0001193125-26-115298
SEC filingMovado's fiscal 2026 revenue grew 2.7% to $671.3M, driven by licensed brands and Company Stores, with gross margin expanding 20 bps to 54.2%.
Movado Group is a global watch and accessories company that designs, sources, markets, and distributes quality watches under a portfolio of owned and licensed brands. The company also designs and sells jewelry and other accessories. Its owned brands include Movado, Concord, Ebel, Olivia Burton, and MVMT; licensed brands include Coach, Tommy Hilfiger, Hugo Boss, Lacoste, Calvin Klein, and Kate Spade New York (with the latter expected to launch watches in spring 2027). The company operates in two segments: Watch and Accessory Brands and Company Stores.
The Watch and Accessory Brands segment encompasses the design, manufacturing, and distribution of watches, jewelry, and other accessories, along with after-sales service and shipping revenue. The Company Stores segment operates 53 retail outlet locations in the United States, 4 in Canada, and an online outlet store. No revenue split between segments is provided in the Business section.
The company's primary products are watches across five price categories: exclusive (not competed in), luxury (Concord, Ebel), accessible luxury (Movado), moderate and fashion (Coach, Hugo Boss, Lacoste, Olivia Burton, MVMT, Tommy Hilfiger, Calvin Klein, Kate Spade New York), and mass market (not competed in). It also designs and sells fashion jewelry, which accounted for 10.2% of net sales in fiscal 2026, and other accessories like sunglasses.
The company sells through multiple channels: department stores (e.g., Macy's, Nordstrom), jewelry chains (e.g., Signet Jewelers, Helzberg Diamonds), independent jewelers, third-party e-commerce retailers (e.g., Amazon), and directly to consumers via owned e-commerce sites (e.g., movado.com, mvmt.com, oliviaburton.com). Internationally, it operates sales offices in 14 countries and uses independent distributors, with most arrangements being long-term and including minimum purchase requirements.
The watch and jewelry markets are highly competitive. Swatch Group is named as the only company that competes across all of Movado's brands. Numerous other competitors are listed for specific categories, including Rolex, Breitling, Cartier, Omega, TAG Heuer, Gucci, Rado, Michele, Raymond Weil, Anne Klein, Bulova, Citizen, Fossil, Guess, Seiko, Michael Kors, Daniel Wellington, Swatch, Apple, Huawei, and Samsung.
The company's strategy includes expanding digital marketing and online reach through social media, influencer partnerships, and retail media networks; maintaining brand-specific messaging via an in-house marketing department; pursuing long-term licensing agreements with powerful brands; emphasizing selective licensing and product design; and using a flexible manufacturing model with independent manufacturers in Switzerland and Asia to adapt to demand shifts.
As of January 31, 2026, the company employed 1,386 individuals globally: 991 full-time, 363 part-time, and 32 temporary. The workforce is distributed across the Americas (921), Asia-Pacific (193), and Europe, Middle East & Africa (272). Approximately 37% of non-retail employees have over 10 years of tenure, and 59% have at least 5 years, indicating strong retention.
Movado Group reported net sales of $671.3 million for fiscal 2026, a 2.7% increase from $653.4 million in fiscal 2025. Foreign currency translation positively impacted sales by $11.6 million; excluding this effect, organic growth was 1.0%. Gross profit rose to $363.6 million (54.2% of sales) from $353.1 million (54.0% of sales), a 20-basis-point margin expansion. The improvement was driven by favorable sales mix (+180 bps) and cost leverage (+40 bps), partially offset by $9.6 million in IEEPA tariffs (-150 bps), negative FX (-40 bps), and higher shipping costs (-10 bps).
SG&A expenses increased modestly by $0.6 million to $333.8 million, despite a $14.1 million reduction in marketing spend, as performance-based compensation rose $12.0 million and foreign exchange losses increased $3.6 million. Operating income improved to $29.8 million (4.4% of sales) from $20.0 million (3.1% of sales). Net income attributable to Movado Group was $26.6 million, up from $18.4 million, reflecting higher operating income and a lower effective tax rate (21.8% vs. 27.9%).
Watch and Accessory Brands segment sales grew 2.1% to $568.3 million. Licensed brands surged 7.2% to $391.4 million, driven by strength in Coach, Tommy Hilfiger, and Hugo Boss, while owned brands declined 6.1% to $172.5 million, with weakness across Movado, Concord, and EBEL. U.S. Watch and Accessory Brands sales rose 3.6% to $193.2 million, but the segment recorded an operating loss of $44.0 million due to $37.7 million in unallocated corporate expenses and tariff-driven margin compression. International Watch and Accessory Brands sales increased 1.4% to $375.1 million, with operating income of $59.0 million benefiting from favorable FX and mix.
Company Stores segment delivered strong performance, with sales up 6.2% to $103.0 million and operating income rising to $14.8 million (14.4% margin) from $12.3 million. Growth was driven by higher foot traffic, a new store opening (total 57 locations), and increased online outlet sales.
