NYSE:MOV Movado Group Q1 2026 Earnings Report $16.22 -1.21 (-6.92%) Closing price 03:59 PM EasternExtended Trading$17.05 +0.84 (+5.15%) As of 07:14 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Movado Group EPS ResultsActual EPS$0.08Consensus EPS $0.39Beat/MissMissed by -$0.31One Year Ago EPSN/AMovado Group Revenue ResultsActual Revenue$131.77 millionExpected Revenue$142.11 millionBeat/MissMissed by -$10.34 millionYoY Revenue GrowthN/AMovado Group Announcement DetailsQuarterQ1 2026Date5/29/2025TimeBefore Market OpensConference Call DateThursday, May 29, 2025Conference Call Time9:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Movado Group Q1 2026 Earnings Call TranscriptProvided by QuartrMay 29, 2025 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Good day, everybody, and welcome to Movado First Quarter and Fiscal Year twenty twenty six Earnings Call. As a reminder, today's call is being recorded and may not be reproduced in full or in part without permission from the company. At this time, I would like to turn the conference over to Alison Mackin of ICR. Please go ahead. Speaker 100:00:20Everyone, with me on the call are Efraim Grinberg, Chairman and Chief Executive Officer and Sally DeMarcellus, Executive Vice President and Chief Operating Officer and Chief Financial Officer. Before we get started, I would like to remind you of the company's Safe Harbor language, which I'm sure you're all familiar with. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release. If any non GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure to this non GAAP financial measure will be provided as supplemental financial information in our press release. Speaker 100:01:23Now, I would like to turn the call over to Efraim Grinberg, Chairman and Chief Executive Officer of Movado Group. Speaker 200:01:31Thank you, Allison. Good morning, and welcome to Movado Group's first quarter earnings call. I am joined today by Sally DeMarcelles, our Executive Vice President and CFO. I will first review our first quarter results and our progress against our strategic initiatives. Sally will then review our financial results in greater detail. Speaker 200:01:55We would then be glad to take questions. We are pleased by our performance in the first quarter, especially as it involved navigating through an increasingly uncertain global economic environment. For the quarter, we delivered sales of $131,800,000 versus $134,400,000 last year, down 1.9% or 1% on a constant currency basis. Our adjusted operating income for the first quarter of fiscal twenty twenty six was $870,000 versus operating income of $2,100,000 last year. We made good progress on reducing our operating expenses through our cost savings initiatives, although some of the benefits were offset by unrealized losses due to significant currency fluctuations. Speaker 200:02:50Our adjusted earnings per share for the quarter were $08 down slightly from $09 last year on a lower tax rate. We ended the quarter with $2.00 $3,000,000 in cash and no debt. We are pleased that our Board approved a dividend of $0.35 per share for the first quarter. Despite an uncertain retail environment, we continue to execute on our strategic priorities, introducing product innovation and delivering compelling value for our consumers worldwide. For the first quarter, our U. Speaker 200:03:26S. Sales were down 1.6%, while international sales were down 2.2% or 0.7% on a constant currency basis. We continue to make meaningful progress on our Movado brand refresh, even as we navigate a challenged retail environment. We're particularly pleased with the recent introduction of our new Mini BANGL collections and the Bold Mini Quest, which have received a strong consumer response. These new styles opening at $750 and $595 respectively, are helping to elevate the brand positioning and broaden our reach. Speaker 200:04:07Additionally, the amplification of our partnership with Movado brand ambassador and NBA star Tyrese Halliburton, who is currently making a standout playoff run has further enhanced our visibility. We have been utilizing social media campaigns, leveraging both influencers and dynamic content across Instagram and TikTok to connect with our target consumers and strengthen engagement with more to come this year. In our licensed brands, we have seen particularly strong growth with sales improving by high single digits. Coach continues to connect with Gen Z and Millennials, particularly through our Sammy and Cass collections. Our Charter Chronograph collection is expanding the penetration of our men's offerings. Speaker 200:04:58In Hugo Boss, we continue to drive improving performance with the success of the Sky Traveler family for him and the Lucy collection for her, while continuing to grow our BOSS jewelry business. Lacoste continues to grow with the continued success of LC33, the Lacoste Boston family and our best selling Metropole bracelet from our jewelry collection. In Calvin Klein, we're focusing on driving our