Movado Group Reports $131.8 Million in Net Sales, Faces Decline and Investigation Impact

Movado Group, Inc. reported a net sales figure of $131.8 million for the three months ended April 30, 2025, reflecting a decrease of $2.6 million, or 1.9%, compared to the same period in the previous year. The decline was attributed to unfavorable sales mix and fluctuations in foreign currency exchange rates, which negatively impacted sales by approximately $1.2 million. The company's gross profit for the quarter was $71.4 million, representing 54.1% of net sales, down from $72.9 million, or 54.3%, in the prior year. This decrease was primarily due to lower net sales and a slight reduction in gross margin percentage.

In terms of operational performance, the Watch and Accessory Brands segment generated $114.8 million in net sales, a decrease of $2.3 million, or 2.0%, year-over-year. The owned brands category saw a significant decline of $6.8 million, or 17.0%, while the licensed brands category experienced an increase of $6.2 million, or 8.3%. The Company Stores segment reported net sales of $17.0 million, down $0.3 million, or 1.7%, from the previous year, primarily due to an unfavorable sales mix, although the number of retail outlet locations increased from 55 to 56.

Movado's financial results were impacted by a recent investigation into misconduct at its Dubai branch, which led to a restatement of previously issued financial statements for fiscal years 2023 and 2024. The investigation revealed that certain employees had overstated sales and mismanaged sales discounts, necessitating adjustments to the company's financial records. As a result, the company recorded a net income attributable to Movado Group, Inc. of $1.4 million for the quarter, down from $2.0 million in the prior year.

The company has also initiated a cost-savings initiative aimed at reducing operating expenses through headcount reductions, which is expected to yield annual savings of approximately $10 million. During the first quarter of fiscal 2026, Movado recorded $0.6 million in severance and employee-related charges as part of this initiative. Additionally, the company declared a cash dividend of $0.35 per share, totaling $7.8 million, payable on May 6, 2025.

Looking ahead, Movado Group, Inc. is focused on navigating the challenging consumer spending environment while addressing the impacts of recent tariff changes and currency fluctuations. The company is also working to enhance its internal controls following the investigation and is committed to improving its operational efficiency and financial performance in the upcoming quarters.