Management highlighted several forward-looking items. The cost-savings initiative, which incurred $1.5 million in severance charges in fiscal 2026, is expected to generate approximately $10.0 million in annual savings going forward. Capital expenditures for fiscal 2027 are projected at $9.0 million, up from $4.5 million, focused on shop-in-shops, IT, and facilities. The Company faces ongoing tariff uncertainty, with $12.7 million in IEEPA tariffs incurred in fiscal 2026 ($9.6 million in cost of sales, $3.1 million capitalized). The Supreme Court ruled IEEPA tariffs unlawful, but refunds remain uncertain. The Company has not recognized a receivable for potential refunds. The One Big Beautiful Bill Act (July 2025) did not have a material impact on fiscal 2026 results. The Company maintains a strong liquidity position with $230.5 million in cash and $99.7 million available under its $100 million revolving credit facility, with no borrowings outstanding.
As of January 31, 2026, Movado Group had no debt outstanding under its $100.0 million senior secured revolving credit facility, with $99.7 million in available liquidity (after $0.3 million in letters of credit). Inventory totaled $158.3 million, comprising $128.2 million in finished goods, $27.1 million in component parts, and $3.0 million in work-in-process. Cash and equivalents are not disclosed in the Notes section.
Movado disclosed significant contractual commitments aggregating $366.2 million. The largest component is $269.6 million in minimum commitments under license, endorsement, and service agreements, payable over the next six years. Additionally, the company has $92.6 million in outstanding purchase obligations with suppliers for raw materials, finished watches, jewelry, and packaging in the normal course of business. Furthermore, Movado has $4.0 million in remaining capital commitments to venture capital funds, which may be called over a period generally ending ten years after the first capital call.
Movado's capital allocation activities are focused on share repurchases. In December 2024, the Board approved a new $50.0 million share repurchase program through December 5, 2027. During fiscal 2026, the company repurchased 208,000 shares at an average price of $18.75, totaling $3.9 million. As of January 31, 2026, $46.1 million remained available for repurchases. Dividends are not discussed in the Notes. There were no borrowings or repayments under the credit facility during the year. Capital expenditures were not disclosed in the Notes section.
The Notes do not contain a separate segment reporting footnote. The only reference to segments is in Note 3 (Cost Savings Initiative), which notes that severance and employee-related charges were recorded in both U.S. and International locations within the Watch and Accessory segment. No further segment-level revenue or operating income data is provided in the Notes.
Movado's risk factors highlight significant exposure to adverse economic conditions, geopolitical instability, and foreign currency fluctuations. Over 80% of product volume originates from Asia (mostly China), and 56.7% of revenue is international. The Middle East conflict poses a direct threat to a key market, with potential disruptions to distribution, supply chains, and consumer demand. Currency risk is managed via hedging, but unhedged exposures to the Swiss Franc, Euro, British Pound, Chinese Yuan, and Japanese Yen could impact results.
U.S. tariffs under Section 301 (25% on packaging, 7.5% on watch bands/jewelry) and Section 122 (10% ad valorem, potentially rising to 15%) increase costs. The Supreme Court ruling invalidating prior IEEPA-based tariffs creates uncertainty over refunds. Retaliatory measures from China or other countries could further disrupt supply chains and demand. The company also faces evolving ESG regulations, anti-corruption laws, and privacy/data protection laws across jurisdictions.
Movado relies on independent manufacturers, single-source mechanical movements, and third-party suppliers. Disruptions could delay deliveries, especially during the peak holiday season. The company's wholesale business is affected by the shift to online shopping and retail consolidation. E-commerce growth introduces risks related to system failures, cybersecurity, and privacy compliance. A material weakness in internal controls was remediated, but SEC inquiries and potential penalties persist.
Intense competition from smart watches and wearables, many from larger companies, threatens the traditional watch market. Licensed brands account for 58.3% of net sales; loss of any license could materially impact revenue. Failure to maintain brand recognition or adapt to fashion trends could reduce sales.
The Grinberg family controls majority voting power, potentially delaying or preventing a change of control. The company's stock price could fluctuate due to changes in revenue, operating results, and cash flows. Seasonal sales patterns (56.3% in second half) amplify the impact of holiday-season disruptions.
Movado's operating cash flow of $14.5 million in FY2026 was significantly below net income of $27.8 million, indicating weak cash conversion. The primary driver was a $30.5 million working capital outflow, largely from increased accounts receivable and inventory. This contrasts with FY2025, where CFO of $68.9 million exceeded net income of $33.7 million, supported by working capital inflows.
Capital expenditures were modest at $5.3 million (1.4% of revenue), down from $8.7 million in FY2025, reflecting disciplined spending. Free cash flow (CFO minus capex) was $9.2 million, down sharply from $60.2 million in FY2025.
Shareholder returns totaled $14.8 million ($4.8 million in repurchases and $10.0 million in dividends), down from $37.6 million in FY2025. The dividend was maintained, but repurchases were reduced. The FCF of $9.2 million did not fully cover these returns, requiring use of cash reserves.
Anomalies: The large working capital swing is notable, particularly the $17.1 million increase in accounts receivable and $10.3 million increase in inventory, which may reflect the aftermath of the Dubai branch misconduct and restatement. No one-time tax payments were disclosed.