women's business with our iconic Pulse collection and the newly launched Meridian family, a new mini rectangular shaped watch. We're also seeing a strong response to our new elongated drop collection in CK Jewelry. In Tommy Hilfiger, we have seen success in our skeleton watch product families led by the Baker watch, while our Bang Chronograph, an iconic Tommy Hilfiger colors, is also performing well. Speaker 200:05:58And for women, we have seen a strong response to the new TS Square watch and will be expanding introductions throughout the year. In Olivia Burton, we have seen strong trends in The U. S. And The UK with consumers responding to our shape cases like our iconic Grosvenor now available in a mini execution and our Grove family. For the quarter, we saw an improved trend in our outlet division with sales only down 1.7% and that improvement has continued into the second quarter with trends improving throughout the month of May. Speaker 200:06:40As we progress through the current quarter and position ourselves for the second half, we are seeing some positive signs while continuing to navigate a retail and economic environment affected by tariff related uncertainties. At the current temporary U. S. Tariff rates, we believe we can partially mitigate the associated cost increases through available levers, including selective price increases. However, we recognize that the current tariff rates are subject to change based upon pending trade negotiations and legal challenges. Speaker 200:07:19Given the global uncertainty, we are focused on managing the controllables and operating with a high level of flexibility and agility, while staying focused on delivering innovation, quality and value for our consumers. Due to the macroeconomic and tariff related uncertainty, we're not providing outlook at this time. Still, we see resilience in the category with young consumers embracing trend forward watches and jewelry. Across our portfolio, we have seen strong momentum in women's watch collections and men's jewelry offerings, both of which are helping to drive engagement and growth. I would now like to turn the call over to Sally to walk you through the financials in greater detail. Speaker 200:08:05We would then be glad to answer any of the questions you might have. Speaker 300:08:09Thank you, Efraim, and good morning, everyone. For today's call, I will review our financial results for the first quarter of fiscal twenty twenty six. My comments today will focus on adjusted results. Please refer to the description of the special item included in our results for the first quarter of fiscal twenty twenty six in our press release issued earlier today, which also includes a reconciliation table of GAAP and non GAAP measures. Overall, we are pleased with our performance for the first quarter of fiscal twenty twenty six, although results continue to be negatively impacted by an uncertain economic environment. Speaker 300:08:45Despite net sales being down low single digits year over year, we continued to make good progress on our strategic initiatives and maintained an extremely strong balance sheet. Turning to a review of the quarter. Sales were $131,800,000 as compared to $134,400,000 last year, a decrease of 1.9%. In constant dollars, the decrease in sales was 1%. Net sales decreased across owned brands and, to a lesser extent, company stores, partially offset by an increase in licensed brands. Speaker 300:09:21By geography, U. S. Net sales decreased 1.6 as compared to the first quarter of last year. International net sales decreased 2.2%, and on a constant currency basis, international net sales decreased 0.7%. Gross profit as a percent of sales was 54.1% compared to 54.3 in the first quarter of last year. Speaker 300:09:45The year over year decrease in the gross margin rate was primarily driven by a negative impact fluctuations in foreign currency exchange rates, increased shipping costs and the deleverage of certain fixed costs over lower sales. This was mostly offset by favorable channel and product mix. Operating expenses were $70,500,000 as compared to $70,800,000 for the same period of last year. During the quarter, we made progress on our cost savings initiatives, such as reducing our investment and marketing expenditures and payroll related costs. These savings, however, were partially offset by unrealized currency losses resulting from highly volatile exchange rates towards the end of the quarter, impacting our outstanding intercompany balances and an increase in performance based compensation. Speaker 300:10:36Operating income decreased to $900,000 as compared to 2,100,000 in the first quarter of fiscal twenty twenty five. We recorded approximately $1,600,000 of other non operating income in the first quarter of fiscal twenty twenty six, which was primarily comprised of interest earned on our global cash position, as compared to $2,100,000 during the same period of last year. We recorded income tax expense of $800,000 in the first quarter