Executive Summary
Movado Group completed a challenging Q3 FY2025, with consolidated revenue of $182.7 million, down 2.6% year over year, as US sales remained weak and international markets showed only modest improvement. Gross margin held at a resilient ~53.8%, but operating expenses rose, pressured by higher marketing and payroll investments as the company continued to fund brand-building initiatives. Management remains focused on returning to profitable growth through a mix of cost discipline, portfolio optimization, and selective investments in growth markets. The company also announced a new $50 million share repurchase program to enhance shareholder value while maintaining ample liquidity on a cash-rich balance sheet (cash ~$181.5 million with net debt of about -$83.3 million). For the full year, Movado guided toward roughly $665 million in net sales with a ~54% gross margin and ~$23 million of operating income, and $0.90 per share, signaling a path to modest profitability, with meaningful annualized cost savings (approx. $6.5 million) expected in fiscal 2026. The combination of India-led growth, licensing brand momentum, and a broad marketing campaign is designed to reposition Movado for a stronger 2026, though near-term headwinds remain from US/Europe retailer inventory discipline and the ongoing push to optimize the mix between owned brands, company stores, and licensed brands.
Key Performance Indicators
QoQ: 116.17% | YoY:-68.35%
QoQ: 35.72% | YoY:-70.96%
QoQ: 35.29% | YoY:-70.51%
Key Insights
Revenue: $182.7 million in Q3 2025 (YoY -2.6%; QoQ +14.7% in the nine-month framing). Gross margin: 53.8% in the quarter (vs. 54.5% prior year); Operating expenses: $89.1 million (up from $81.6m); Operating income: $6.6 million (GAAP) or $9.3 million per call narrative (note: reported GAAP figure in the data set is 6.55m; management commentary on the call referenced adjusted results and a higher near-term cost impact was noted); Net income: $5.05 million (GAAP) with EPS of $0.23 (diluted $0.22)....
Financial Highlights
Revenue: $182.7 million in Q3 2025 (YoY -2.6%; QoQ +14.7% in the nine-month framing). Gross margin: 53.8% in the quarter (vs. 54.5% prior year); Operating expenses: $89.1 million (up from $81.6m); Operating income: $6.6 million (GAAP) or $9.3 million per call narrative (note: reported GAAP figure in the data set is 6.55m; management commentary on the call referenced adjusted results and a higher near-term cost impact was noted); Net income: $5.05 million (GAAP) with EPS of $0.23 (diluted $0.22). Nine-month results (fiscal 2025 through Oct 31, 2024): Revenue $478.7 million (YoY -2.9%); Net income $14.9 million (EPS $0.66). Cash and equivalents: $181.5 million; Total debt: $98.3 million; Net debt: -$83.3 million; Shareholder returns: $50 million new buyback authorization. Guidance: full-year net sales about $665 million; gross margin ~54%; operating income ~ $23 million; diluted EPS ~$0.90. Management highlighted a disciplined cost-management trajectory and $6.5 million in annualized savings anticipated for fiscal 2026.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
182.73M |
-2.64% |
14.70% |
| Gross Profit |
98.40M |
-3.84% |
13.93% |
| Operating Income |
6.55M |
-68.35% |
116.17% |
| Net Income |
5.05M |
-70.96% |
35.72% |
| EPS |
0.23 |
-70.51% |
35.29% |
Key Financial Ratios
operatingProfitMargin
3.58%
operatingCashFlowPerShare
$-0.21
freeCashFlowPerShare
$-0.32
dividendPayoutRatio
153.9%
Management Commentary
Key management insights from the earnings call:
- Strategy and brand momentum: “Over the last year, we have made significant progress on our strategic initiatives, including the introduction of iconic new product families across our brand portfolio and revitalizing our marketing efforts and storytelling across our brands and regions.” This underscores a heavy investment in product and marketing to drive brand equity and long-term growth.
- Brand and channel investments: “While net sales are down 2.9% for the year-to-date period, we continue to believe that the investments we've made have strengthened our brands and provide a solid foundation for growth in the coming years.” The company is leaning into higher marketing outlays to rebuild demand.
- Near-term operational discipline: “our focus now is on a successful holiday season and building a strong business model for next year that will reduce costs, continue our brand-building initiatives while rationalizing marketing investments, delivering on key growth opportunities … and returning North America and our Movado brand to higher levels of profitability.”
- E-commerce and product momentum: Movado.com delivered 16.9% quarterly sales growth, with September and October up over 25%, and strong performance in Movado BOLD and Heritage from new introductions.
- Geographic and product mix dynamics: US net sales were down 7.1% while international sales were flat-to-up slightly (0.4%); India grew ~20%, signaling a meaningful growth vector outside traditional markets. Licensed brands (Coach, Lacoste, Calvin Klein, HUGO BOSS) drove 3.8% growth in the quarter.
- Inventory context and timing: Retailers continued to tightly manage inventories in the US and Europe; the company noted historically low retailer inventories but expects inventory replenishment to resume as demand improves.
- Buyback and capital allocation: The Board approved a new $50 million share repurchase plan; the company stated the buyback is currently offsetting dilution but could be redirected if cash generation strengthens.
- 2026 cost savings: The company signaled $6.5 million in annualized savings from cost-saving initiatives implemented in the quarter, underscoring a deliberate focus on profitability as revenue trends normalize.
“While net sales are down 2.9% for the year-to-date period, we continue to believe that the investments we've made have strengthened our brands and provide a solid foundation for growth in the coming years.”
— Efraim Grinberg
“Today, we also announced that our Board of Directors approved a new $50 million share repurchase plan.”
— Efraim Grinberg
Forward Guidance
Management guidance (as stated on the call) suggests a cautious but constructive path forward: target for fiscal 2025 net sales around $665 million with gross margin near 54% and operating income around $23 million, implying a modestly positive trajectory from current levels. Diluted earnings per share are guided toward about $0.90. The company also highlighted that the near-term results are being supported by cost-reduction initiatives which are expected to yield approximately $6.5 million in annualized savings in fiscal 2026, contributing to profitability improvements as revenue stabilization and brand investments mature.
Assessment: Achievability hinges on continued recovery in US and Europe retail demand, success of the new brand marketing narrative, and the effectiveness of the e-commerce and licensing engine (e.g., Coach, Lacoste, CK, HUGO BOSS) to drive higher sell-through. The India growth story and expansion in Southeast Asia are important optionality but depend on channel development and regional economic conditions. The company’s balance sheet (net cash position) provides ample flexibility to fund marketing initiatives, capex, and buybacks while pursuing cost reductions. Key catalysts include: (1) ramp in holiday season demand and Amazon platform momentum; (2) improved sell-through from the new merchandise campaigns; (3) the realization of the announced $6.5m annualized savings in 2026; (4) progress in DTC and international markets, particularly India.
Risks include: (1) persistent US/Europe retail inventory discipline weighing on wholesale shipments; (2) FX volatility impacting international sales and margins; (3) reliance on promotions and marketing to spur demand in a challenging macro environment; (4) execution risk around the integration and performance of licensed brands; (5) competition from other luxury/timepiece incumbents and fast-fashion entrants in the fashion watch space.