Movado Group, Inc. Q2 FY2026 earnings call

• Sales grew 3% to $161.8M, adjusted operating profit more than doubled to $7M despite tariff impact. - Built strong inventory of Swiss-made watches in US, hopeful for tariff reduction with US and Switzerland potentially agreeing to lower rates. - Annualized savings of ~$10M from cost cuts. - Progress on Movado strategy despite 5.6% sales decline; licensed brands grew. - Strong balance sheet with over $180M cash, no debt. - New product introductions across brands, e.g., Movado's new icons and licensed brands' new collections.

Sales grew by 3% to $161.8 million. Adjusted operating profit more than doubled to $7 million from $2.6 million last year despite a $2.2 million tariff impact. Movado brand had a 5.6% sales decline. Licensed brands grew 6.5% on constant currency basis or 9.5% on reported basis. U.S. business declined by 1.6%; International business grew by 6.9% (3.9% constant currency), led by Europe, Latin America, and India; Middle East was rebuilding. Outlet storage grew 2.4% for the quarter. Gross margins were 54.1% vs 54.3% last year.

Given macroeconomic uncertainty and tariff impact, the company is not providing fiscal 2026 outlook.

• Tariff uncertainties: U.S. implemented 39% tariff on Swiss imports, actions to offset tariffs impact future periods. - Retail environment uncertainty: Ongoing uncertainty around tariffs and broader retail environment.

Q: What's behind the focus on mini watches?

A: Watches getting smaller again, bringing young women back, social media and layering with jewelry.

Q: Prime Day performance?

A: Strong digital business globally across brand portfolio.

Q: Inventory increase for Swiss watches?

A: Rebuilt inventory in Q1 and Q2, expect to work down by year-end, ~$16M in U.S.

Q: When will restructuring charges stop?

A: Restructuring charges predominantly done, some laggard expenses, expected to reduce significantly