of fiscal twenty twenty six, as compared to $2,000,000 in the first quarter of fiscal twenty twenty five. Net income in the first quarter was $1,900,000 or $08 per diluted share, as compared to $2,000,000 or $09 per diluted share in the year ago period. Now turning to our balance sheet. Speaker 300:11:27Cash at the end of the first quarter was $203,100,000 as compared to $225,400,000 at the same period of last year. Accounts receivable was $87,300,000 as compared to $81,000,000 for the same period of last year due to timing and mix of business. Inventory at the end of the quarter was up $24,100,000 from the same period of last year due to the timing of receipts. In the first three months of fiscal twenty twenty six, capital expenditures were 1,500,000 We did not repurchase shares under our $50,000,000 share repurchase program during the quarter. As a global company with over 40% of our net sales in The U. Speaker 300:12:13S, we continue to closely monitor the changing tariff landscape and evaluate various strategies to mitigate impending cost increases for U. S. Imports. Although we remain focused on maintaining the quality and value consumers expect, we will be implementing select price increases while actively engaging with our supply chain partners and customers to respond effectively. Given the current macroeconomic environment and the ongoing uncertainty of the impact of tariffs on our business, the company has elected to not provide fiscal twenty twenty six outlook at this time. Speaker 300:12:48I would now like to open the call up for questions. Operator00:13:02You may press 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question is from Hamed Khorsand with BWS Financial. Please proceed. Speaker 400:13:24Hi. Good morning. Just firstly, if we could just talk about the sales momentum. Could you just provide a little bit more insight as to the momentum you were talking about last quarter and the trends you're seeing now and how that isn't really showing up in the actual numbers you're reporting and what's driving that? Speaker 200:13:47Well, think we've been clear that the sales vary by market and by brand, and we're seeing pockets of growth and then pockets of more challenged marketplaces. So I think overall, given the uncertainty in the marketplace and the retail environment, I think we're satisfied right now with where our sales are, but we're focused on improving the trends over the balance of the year. And the uncertainties that have been injected into the marketplace over the last several months certainly have taken some toll on consumers, especially in The United States and Europe. Speaker 400:14:49I guess what I'm trying to get to is like you implemented this marketing strategy last year to increase sales momentum. It seemed like things were going great. Is tariffs that much of an impact on the consumer as far as your markets are concerned? Speaker 200:15:05Well, think that we never expected the journey that we implemented to be a short term strategy, but a longer term. And I think we're seeing a lot of interest from consumers in newness, in innovation, in smaller watches. We're seeing a renewed interest from younger consumers. So I think those are positive things. I think the challenges are that discretionary purchases are challenged and value still continues to be really important. Speaker 200:15:43So we are focused on delivering value for our consumers. And I would say that this journey that we're on from brand building perspective, that doesn't happen overnight. And what we are doing this year is rationalizing our expense infrastructure to deliver better financial performance over the year. Speaker 400:16:15And that was going to be my segue there. When will there be a lining up between earnings per share and the cash dividend? I mean, earnings are still lagging the dividend right now. Speaker 200:16:31I think the benefit that we have is that we obviously have a very strong balance sheet and a really strong cash position. We've built inventory over the quarter. I would expect that to come down by the end of the year, which produces more cash. We're also in very focused and always have been on delivering strong operating cash flow. I would think that as we go towards the second half of the year, we'll see improved operating cash flow and that should ultimately continue to strengthen our balance sheet. Speaker 200:17:13I think the more difficult part right now is that it's difficult to predict the current economic environment we saw last night, even that the current tariffs were ruled illegal by trade court, which is a federal court. So that in itself, although that's probably a positive from a business perspective, if it holds, creates even more uncertainty. Speaker 400:17:46Okay, and then lastly, you were talking about this unrealized loss in the foreign exchange. Will that be realized as a loss or will that eventually be neutralized in some way? Speaker 300:18:01Yes. So that resulted from a sharp decline really