Movado Group 2026 Q3 Earnings Net Income Surges 91.5% Despite EPS Miss

Movado Group (MOV) reported mixed third-quarter results, with revenue exceeding estimates but earnings per share falling short of expectations. The company’s net income surged 91.5% year-over-year to $9.66 million, while it withheld formal guidance for fiscal 2026 due to macroeconomic uncertainties.

Revenue

Movado’s total revenue rose 3.1% to $186.13 million in Q3 2026, driven by robust performance across segments. Watch and Accessory Brands, the largest contributor, generated $162.72 million, reflecting strong demand for luxury and fashion watches. Licensed brands added $116.36 million, while Owned brands contributed $46.02 million. Company Stores further supported growth with $23.42 million in sales, and after-sales services and other categories accounted for $343,000. Excluding the Middle East, organic growth reached 5.9%, highlighting resilience in core markets.

Earnings/Net Income

Earnings per share (EPS) climbed 95.5% to $0.43, a significant improvement from $0.22 in the prior year, underscoring enhanced profitability. The EPS increase aligns with the company’s gross margin expansion and cost management initiatives, despite elevated tariff costs.

Post-Earnings Price Action Review

The strategy of buying Movado shares post-earnings and holding for 30 days underperformed the benchmark over three years, delivering a -39.31% return versus 65.99%. While the approach avoided losses (0.00% maximum drawdown), it consistently lagged the market, with an excess return of -105.30%.

CEO Commentary

Efraim Grinberg, Chairman & CEO, emphasized progress in navigating tariffs and strengthening brand innovation. “We delivered 3% net sales growth and 80 basis points of gross margin expansion, even while absorbing material tariff costs,” he noted. Grinberg highlighted momentum in U.S. fashion brands and direct-to-consumer channels, along with optimism about the U.S.-Switzerland trade agreement reducing tariffs to 15%.

Guidance

The company refrained from providing fiscal 2026 guidance, citing economic uncertainty and tariff-related risks. However, it outlined plans to leverage tariff relief, refine Middle East strategies, and prioritize profitability. With $183.9 million in cash and no debt, Movado remains positioned for strategic flexibility.

Additional News

1. Dividend Update: Movado declared a quarterly dividend of $0.35 per share, payable on December 22 to shareholders of record by December 8.

2. Tariff Relief: The U.S.-Switzerland framework agreement, announced post-earnings, is expected to reduce tariffs on Swiss watches to 15%, easing cost pressures.

3. Middle East Strategy: Management outlined plans to rebuild the region’s team and refine local strategies, aiming to restore growth in fiscal 2027.