Movado Group NYSE: MOV reported higher first-quarter fiscal 2027 sales and profit, citing stronger demand in the U.S., improving trends in Europe, direct-to-consumer growth and retailer replenishment activity following a better-than-expected fourth quarter.
Chairman and Chief Executive Officer Efraim Grinberg said the watchmaker was “very pleased” with its start to the year, adding that first-quarter results showed “meaningful momentum across our business and continued consumer strength despite a dynamic external environment.”
Net sales rose 8.1% to $142.4 million from $131.8 million a year earlier. On a constant currency basis, sales increased 4.5%. Adjusted operating profit increased to $7.5 million from $900,000 in the prior-year quarter, while adjusted earnings per diluted share rose to $0.32 from $0.08.
Chief Financial Officer Sallie DeMarsilis said the quarter marked Movado’s fourth consecutive quarter of sequential improvements. She said growth came from the company’s owned brands, licensed brands and company stores, with “strong overall sales” more than offsetting weak performance in the Middle East due to the ongoing conflict.
U.S. Momentum and Direct-to-Consumer Growth Support Results
By geography, U.S. net sales increased 8.7% from the prior-year quarter. International net sales rose 7.6%, or 1.6% on a constant currency basis.
Grinberg said the Middle East was “extremely challenging” because of the ongoing conflict, and that excluding the region, growth would have been more significant. He pointed to continued U.S. strength, improving trends in Europe, currency tailwinds and robust growth in Movado’s direct-to-consumer business.
Movado.com sales increased 12.8%, while company stores posted a 10.2% sales increase. Grinberg said enhanced analytics and customer engagement tools are helping the company better understand consumer preferences and optimize assortments across channels.
In response to an analyst question, Grinberg said Movado’s direct channels, including movado.com, oliviaburton.com and retail stores, contributed to margin improvement. He also cited strength across digital partners globally, with the exception of the Middle East, and said improved Movado wholesale business helped margins as well.
Gross Margin Expands, Though Management Expects Moderation
Gross profit as a percentage of sales was 57.3%, up from 54.1% in the same quarter last year. DeMarsilis said the increase was primarily driven by favorable channel and product mix and increased leverage of certain costs over higher sales, partially offset by negative foreign exchange impacts.
She also said Movado experienced temporary favorability in gross margin during the quarter due to the elimination of IEEPA tariffs to the extent it had residual inventory in its U.S. warehouse. Regarding the potential recovery of $10 million of IEEPA tariffs previously paid, DeMarsilis said the company elected not to recognize a gain until a cash refund is received.
Asked how much of the margin expansion was structural versus one-time, Grinberg said the company expects to generate higher gross margin than last year for the balance of the year, but not at the first-quarter level. He said the company expects longer-term benefits from reducing SKU counts across brands and rationalizing suppliers.
Operating expenses rose to $74.1 million from $70.5 million, driven by higher marketing expenses and performance-based compensation. DeMarsilis said higher sales and gross margin dollars more than offset the expense increase.
Brand Updates Highlight Smaller Watches and New Designs
Grinberg said Movado is encouraged by a resurgence in the fashion watch category, particularly among younger consumers globally who are showing increased interest in traditional watches.
The Movado brand benefited from retailer replenishment and consumer response to products including the Bangles Collection, Museum Velura and the new Mini BOLD Evolution Tank. Grinberg said the Heritage 1917 collection for men and women continues to exceed expectations, while a new curved jewelry collection is performing well on movado.com.
Looking ahead to Father’s Day and the second quarter, he highlighted the new sporty BOLD Verso S Collection and vintage-inspired Kingmatic Collection, both of which he said are seeing strong early demand. He also said a limited drop of the 23 mm Baby Face watch in spring colors sold out quickly, validating consumer demand for smaller and distinctive sizes.
Licensed brand sales increased 6.5% in the quarter. Excluding the Middle East, licensed brand sales increased 9.2% on a constant currency basis. Grinberg cited momentum across Coach, Lacoste, HUGO BOSS, Tommy Hilfiger, Calvin Klein and Olivia Burton, with new shapes and sizes helping drive results across multiple markets and categories.
Asked about smaller case sizes and distinctive shapes, Grinberg said Movado has been focused on driving innovation for the past 18 months. He said it has been “really rewarding” to see younger consumers enter the traditional watch space, adding that the trend has been global and “portends well for the future of the watch category.”
Balance Sheet Remains Debt-Free; Dividend Raised
Movado ended the quarter with $225.3 million in cash, compared with $203.1 million a year earlier, and no debt. The company generated $7 million in operating cash flow during the quarter.
The board approved a $0.05 increase in the quarterly cash dividend to $0.40 per share. DeMarsilis said the decision reflected the company’s “strong cash flow generation and solid financial position.”
Accounts receivable declined to $80 million from $87.3 million, which DeMarsilis attributed to timing and business mix. Inventory decreased $7.3 million from the same period last year due to timing of receipts. Capital expenditures were $1.2 million in the first three months of fiscal 2027.
The company repurchased approximately 61,000 shares in the first quarter. As of April 30, 2026, it had $44.6 million of availability remaining under its Dec. 5, 2024 share repurchase program.
No Fiscal 2027 Outlook Amid Uncertainty
Movado did not provide a fiscal 2027 outlook, citing current economic and geopolitical uncertainty, including the unpredictable impact of the Middle East conflict.
Grinberg said sales growth is expected to moderate in the second quarter, particularly on a constant currency basis, following the strong replenishment activity in the first quarter. In the question-and-answer session, he said retailers needed to replenish more inventory after a fourth quarter that was better than both the company and retailers expected.
He added that the replenishment activity depleted Movado of certain inventory, particularly in the Movado brand, and that the company expects to address those shortages by summer. Grinberg said that should help Movado get on a more balanced schedule for the second half of the year and the holiday selling season.
“Our focus remains on controlling what we can control, investing behind our brands, deepening consumer engagement, improving operational efficiencies, and driving long-term profitability,” Grinberg said.
About Movado Group NYSE: MOV
Movado Group, Inc is a global designer, manufacturer and distributor of watches and related jewelry products. The company's portfolio encompasses both owned and licensed brands, offering a wide range of timepieces from luxury to accessible price points. Major owned brands include Movado, Concord, and Ebel, alongside newer acquisitions such as MVMT and Olivia Burton. In addition, Movado Group holds licensing agreements to produce watches under fashion names like Hugo Boss, Tommy Hilfiger, Coach, Lacoste and Scuderia Ferrari.
Movado Group's product line spans classic dress watches, sport and dive models, fashion-forward designs and limited-edition collections.
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