in the value of the U. S. Dollar at the end of the quarter due to headlines that hit really out of Washington. So it was unrealized. Speaker 300:18:17It will be we will make sure that we mitigate that risk going forward and take advantage of any other maybe offsetting increases in future quarters. So it will only be realized when paid basically. It's because we are such a multinational company and have currency situations and interactions between all of our entities around the globe. Speaker 400:18:42Okay. Thank you. Operator00:18:48That will conclude our question and answer session. I would like to turn the conference back over to Efraim for closing remarks. Speaker 200:18:56Thank you all for participating with us today and we look forward to talking with you after our second quarter. Thank you again. Operator00:19:07Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.Read morePowered by Key Takeaways Movado reported first-quarter sales of $131.8 million, down 1.9% year-over-year (-1.0% constant currency), with adjusted operating income falling to $0.9 million from $2.1 million and EPS of $0.08 versus $0.09 last year. The company ended the quarter with a strong balance sheet—$203.1 million in cash and no debt—and declared a quarterly dividend of $0.35 per share. Movado’s brand refresh gained traction with the launch of the Mini Bold and Bold Mini Quest collections and amplified visibility through NBA star ambassador Tyrese Halliburton, supported by targeted Instagram and TikTok campaigns. Licensed brands delivered high single-digit sales growth, led by Coach’s Sammy and Cass collections and strong performances in Hugo Boss, Lacoste, Calvin Klein, Tommy Hilfiger, and Olivia Burton. Persistent macroeconomic and tariff uncertainties prompted the company to implement selective price increases, maintain cost‐saving measures, and suspend issuing a fiscal 2026 outlook until trade negotiations clarify. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallMovado Group Q1 202600:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Movado Group Earnings HeadlinesMovado Group, Inc. (MOV) Q1 2026 Earnings Call TranscriptMay 29 at 1:20 PM | seekingalpha.comMovado Group (MOV) Projected to Post Quarterly Earnings on ThursdayMay 27 at 1:27 AM | americanbankingnews.comBanks aren’t ready for this altcoin—are you?While everyone's distracted by Bitcoin's moves, a stealth revolution is underway. One altcoin is quietly positioning itself to overthrow the entire banking system.May 29, 2025 | Crypto 101 Media (Ad)MOVAA Movado Group, Inc.May 23, 2025 | seekingalpha.comMovado Group, Inc. Announces Date of Conference Call and Webcast for First Quarter Fiscal Year 2026 ResultsMay 22, 2025 | businesswire.comINVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Movado Group, Inc. - MOVMay 18, 2025 | globenewswire.comSee More Movado Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Movado Group? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Movado Group and other key companies, straight to your email. Email Address About Movado GroupMovado Group (NYSE:MOV) designs, sources, markets, and distributes watches in the United States and internationally. The company operates in two segments, Watch and Accessory Brands, and Company Stores. The company offers its watches under the Movado, Concord, Ebel, Olivia Burton, and MVMT brands, as well as licensed brands comprising Coach, Tommy Hilfiger, HUGO BOSS, Lacoste, and Calvin Klein. It also designs, sources, markets, and distributes jewelry and other accessories; and provides after-sales and shipping services. The company's customers include jewelry store chains, department stores, independent regional jewelers, network of independent distributors, online marketplaces, licensors' retail stores, and third-party e-commerce retailers. It sells directly to consumers through its e-commerce platforms. The company was formerly known as North American Watch Corporation and changed its name to Movado Group, Inc. in 1996. Movado Group, Inc. was founded in 1961 and is headquartered in Paramus, New Jersey.View Movado Group ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles CrowdStrike Stock Slips: Analyst Downgrades Before Earnings Bullish NVIDIA Market Set to Surge 50% Ahead of Q1 EarningsAdvance Auto Parts: Did Earnings Defuse Tariff Concerns?Booz Allen Hamilton Earnings: 3 Bullish Signals for BAH StockAdvance Auto Parts Jumps on Surprise Earnings BeatAlibaba's Earnings Just Changed Everything for the StockCisco Stock Eyes New Highs in 2025 on AI, Earnings, Upgrades Upcoming Earnings CrowdStrike (6/3/2025)Haleon (6/4/2025)Broadcom (6/5/2025)Oracle (6/10/2025)Adobe (6/12/2025)Accenture (6/20/2025)FedEx (6/24/2025)Micron Technology (6/25/2025)Paychex (6/25/2025)NIKE (6/26/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 5 speakers on the call. Operator00:00:00Good day, everybody, and welcome to Movado First Quarter and Fiscal Year twenty twenty six Earnings Call. As a reminder, today's call is being recorded and may not be reproduced in full or in part without permission from the company. At this time, I would like to turn the conference over to Alison Mackin of ICR. Please go ahead. Speaker 100:00:20Everyone, with me on the call are Efraim Grinberg, Chairman and Chief Executive Officer and Sally DeMarcellus, Executive Vice President and Chief Operating Officer and Chief Financial Officer. Before we get started, I would like to remind you of the company's Safe Harbor language, which I'm sure you're all familiar with. