Movado Group, Inc. reported third‑quarter fiscal 2026 results that showed net sales of $186.1 million, a 3.1% year‑over‑year increase driven by growth in licensed brands and the Company Stores segment, while a decline in owned‑brand sales partially offset the gain.
Operating income rose to $11.7 million and adjusted operating income reached $12.6 million, reflecting a 54.3% gross margin that expanded 80 basis points from 53.5% in the prior year. The margin lift was largely due to a higher mix of higher‑margin licensed products and lower marketing expenses, which helped offset the impact of U.S. tariffs on Swiss watches.
GAAP earnings per share were $0.42, missing the consensus estimate of $0.57 by $0.15. Adjusted EPS was $0.45, also below the $0.57 expectation by $0.12. The shortfall was driven by a combination of higher cost inflation and a modest decline in operating leverage, despite the revenue growth and margin expansion.
Management highlighted that the revenue increase was supported by a 6.9% rise in U.S. sales, led by a 11.9% jump in Movado company‑store performance and a 12.4% rise on movado.com. CEO Efraim Grinberg noted that the company remains optimistic about tariff relief from a new U.S.–Switzerland trade agreement, which he expects to reduce costs in the coming quarters.
The company maintains a strong balance sheet with $183.9 million in cash and no debt, positioning it well to weather economic uncertainty. Movado did not provide forward guidance for fiscal 2026, citing the unpredictable impact of tariff developments and broader macro‑economic conditions.
The results underscore the company’s ability to grow revenue and improve margins, but the EPS miss highlights the challenges of cost pressures and the need for continued cost discipline to meet analyst expectations.
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