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MOV
Earnings call · Jul 2026 (Q2 FY27)

MOVADO GROUP Q2 FY27 earnings call MOV

Aug 26, 2026 Source

Executive summary

Movado Group Q2 FY27 — Strong Sales Growth and Margin Expansion

Movado Group delivered strong Q2 FY27 results, driven by robust sales growth and significant gross margin expansion, despite regional headwinds in the Middle East. The company is focused on consumer-centric innovation and digital storytelling, leading to positive momentum across brands and categories. Management has discontinued providing an annual outlook, emphasizing long-term strategy and sustainable profitable growth.

Highlights

5

  • Sales increased 4.9% to $169.8 million.

  • Adjusted operating profit increased to $15.1 million from $7 million last year.

  • Adjusted EPS increased to $0.54 from $0.23 last year.

  • Gross margin improved to 59.4%, or 57.5% excluding IEEPA duty refunds, a 340 basis point improvement.

  • Cash balance of $211.6 million with no debt.

Concerns

3

  • Sales declined in the Middle East due to regional headwinds and reliance on international tourism.

  • Higher shipping costs partially offset gross margin improvement.

  • The favorable gross margin impact from IEEPA duty refunds is temporary and not anticipated to continue in H2 FY27.

Guidance & targets

CategoryTargetConfidence
Annual Outlook
Discontinued
high materiality
High
Top Line Growth
Mid-single-digit range
high materiality
Medium
Gross Margin
55% to 56%
high materiality
Medium
Share Repurchase Program
Offset dilution
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
U.S.
Net sales increased compared to the second quarter of last year.
—4.9%——
International
Strong performances in certain markets such as Asia, Europe, and Latin America. Partially offset by a decline in the Middle East due to regional headwinds, particularly in markets reliant on international tourism.
Constant currency net sales growth: 4.1%
—4.9%——
Movado.com
Continued strong performance, elevating average selling prices and driving improving margins.
—8%——
Movado outlet stores
Continued strong performance, elevating average selling prices and driving improving margins.
—3%——
Licensed brands
Net sales increased.
—Increased——
Company stores
Net sales increased.
—Increased——
Owned brands
Net sales increased.
—Increased——
Olivia Burton (UK & US focus)
Sales increased for the quarter, with small shaped watches driving the business.
—23%——

Product announcements

ProductTypeDetails
Movado Baby Face mini strap watchlaunch
Movado BOLD Verso Slaunch
Coach Irislaunch
Coach mini Sammylaunch
Coach Gretalaunch
Tommy Hilfiger Bryant familylaunch
Lacoste Metropole collection (jewelry)expansion
Calvin Klein sophisticated square watch collectionlaunch
Calvin Klein Shapelaunch
Calvin Klein Command jewelry collectionlaunch
BOSS Grand Prix Vitesselaunch
BOSS Archer jewelry collectionlaunch
BOSS Violetlaunch
Olivia Burton Cambridge familylaunch

Deals & partnerships

Tapestry Expansion of long-term partnership to launch Kate Spade watches. Long-term

Beginning next fiscal year (FY28), Movado Group will launch Kate Spade watches. Introductory collection is receiving a strong response from partners globally.

Risks & headwinds

Middle East conflict and reliance on international tourism Ongoing (Q2 FY27)

Decline in sales in the Middle East

Higher shipping costs Q2 FY27

Increased operating expenses by $5.2 million

Mitigation:Better preparedness to manage fuel surcharges; factors built into back half of the year.

Temporary IEEPA duty refund benefit H2 FY27

Gross margin benefit of 190 basis points in Q2 FY27; not anticipated to continue in H2 FY27

What to watch in Q3 FY27

Gross Margin Trajectory

H2 FY27
Current 57.5% (Q2 FY27, ex-IEEPA)
Target 55%-56% in H2 FY27

Why it matters

Gross margin is a key profitability driver, and the H2 guidance reflects a step-down from Q2 due to the temporary nature of IEEPA inventory benefits.

As such, consistent with the first half results, the company expects top line growth in the mid-single-digit range for the remainder of this fiscal year and second half gross margin to be in a range of 55% to 56%.

Q&A highlights

Inquired about the sustainability of the 340 bps gross margin improvement (excluding IEEPA benefit) and the reasons for the step-down in H2 guidance, as well as the significance of higher shipping costs.

Management attributed the Q2 gross margin improvement to a mix of structural factors (pricing, ASPs) and temporary benefits from legacy inventory with reversed IEEPA tariffs. The H2 step-down is 100% due to the temporary nature of the inventory benefit. Higher shipping costs were due to fuel surcharges and increased e-commerce activity, which are factored into H2.

“So it's a mix of improved pricing and better average selling prices across the board. But it's also -- we did have a benefit of legacy inventory that was in our warehouses that we had accrued an IEEPA tariff on, and we immediately were able to reverse that during the first quarter.”

asked by Owen Rickert · answered by Efraim Grinberg

2 min read 6 chapters

Detailed narrative

Strategic Priorities & Execution

Movado Group continues to advance its four key strategic priorities: consumer-centricity, innovation, digital storytelling, and driving profitability through higher average selling prices and optimized assortments. These priorities have contributed to sales growth in the U.S. and principal international markets, with strong performances in Latin America and India, reflecting meaningful progress and favorable category trends.

Gross Margin Improvement Drivers

Gross margin improved significantly to 59.4%, or 57.5% excluding IEEPA duty refunds, a 340 basis point increase. This improvement was driven by favorable business mix, strategic pricing initiatives, reduced promotional activity, and a favorable mix of inventory sold carrying lower duty rates following the repeal of IEEPA tariffs. The company is also streamlining assortments and reducing SKU counts to improve efficiency.

Brand Innovation & Consumer Engagement

The company is seeing strong consumer response to innovation, particularly trend-right products resonating with younger consumers. Examples include Movado's Baby Face mini strap watch, Coach's Sammy and Iris collections, and Tommy Hilfiger's T.H. Oxford and Bryant families. Marketing efforts are amplified through digital content and brand ambassadors like Ludacris and Julianne Moore, connecting with customers across digital platforms.

Watch Category Resurgence

Management notes a resurgence in the watch category, with younger consumers increasingly engaging with traditional watches as accessories and fashion statements, rather than wearables. This positive trend is observed across social media, press, and retailers, positioning Movado's brands well to capitalize on the renewed interest in traditional timepieces as consumers mature and gain higher disposable income.

Balance Sheet Strength & Capital Allocation

Movado maintains a very strong balance sheet with $211.6 million in cash and no debt, compared to $180.5 million last year. Year-to-date, over $16 million has been returned to shareholders via quarterly dividend payments. The company plans to utilize its remaining $44.6 million share repurchase authorization to offset dilution in fiscal 2027, demonstrating a commitment to shareholder returns.

IEEPA Duty Refunds & Future Recovery

The company received $3.2 million in IEEPA duty refunds in Q2 FY27, which favorably impacted gross margin by 190 basis points. An additional $6.8 million in IEEPA duties is expected to be recovered, though not recognized until the cash refund is received. The temporary benefit from lower duty rates on inventory sold is not anticipated to continue in the second half of the fiscal year.

AI-generated summary of the company's earnings call. Not investment advice.