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release. If any non GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure to this non GAAP financial measure will be provided as supplemental financial information in our press release. Speaker 100:01:23Now, I would like to turn the call over to Efraim Grinberg, Chairman and Chief Executive Officer of Movado Group. Speaker 200:01:31Thank you, Allison. Good morning, and welcome to Movado Group's first quarter earnings call. I am joined today by Sally DeMarcelles, our Executive Vice President and CFO. I will first review our first quarter results and our progress against our strategic initiatives. Sally will then review our financial results in greater detail. Speaker 200:01:55We would then be glad to take questions. We are pleased by our performance in the first quarter, especially as it involved navigating through an increasingly uncertain global economic environment. For the quarter, we delivered sales of $131,800,000 versus $134,400,000 last year, down 1.9% or 1% on a constant currency basis. Our adjusted operating income for the first quarter of fiscal twenty twenty six was $870,000 versus operating income of $2,100,000 last year. We made good progress on reducing our operating expenses through our cost savings initiatives, although some of the benefits were offset by unrealized losses due to significant currency fluctuations. Speaker 200:02:50Our adjusted earnings per share for the quarter were $08 down slightly from $09 last year on a lower tax rate. We ended the quarter with $2.00 $3,000,000 in cash and no debt. We are pleased that our Board approved a dividend of $0.35 per share for the first quarter. Despite an uncertain retail environment, we continue to execute on our strategic priorities, introducing product innovation and delivering compelling value for our consumers worldwide. For the first quarter, our U. Speaker 200:03:26S. Sales were down 1.6%, while international sales were down 2.2% or 0.7% on a constant currency basis. We continue to make meaningful progress on our Movado brand refresh, even as we navigate a challenged retail environment. We're particularly pleased with the recent introduction of our new Mini BANGL collections and the Bold Mini Quest, which have received a strong consumer response. These new styles opening at $750 and $595 respectively, are helping to elevate the brand positioning and broaden our reach. Speaker 200:04:07Additionally, the amplification of our partnership with Movado brand ambassador and NBA star Tyrese Halliburton, who is currently making a standout playoff run has further enhanced our visibility. We have been utilizing social media campaigns, leveraging both influencers and dynamic content across Instagram and TikTok to connect with our target consumers and strengthen engagement with more to come this year. In our licensed brands, we have seen particularly strong growth with sales improving by high single digits. Coach continues to connect with Gen Z and Millennials, particularly through our Sammy and Cass collections. Our Charter Chronograph collection is expanding the penetration of our men's offerings. Speaker 200:04:58In Hugo Boss, we continue to drive improving performance with the success of the Sky Traveler family for him and the Lucy collection for her, while continuing to grow our BOSS jewelry business. Lacoste continues to grow with the continued success of LC33, the Lacoste Boston family and our best selling Metropole bracelet from our jewelry collection. In Calvin Klein, we're focusing on driving our women's business with our iconic Pulse collection and the newly launched Meridian family, a new mini rectangular shaped watch. We're also seeing a strong response to our new elongated drop collection in CK Jewelry. In Tommy Hilfiger, we have seen success in our skeleton watch product families led by the Baker watch, while our Bang Chronograph, an iconic Tommy Hilfiger colors, is also performing well. Speaker 200:05:58And for women, we have seen a strong response to the new TS Square watch and will be expanding introductions throughout the year. In Olivia Burton, we have seen strong trends in The U. S. And The UK with consumers responding to our shape cases like our iconic Grosvenor now available in a mini execution and our Grove family. For the quarter, we saw an improved trend in our outlet division with sales only down 1.7% and that improvement has continued into the second quarter with trends improving throughout