).
Net Income: $1.42 million; net margin 1.08% (YoY -50.88%, QoQ -78.81%).
EPS (GAAP): $0.06 (diluted); Adjusted EPS (non-GAAP) cited by management: $0.08.
Geography: US sales down 1.6%; International down 2.2% (cc -0.7%).
Cash & Liquidity: End of quarter cash $203.1 million; total debt $92.3 million; net debt (net cash) is about -$110.8 million. No share repurchases were executed in the quarter.
Cash Flow: Net cash from operating activities: $(7.21) million; free cash flow: $(8.76) million; capex: $(1.55) million.
Balance Sheet: Total assets $747.18 million; total liabilities $251.78 million; total stockholders’ equity $493.23 million; inventory elevated by $24.1 million YoY; accounts receivable $87.35 million.
Dividend: Board approved a quarterly dividend of $0.35 per share.
Outlook: No full-year guidance due to macroeconomic and tariff-related uncertainty; management signaling potential selective price increases and continued focus on cost discipline and product innovation.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
131.77M |
-3.59% |
-24.56% |
| Gross Profit |
71.35M |
-5.51% |
-23.17% |
| Operating Income |
291.00K |
-91.21% |
-95.92% |
| Net Income |
1.42M |
-50.88% |
-78.81% |
| EPS |
0.06 |
-53.85% |
-83.33% |
Management Commentary
- Strategy and product cycle: Grinberg highlighted Movado’s brand refresh and product pipeline, including Mini Bangle (opening at $750) and Bold Mini Quest (opening at $595), noting strong consumer response and broader brand elevation. He also cited the Tyrese Haliburton partnership and social campaigns as catalysts for visibility and engagement. "We are pleased by our performance… especially as it involved navigating through an increasingly uncertain global economic environment. Our Movado brand refresh… has received a strong consumer response." (Efraim Grinberg)
- Licensed brands momentum and category strength: DeMarsilis noted licensing brands delivering growth in the high single digits, with Coach, Hugo Boss, Lacoste, Calvin Klein, Tommy Hilfiger, and Olivia Burton contributing, underscoring a diversified revenue base beyond the core Movado brand.
- Tariffs, FX, and outlook: Grinberg acknowledged tariff-related uncertainties and potential cost-offsetting levers, including selective price increases, while stressing ongoing macro uncertainty. DeMarsilis later stated that the company will not provide fiscal 2026 outlook "given the current macroeconomic environment and the ongoing uncertainty of the impact of tariffs on our business." (Sallie DeMarsilis)
- Operating discipline and liquidity: Grinberg emphasized cost-saving initiatives and flexibility to navigate volatile currency environments, while DeMarsilis noted unrealized currency losses toward quarter-end. Management reiterated a strong balance sheet with cash and no debt and highlighted the dividend as a signal of financial strength. "We ended the quarter with $203 million in cash and no debt" (Efraim Grinberg).
We delivered sales of $131.8 million versus $134.4 million last year, down 1.9%… We ended the quarter with $203 million in cash and no debt.
— Efraim Grinberg
Given the global uncertainty, we are not providing fiscal 2026 outlook at this time.
— Sallie DeMarsilis
Forward Guidance
- Near-term outlook: Management opted not to provide fiscal 2026 outlook due to tariff and macro uncertainties. Investors should expect a cautious stance until tariff dynamics stabilize and consumer spending trends clarify.
- Catalyst potential: The brand-refresh program and expanded licensed-brand distribution could drive mix improvements, especially if currency headwinds ease or if selective pricing actions offset incremental cost pressures.
- Key monitorables: trajectory of operating cash flow in H2 2026, inventory normalization (given a year-over-year inventory increase), FX hedging effectiveness, tariff policy developments (including any legal rulings or new negotiations), and the pace of demand in the US vs. international markets.
- Investment stance: Given Movado’s solid liquidity, debt-free status, and a diversified brand portfolio, the stock could offer upside from margin recovery and revenue mix shift, but the binary macro/tariff risk warrants a cautious stance until clearer guidance emerges and cash flow improves.