MOVADO GROUP INC Q1 FY2026 earnings call

• First quarter sales were $131.8M vs $134.4M last year, down 1.9% (1% constant currency). Adjusted operating income $870k vs $2.1M last year. - Made progress on cost savings initiatives but offset by unrealized currency losses. - Board approved $0.35 per share dividend. - Movado brand refresh ongoing, new collections like Mini Bangle and Bold Mini Quest doing well, partnership with Tyrese Haliburton enhanced visibility, social media campaigns used. - Licensed brands: Coach Gen Z/millennial collections doing well, Hugo Boss Sky Traveler/Lucy collections successful, Lacoste LS33/Boston family/growth in jewelry, Calvin Klein Pulse/Meridian families doing well, Tommy Hilfiger Skeleton/Bank Chronograph/TIA Square watch successful, Olivia Burton shape cases popular. - Balance sheet: $203M cash, no debt, inventory up due to timing of receipts, capital expenditures $1.5M.

For the first quarter, Movado Group delivered sales of $131.8 million versus $134.4 million last year, down 1.9% or 1% on a constant currency basis. Adjusted operating income was $870,000 versus $2.1 million last year. Movado brand: Made progress on refresh, new Mini Bangle and Bold Mini Quest collections received strong response. Licensed brands: Coach saw high single-digit growth, Hugo Boss drove improving performance, Lacoste continued growth, Calvin Klein focused on women's business, Tommy Hilfiger had success in certain watch families, Olivia Burton had strong trends in US and UK. Outlet division: Sales only down 1.7% in Q1 with trends improving into Q2.

• Due to macroeconomic and tariff related uncertainty, the company has elected to not provide fiscal 2026 outlook at this time. Still sees resilience in category with young consumers embracing trend forward watches and jewelry.

• Uncertain global economic environment. - Tariff related uncertainties with current tariff rates subject to change based on trade negotiations and legal challenges, potentially affecting cost increases.

Q: Could you provide more insights to the sales momentum talked about last quarter and why it isn't showing in actual numbers, and what's driving that?

A: Sales vary by market and brand, with pockets of growth and challenged marketplaces. Uncertainty in marketplace and retail environment has taken toll on consumers, especially in US and Europe.

Q: Is tariffs a big impact on consumers in your markets?

A: Discretionary purchases are challenged and value is important. The brand building journey is longer term, and rationalizing expense infrastructure to improve financial performance.

Q: When will there be a lining up between earnings per share and the cash dividend?

A: Strong balance sheet and cash position. Inventory expected to come down by end of year producing more cash. Difficult to predict current economic environment, and recent tariff court ruling creates more uncertainty.

Q: Will the unrealized loss in foreign exchange be realized or neutralized?

A: Resulted from sharp decline in US Dollar value at end of quarter due to headlines. Will mitigate risk going forward and take advantage of offsetting increases in future quarters; will only be realized when paid as it's from multinational currency situations.