the month of May. Speaker 200:06:40As we progress through the current quarter and position ourselves for the second half, we are seeing some positive signs while continuing to navigate a retail and economic environment affected by tariff related uncertainties. At the current temporary U. S. Tariff rates, we believe we can partially mitigate the associated cost increases through available levers, including selective price increases. However, we recognize that the current tariff rates are subject to change based upon pending trade negotiations and legal challenges. Speaker 200:07:19Given the global uncertainty, we are focused on managing the controllables and operating with a high level of flexibility and agility, while staying focused on delivering innovation, quality and value for our consumers. Due to the macroeconomic and tariff related uncertainty, we're not providing outlook at this time. Still, we see resilience in the category with young consumers embracing trend forward watches and jewelry. Across our portfolio, we have seen strong momentum in women's watch collections and men's jewelry offerings, both of which are helping to drive engagement and growth. I would now like to turn the call over to Sally to walk you through the financials in greater detail. Speaker 200:08:05We would then be glad to answer any of the questions you might have. Speaker 300:08:09Thank you, Efraim, and good morning, everyone. For today's call, I will review our financial results for the first quarter of fiscal twenty twenty six. My comments today will focus on adjusted results. Please refer to the description of the special item included in our results for the first quarter of fiscal twenty twenty six in our press release issued earlier today, which also includes a reconciliation table of GAAP and non GAAP measures. Overall, we are pleased with our performance for the first quarter of fiscal twenty twenty six, although results continue to be negatively impacted by an uncertain economic environment. Speaker 300:08:45Despite net sales being down low single digits year over year, we continued to make good progress on our strategic initiatives and maintained an extremely strong balance sheet. Turning to a review of the quarter. Sales were $131,800,000 as compared to $134,400,000 last year, a decrease of 1.9%. In constant dollars, the decrease in sales was 1%. Net sales decreased across owned brands and, to a lesser extent, company stores, partially offset by an increase in licensed brands. Speaker 300:09:21By geography, U. S. Net sales decreased 1.6 as compared to the first quarter of last year. International net sales decreased 2.2%, and on a constant currency basis, international net sales decreased 0.7%. Gross profit as a percent of sales was 54.1% compared to 54.3 in the first quarter of last year. Speaker 300:09:45The year over year decrease in the gross margin rate was primarily driven by a negative impact fluctuations in foreign currency exchange rates, increased shipping costs and the deleverage of certain fixed costs over lower sales. This was mostly offset by favorable channel and product mix. Operating expenses were $70,500,000 as compared to $70,800,000 for the same period of last year. During the quarter, we made progress on our cost savings initiatives, such as reducing our investment and marketing expenditures and payroll related costs. These savings, however, were partially offset by unrealized currency losses resulting from highly volatile exchange rates towards the end of the quarter, impacting our outstanding intercompany balances and an increase in performance based compensation. Speaker 300:10:36Operating income decreased to $900,000 as compared to 2,100,000 in the first quarter of fiscal twenty twenty five. We recorded approximately $1,600,000 of other non operating income in the first quarter of fiscal twenty twenty six, which was primarily comprised of interest earned on our global cash position, as compared to $2,100,000 during the same period of last year. We recorded income tax expense of $800,000 in the first quarter of fiscal twenty twenty six, as compared to $2,000,000 in the first quarter of fiscal twenty twenty five. Net income in the first quarter was $1,900,000 or $08 per diluted share, as compared to $2,000,000 or $09 per diluted share in the year ago period. Now turning to our balance sheet. Speaker 300:11:27Cash at the end of the first quarter was $203,100,000 as compared to $225,400,000 at the same period of last year. Accounts receivable was $87,300,000 as compared to $81,000,000 for the same period of last year due to timing and mix of business. Inventory at the end of the quarter was up $24,100,000 from the same period of last year due to the timing of receipts. In the first three months of fiscal twenty twenty six, capital expenditures were 1,500,000 We did not repurchase shares under our $50,000,000 share repurchase program during the quarter. As a global company with over 40% of our net sales in The U. Speaker 