Movado (MOV) 5 Sep 24 2025 Q2 Earnings call transcript
2min read Movado Group, a leading watch and jewelry company, recently held its second quarter fiscal year 2025 earnings call, offering insights into its performance and strategic initiatives. The call, led by Efraim Grinberg, Chairman and CEO, and Sallie DeMarsilis, Executive Vice President and CFO, highlighted the company's progress amidst a challenging consumer spending environment.
Performance Review: A Mixed Bag of Results
Movado Group reported virtually flat net sales on a constant dollar basis compared to the previous year. While operating profit declined to $3 million, the company maintained a healthy gross margin, indicating resilience in the face of a challenging retail landscape. The company's balance sheet remains strong, with a cash reserve of $198 million and no debt.
Despite cautious retail orders, particularly in Europe and the US, Movado Group saw positive responses to its increased marketing investments. Unit volume in its licensed brands increased by 10%, driven by the reintroduction of certain price points and marketing efforts. Movado brand sales grew by 1.4%, with notable growth in the direct-to-consumer channel and a 21% increase in movado.com sales.
Strategic Initiatives: Accelerating Growth
Movado Group's strategic initiatives are aimed at strengthening its market position and driving future growth. The company is investing in marketing to accelerate sales growth, with a new 360-degree media campaign for its Movado brand featuring Ludacris, Jessica Alba, Julianne Moore, Christo McCaffrey, and Tyrese Haliburton. This comprehensive campaign, which includes digital and linear TV, print magazines, billboards, and social media platforms, is expected to boost brand awareness and attract new consumers.
Movado Group also plans to introduce new products and line extensions, including the Bold Quest collection's automatic version and a new calendar plans automatic assortment, to cater to diverse customer preferences and segments. The company's focus on product innovation and collaboration with brand partners like Coach, Tommy Hilfiger, Hugo Boss, Lacoste, and Calvin Klein underscores its commitment to delivering high-quality and fashionable watches and jewelry.
Future Outlook: Navigating Challenges and Opportunities
The global operating environment remains challenging for retail and the watch category, with uncertainties affecting Movado Group's second half results. Despite this, the company remains confident in its strategic initiatives and is focused on bringing operating expenses in line with sales to improve financial metrics. The launch of the new Movado campaign and product offerings is expected to drive growth and market share in the challenging consumer spending backdrop.
Conclusion: Steadfast in the Face of Challenges
Movado Group's second quarter earnings call underscores the company's strategic focus on brand-building, product innovation, and marketing efforts. Despite the challenging retail landscape and economic uncertainties, Movado Group is investing in its future growth and maintaining a strong financial position. With a robust product portfolio and strategic initiatives, the company is well-positioned to navigate the challenges and capitalize on opportunities in the watch and jewelry market.