Movado Group Reports Decline in Q3 and Nine-Month Financial Performance for Fiscal 2025

Movado Group, Inc. reported a decline in financial performance for the third quarter and first nine months of fiscal 2025, as detailed in its recent 10-Q filing. For the three months ended October 31, 2024, the company recorded net sales of $182.7 million, a decrease of $5.0 million or 2.6% compared to $187.7 million in the same period last year. The decline was attributed to lower demand from wholesale customers, particularly in the United States, despite a positive impact from foreign currency fluctuations. Gross profit for the quarter was $98.4 million, representing 53.8% of net sales, down from 54.5% in the prior year, reflecting a combination of lower sales and a less favorable sales mix.

For the nine months ended October 31, 2024, Movado's net sales totaled $478.7 million, down 2.9% from $493.0 million in the previous year. The Watch and Accessory Brands segment saw a decrease in sales, primarily due to unfavorable sales mix and decreased volumes, particularly in the owned brands category. Operating income for the nine-month period was $12.9 million, significantly lower than $41.2 million reported in the same period last year, driven by increased selling, general, and administrative (SG&A) expenses, which rose by 6.5% to $247.4 million.

In response to the challenging consumer environment, Movado initiated a cost-savings initiative during the third quarter, resulting in $2.7 million in severance and payroll-related charges. The company anticipates annual savings of approximately $6.5 million from these measures. Additionally, Movado's SG&A expenses increased due to higher marketing costs and payroll expenses, including those related to the cost-savings initiative. The company also repurchased 120,000 shares of its common stock for $2.6 million during the nine months ended October 31, 2024.

Geographically, Movado's international operations accounted for 33.6% of total net sales in the third quarter, with slight growth in international sales offsetting declines in the U.S. segment. The company operated 56 retail outlet locations as of October 31, 2024, up from 55 a year earlier. The filing also noted that Movado's cash and cash equivalents decreased to $181.5 million from $201.0 million year-over-year, reflecting cash used in operating activities and increased investments in inventories.

Looking ahead, Movado Group, Inc. remains cautious about the economic environment, including inflation and consumer spending trends. The company continues to evaluate its strategies to adapt to market conditions while focusing on maintaining operational efficiency and profitability.