300:12:13S, we continue to closely monitor the changing tariff landscape and evaluate various strategies to mitigate impending cost increases for U. S. Imports. Although we remain focused on maintaining the quality and value consumers expect, we will be implementing select price increases while actively engaging with our supply chain partners and customers to respond effectively. Given the current macroeconomic environment and the ongoing uncertainty of the impact of tariffs on our business, the company has elected to not provide fiscal twenty twenty six outlook at this time. Speaker 300:12:48I would now like to open the call up for questions. Operator00:13:02You may press 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question is from Hamed Khorsand with BWS Financial. Please proceed. Speaker 400:13:24Hi. Good morning. Just firstly, if we could just talk about the sales momentum. Could you just provide a little bit more insight as to the momentum you were talking about last quarter and the trends you're seeing now and how that isn't really showing up in the actual numbers you're reporting and what's driving that? Speaker 200:13:47Well, think we've been clear that the sales vary by market and by brand, and we're seeing pockets of growth and then pockets of more challenged marketplaces. So I think overall, given the uncertainty in the marketplace and the retail environment, I think we're satisfied right now with where our sales are, but we're focused on improving the trends over the balance of the year. And the uncertainties that have been injected into the marketplace over the last several months certainly have taken some toll on consumers, especially in The United States and Europe. Speaker 400:14:49I guess what I'm trying to get to is like you implemented this marketing strategy last year to increase sales momentum. It seemed like things were going great. Is tariffs that much of an impact on the consumer as far as your markets are concerned? Speaker 200:15:05Well, think that we never expected the journey that we implemented to be a short term strategy, but a longer term. And I think we're seeing a lot of interest from consumers in newness, in innovation, in smaller watches. We're seeing a renewed interest from younger consumers. So I think those are positive things. I think the challenges are that discretionary purchases are challenged and value still continues to be really important. Speaker 200:15:43So we are focused on delivering value for our consumers. And I would say that this journey that we're on from brand building perspective, that doesn't happen overnight. And what we are doing this year is rationalizing our expense infrastructure to deliver better financial performance over the year. Speaker 400:16:15And that was going to be my segue there. When will there be a lining up between earnings per share and the cash dividend? I mean, earnings are still lagging the dividend right now. Speaker 200:16:31I think the benefit that we have is that we obviously have a very strong balance sheet and a really strong cash position. We've built inventory over the quarter. I would expect that to come down by the end of the year, which produces more cash. We're also in very focused and always have been on delivering strong operating cash flow. I would think that as we go towards the second half of the year, we'll see improved operating cash flow and that should ultimately continue to strengthen our balance sheet. Speaker 200:17:13I think the more difficult part right now is that it's difficult to predict the current economic environment we saw last night, even that the current tariffs were ruled illegal by trade court, which is a federal court. So that in itself, although that's probably a positive from a business perspective, if it holds, creates even more uncertainty. Speaker 400:17:46Okay, and then lastly, you were talking about this unrealized loss in the foreign exchange. Will that be realized as a loss or will that eventually be neutralized in some way? Speaker 300:18:01Yes. So that resulted from a sharp decline really in the value of the U. S. Dollar at the end of the quarter due to headlines that hit really out of Washington. So it was unrealized. Speaker 300:18:17It will be we will make sure that we mitigate that risk going forward and take advantage of any other maybe offsetting increases in future quarters. So it will only be realized when paid basically. It's because we are such a multinational company and have currency situations and interactions between all of our entities around the globe. Speaker 400:18:42Okay. Thank you. Operator00:18:48That will conclude our question and answer session. I would like to turn the conference back over to Efraim for closing remarks. Speaker 200:18:56Thank you all for participating with us today and we look forward to talking with you after our second quarter. Thank you again. Operator00:19:07Thank you. This will conclude today's conference. 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