Movado Group 2026 Q1 Earnings Net Income Declines 40.2% Amid Revenue Drop

Movado Group (MOV) reported its fiscal 2026 Q1 earnings on May 29th, 2025, revealing a 1.9% decline in total revenue to $131.8 million compared to the same quarter last year. The company missed expectations, with net income falling 40.2% to $1.28 million. Movado Group did not provide specific guidance for fiscal 2026 due to macroeconomic uncertainties, including tariff impacts. The company anticipates improved operating cash flow in the second half, driven by inventory management and a strong balance sheet, despite the unpredictable economic environment.

Revenue
Movado Group's revenue in fiscal 2026 Q1 stood at $131.8 million, a slight decrease from the previous year's $134.38 million. The decline was reflected across various segments, including Watch and Accessory Brands, which contributed $114.8 million. Owned brands generated $33.13 million, while Licensed brands accounted for $80.24 million. After-sales service and all other sources brought in $1.43 million, and revenue from Company Stores reached $16.97 million, culminating in a consolidated total of $131.77 million.

Earnings/Net Income
Movado Group's earnings per share (EPS) dropped from $0.09 in 2025 Q1 to $0.06 in 2026 Q1, marking a 33.3% decline. Meanwhile, net income fell to $1.28 million, down 40.2% from $2.14 million reported in 2025 Q1. This decline indicates challenging market conditions and emphasizes the need for strategic adjustments.

Post-Earnings Price Action Review
The post-earnings strategy of buying MOV shares following a revenue miss and holding them for 30 days resulted in a 36.45% return, noticeably underperforming the benchmark return of 83.88%. This strategy yielded an excess return of -47.43%, with a compound annual growth rate (CAGR) of 6.45%. However, it faced a significant maximum drawdown of -69.98%, illustrating the strategy's risk. The Sharpe ratio was calculated at 0.15, underscoring the relatively low risk-adjusted return, while volatility was recorded at 44.41%, reflecting substantial fluctuations in price during the holding period.

CEO Commentary
Efraim Grinberg, Chairman and Chief Executive Officer, expressed satisfaction with Movado Group's performance despite global economic challenges. He acknowledged the 1.9% decrease in sales to $131.8 million but emphasized initiatives to strengthen brand positioning and consumer engagement through innovation and partnerships, such as the collaboration with NBA star Tyrese Haliburton. Grinberg noted ongoing challenges in discretionary spending but highlighted positive consumer interest in new products, stating the company's focus on delivering value to consumers while rationalizing expenses to improve financial performance amid market uncertainties.

Guidance
Movado Group has opted not to provide specific financial guidance for fiscal 2026 due to macroeconomic and tariff-related uncertainties. The company is implementing selective price increases and plans to mitigate cost increases associated with tariffs while maintaining quality and value. Grinberg mentioned expectations for improved operating cash flow in the second half of the year, driven by inventory management and a strong balance sheet, although the current economic environment remains unpredictable.

Additional News
Movado Group has been involved in several noteworthy developments recently. The company announced a quarterly dividend of $0.35 per share, payable on June 26, 2025, to shareholders of record as of June 12, 2025, reflecting a commitment to returning value to shareholders. Additionally, Movado Group has been subject to multiple investigations by law firms such as Bronstein, Gewirtz & Grossman, LLC, and the Portnoy Law Firm, which are exploring potential claims on behalf of investors. These investigations focus on securities-related matters and highlight ongoing scrutiny faced by the company in the current economic environment.