Market & Industry

Movado Group Reports Strong Q4 Growth Driven by U.S. Demand and New Product Lines

Model Georgia May Jagger in a Tommy Hilfiger campaign, a licensed brand of Movado Group. - nationaljeweler.com

Fiscal Year and Fourth Quarter Performance

Movado Group Inc. announced robust financial results for its fiscal year 2026, reporting a 2.7% increase in revenue to $671.3 million. The company's fourth-quarter sales showed a notable 5.6% rise, reaching $191.6 million. Adjusted operating income saw a significant 28.7% jump to $34.8 million for the full fiscal year, with a 6.2% increase to $14.4 million in the fourth quarter. This performance reflects strong execution across the company’s strategic priorities.

For the fourth quarter of fiscal 2025, Movado surpassed expectations, reporting $191.6 million in revenue, a 9.7% increase year-over-year and 5.3% above analyst predictions. Adjusted earnings per share reached $0.57, 5.6% higher than consensus estimates. The company ended the fiscal year with a healthy financial position, holding $230 million in cash and no debt.

U.S. Market Momentum and Consumer Trends

A primary driver of Movado's success was the strong demand in the U.S. market. U.S. net sales increased by 11.2% in the fourth quarter and 4.3% for the fiscal year. Management highlighted a significant resurgence of women into the watch category, alongside strong engagement from younger consumers. This trend was attributed to new designs, particularly smaller case sizes and refreshed product lines, including the popular mini bangle and 1917 Heritage collections. Higher-priced automatic watches also attracted more male customers.

CEO Efraim Grinberg emphasized the ongoing momentum in both the fashion and accessible luxury watch segments. The company's omnichannel approach, enhanced digital marketing, and effective in-store strategies contributed to boosted sales and increased average transaction values.

Brand Portfolio and Licensed Partnerships

Movado’s own brands experienced robust wholesale sales growth exceeding 25%, while e-commerce saw an 18% increase. The company also benefited from its portfolio of licensed brands, including Coach, Hugo Boss, Lacoste, Tommy Hilfiger, Calvin Klein, and Olivia Burton. These brands contributed through new launches and targeted marketing efforts. Coach, in particular, saw success driven by Gen Z engagement and popular collections. Licensed brands also expanded their reach in both men’s and women’s segments.

Navigating External Challenges

Despite the positive performance, Movado faced external pressures, including tariffs, which impacted gross margins. The company reported a $10 million cost due to IEEPA tariffs. Gross margins remained nearly flat, at 54.1% for the fourth quarter and 54.2% for the fiscal year. Management is focused on margin expansion through supply chain optimization, disciplined pricing, and operational efficiencies, aiming to leverage higher production volumes to counteract cost pressures. Increased volumes and smart sourcing helped offset some tariff expenses.

International net sales saw a more modest increase of 1% for the fourth quarter and 1.6% for the fiscal year. Performance was affected by a decrease of 5.9% on a constant currency basis, partly due to weaker performance in the Middle East. Geopolitical uncertainties, including the conflict in the Middle East, also contributed to the company’s decision not to provide a fiscal 2027 outlook.

Future Outlook and Strategic Priorities

Looking ahead, Movado aims to maintain its growth momentum through continuous product innovation, strategic brand storytelling, and by addressing external challenges. Key initiatives include the upcoming launch of the Valeura women’s Museum watch, expansion of the Movado Bold collection, and the introduction of more jewelry pieces designed to attract women and Gen Z consumers. These efforts are expected to support premium pricing and potentially boost margins.