Executive Summary
Movado Group delivered a fourth quarter of fiscal 2025 with modest topline growth and margin expansion driven by favorable mix and operating leverage, ultimately posting a quarterly net income of $6.70 million and diluted EPS of $0.36 on revenue of $174.7 million (per company filings). Management highlighted ongoing brand-building initiatives, a disciplined approach to cost control, and a shift toward higher-ROI digital marketing, while also acknowledging near-term tariff and macroeconomic uncertainty that precludes providing a formal 2026 outlook. The company ended the year with a strong balance sheet: $208.5 million in cash and no debt, and a free cash flow generation of $37.5 million, underscoring financial flexibility even as it faces external headwinds.
Strategic highlights include a broad brand refresh across the Movado umbrella and major licensed brands (Coach, Tommy Hilfiger, Lacoste, Hugo Boss, Calvin Klein, and others), a push into lab-grown diamonds under $2,000, expanded penetration of automatic and women’s watches, and an upgrade of in-store point-of-sale with Movado fixtures. Management signaled targeted annual cost savings of about $10 million in fiscal 2026 and a $15–$20 million reduction in marketing expenditure year-over-year, offset by inflationary pressures and selective price increases. Tariff developments and global trade dynamics remain the primary external risk, with management opting not to provide fiscal 2026 outlook until more clarity emerges. This combination of cash generation, guardrails on expenses, and brand-driven growth initiatives positions Movado for potential mid-to-high-single-digit margin stabilization should tariffs and consumer demand stabilize over the next 12–18 months.
Overall, Movado’s quarterly and full-year results reflect a modest recovery in the fourth quarter, continued investments in brand equity, and a prudent stance on capital allocation, all of which are critical for investors evaluating the downside risk from tariff volatility against the upside potential of a diversified, licensed-brand portfolio and a leaner cost base.
Key Performance Indicators
QoQ: 32.71% | YoY:-44.82%
QoQ: 56.52% | YoY:-34.55%
Key Insights
Revenue (Q4 2025): $174.669 million; Gross Profit: $92.866 million; Gross Margin: 53.17%; Operating Income: $7.124 million; EBITDA: $11.030 million; Net Income: $6.702 million; Diluted EPS: $0.36; Weighted Avg Diluted Shares: 22.534 million.
Full-year 2025: Revenue $653.4 million; Gross Profit $353.1 million; Gross Margin 54.0%; Operating Income $27.1 million; Net Income $25.4 million; Diluted EPS $1.12; Cash and cash equivalents $208.5 million; Net debt: negative net debt (cash position) due t...
Financial Highlights
Revenue (Q4 2025): $174.669 million; Gross Profit: $92.866 million; Gross Margin: 53.17%; Operating Income: $7.124 million; EBITDA: $11.030 million; Net Income: $6.702 million; Diluted EPS: $0.36; Weighted Avg Diluted Shares: 22.534 million.
Full-year 2025: Revenue $653.4 million; Gross Profit $353.1 million; Gross Margin 54.0%; Operating Income $27.1 million; Net Income $25.4 million; Diluted EPS $1.12; Cash and cash equivalents $208.5 million; Net debt: negative net debt (cash position) due to zero debt.
Key YoY/QoQ notes (full-year unless noted): Revenue YoY -2.76%; Revenue QoQ -4.41%; Gross Profit YoY -4.04%; Gross Margin YoY 0.0x; Operating Income YoY -47.10%; Net Income YoY -44.82%; EPS YoY -34.55%; Q4 YoY growth in sales reported at 3.3% (per earnings call); Q4 gross margin improved to 54.2% (vs 53.5% prior year).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
174.67M |
-2.76% |
-4.41% |
| Gross Profit |
92.87M |
-4.04% |
-5.62% |
| Operating Income |
7.12M |
-47.10% |
8.76% |
| Net Income |
6.70M |
-44.82% |
32.71% |
| EPS |
0.36 |
-34.55% |
56.52% |
Key Financial Ratios
operatingProfitMargin
4.08%
operatingCashFlowPerShare
$1.77
freeCashFlowPerShare
$1.69
dividendPayoutRatio
115.6%
Management Commentary
Key management insights drawn from the earnings call:
- Governance and restatement: Efraim Grinberg disclosed irregularities at the Dubai sales office, noting that Movado restated financials for the three fiscal years ended January 31, 2024, and interim periods within fiscal 2025 and 2024, emphasizing a strengthened control environment going forward.
- Cost discipline and savings: Management highlighted planned structural changes that are expected to deliver $10 million in annualized savings for fiscal 2026, alongside a $15–$20 million year-over-year reduction in marketing expenditures, partially offset by inflationary costs.
- Market strategy and brand positioning: Grinberg outlined ongoing brand refreshes and product introductions, including lab-grown diamond watches under $2,000 and a broader “good, better, best” pricing approach across licensed and owned brands. Digital marketing emphasis was stated as a means to improve efficiency and conversion.
- Tariffs and visibility: Both executives underscored tariff uncertainty as a constraint on the outlook, with plans to mitigate cost increases via vendor partnerships and selective price increases; no formal fiscal 2026 outlook was issued due to the lack of clarity on tariff levels.
- Operational cadence and outlets: The company discussed improvements in point-of-sale fixtures and outlet assortments, and the expectation that better execution would translate into improved results in the second half of the year.
- Financial positioning: The leadership highlighted a strong balance sheet: $208.5 million cash, no debt, and ongoing share repurchases with capital-return commitments (dividends and buybacks), suggesting substantial financial flexibility to navigate the uncertain environment.
During the close of our financial results, irregularities were identified in our Dubai sales office; we immediately suspended leadership, engaged outside counsel, and restated our financials for the three fiscal years ended January 31, 2024, and the interim periods within fiscal years 2025 and 2024.
— Efraim Grinberg
In the fourth quarter, sales were $181.5 million, up 3.3% year over year, and gross margin improved to 54.2% as a result of favorable mix and leverage of fixed costs; we will focus our marketing more in digital channels and drive efficiency through brand messaging with retail partners.
— Sallie DeMarsilis
Forward Guidance
Outlook assessment: Management did not issue a formal fiscal 2026 outlook due to tariff and macro uncertainty. They signaled the following anchors for the next 12–18 months:
- Cost management and margin resilience: Expectation of $10 million annualized savings and $15–$20 million in marketing reductions, to be balanced with inflation-related compensation increases. The objective is to protect gross margin in the US amidst tariff headwinds and to sustain operating margins in the low-to-mid single digits as brand investments continue.
- Pricing strategy: Implementation of selective price increases aligned with a “good, better, best” pricing framework across brands to maintain value for consumers while offsetting tariff-driven costs.
- Brand-led growth: Continued investments in brand-refresh initiatives and product introductions (e.g., Movado’s new BOLD Mini Quest, mini bangles, lab-grown diamond watches) to drive mix and premiumization across both owned and licensed brands.
- Financial leverage and cash generation: Maintain a robust cash position and zero debt, with a goal of generating free cash flow to support dividends and potential buybacks, while monitoring working capital and inventory efficiency.
- Key risk monitors: Tariff policy developments, currency fluctuations (FX impact on international sales), and consumer discretionary trends, particularly in regions with higher exposure to US tariff changes. Investors should watch management commentary on the timing and impact of tariff changes, any realizable price adjustments, and the pace of brand-led demand in international markets.