FinancialsApr 15, 2025
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Movado Group to Increase Prices to Offset Tariffs Impact
During a call about its full-year results, CEO Efraim Grinberg discussed how the company is approaching the uncertainty surrounding tariffs.
A set of Movado Connect 2.0 watches. During a recent earnings call, Movado Group announced plans to raise prices on select items as a result of the tariffs.
Paramus, N.J.—Movado Group reported a decline in sales for its fiscal year as sales slipped at its own stores and those of its wholesale U.S. retail partners.
On an earnings call Wednesday morning, CEO Efraim Grinberg discussed the company’s financial results as well as the recent “misconduct” at its Dubai branch and the potential effects tariffs will have on the business, including Movado’s decision to raise prices on select items.
The company announced last week that it would have to restate its financial results going back to 2021 after “unethical conduct” at a subsidiary branch in Dubai, which included overstating and prematurely recording sales to select customers.
“Honesty, integrity, and transparency are at the core of Movado Group as a company. That is why the unethical conduct that occurred at the Dubai sales office is so disappointing,” said CEO Efraim Grinberg on the call.
“Nevertheless, we will emerge from this episode as a stronger company with an even more robust control environment in place.”
The results announced Wednesday reflect the restated financials.
As for the impact of tariffs, Grinberg acknowledged “the increased level of uncertainty in the economic environment and friction in global trade.”
Even with the 90-day pause on higher reciprocal tariffs, he noted the company still faces a 10 percent tariff on products from other countries (excluding China) and rates of more than 100 percent on Chinese products.
Grinberg said that Movado will face tariffs on the bracelets and leather straps made in China that it uses in its fashion watches.
He said the company will do its best to protect its gross margin in the U.S. despite the impact of tariffs.
As a result of the tariffs, the company will be implementing price increases on certain items.
On the call, Chief Financial Officer Sallie DeMarsilis said, “Although we remain focused on maintaining the quality and value consumers expect, we will be implementing selective price increases while actively engaging with our supply chain partners and customers to respond effectively.”
Grinberg added that the company is working to mitigate some of the cost increases.
“What we're trying to do right now is really understand the tariff structure and see where we will be implementing some price increases but doing it in a way that is sustainable for the long term and manageable with both our retail partners and consumers,” he said.
Due to this uncertainty, the company will not be providing an outlook for fiscal year 2026.
Grinberg said, if the tariffs are sustained, it’s not known yet the effects that will have on consumers worldwide, and so it’s hard to predict what the retail environment will look like.
“I think there's just too much uncertainty to know if this will be a year of growth,” said Grinberg, adding that he hopes the company will have more clarity by the first quarter call in May.
Related stories will be right here …
On an earnings call Wednesday morning, CEO Efraim Grinberg discussed the company’s financial results as well as the recent “misconduct” at its Dubai branch and the potential effects tariffs will have on the business, including Movado’s decision to raise prices on select items.
The company announced last week that it would have to restate its financial results going back to 2021 after “unethical conduct” at a subsidiary branch in Dubai, which included overstating and prematurely recording sales to select customers.
“Honesty, integrity, and transparency are at the core of Movado Group as a company. That is why the unethical conduct that occurred at the Dubai sales office is so disappointing,” said CEO Efraim Grinberg on the call.
“Nevertheless, we will emerge from this episode as a stronger company with an even more robust control environment in place.”
The results announced Wednesday reflect the restated financials.
As for the impact of tariffs, Grinberg acknowledged “the increased level of uncertainty in the economic environment and friction in global trade.”
Even with the 90-day pause on higher reciprocal tariffs, he noted the company still faces a 10 percent tariff on products from other countries (excluding China) and rates of more than 100 percent on Chinese products.
Grinberg said that Movado will face tariffs on the bracelets and leather straps made in China that it uses in its fashion watches.
He said the company will do its best to protect its gross margin in the U.S. despite the impact of tariffs.
As a result of the tariffs, the company will be implementing price increases on certain items.
On the call, Chief Financial Officer Sallie DeMarsilis said, “Although we remain focused on maintaining the quality and value consumers expect, we will be implementing selective price increases while actively engaging with our supply chain partners and customers to respond effectively.”
Grinberg added that the company is working to mitigate some of the cost increases.
“What we're trying to do right now is really understand the tariff structure and see where we will be implementing some price increases but doing it in a way that is sustainable for the long term and manageable with both our retail partners and consumers,” he said.
Due to this uncertainty, the company will not be providing an outlook for fiscal year 2026.
Grinberg said, if the tariffs are sustained, it’s not known yet the effects that will have on consumers worldwide, and so it’s hard to predict what the retail environment will look like.
“I think there's just too much uncertainty to know if this will be a year of growth,” said Grinberg, adding that he hopes the company will have more clarity by the first quarter call in May.
Looking to its fourth-quarter results, ending Jan. 31, the company reported that net sales rose 3 percent year-over-year (5 percent on a constant dollar basis) to $181.5 million.
The increase in net sales was attributed to growth in international wholesale channels and online retail.
However, the increase was partially offset by declines in U.S. wholesale customers’ brick and mortar stores and Movado-owned stores, as well as the negative impact of fluctuations in foreign exchange rates.
“I think there's just too much uncertainty to know if this will be a year of growth.”-Movado Group CEO Efraim Grinberg
Gross profit was $98.3 million, or 54 percent of net sales, compared with $94.1 million, or 54 percent of net sales in the previous fourth quarter.
Quarterly sales in the U.S. were down 3 percent year-over-year while international sales rose 9 percent (12 percent on a constant dollar basis).
For the full-year, net sales were down 2 percent year-over-year (2 percent on a constant dollar basis) to $653.4 million.
The decline in full-year net sales was attributed to declines in U.S. wholesale customers’ brick and mortar stores and Movado-owned stores, as well as the negative impact of fluctuations in foreign exchange rates.
It was partially offset by growth in online retail in the U.S. and in international wholesale channels.
Gross profit was $353.1 million, or 54 percent of net sales, compared with $364.2 million, or 55 percent of net sales, in the previous fiscal year.
Full-year sales in the U.S. fell 4 percent year-over-year while international sales were up under 1 percent (1 percent on a constant dollar basis).
“While this past year represented challenges for the company, history has shown that these are the moments when our teams rise to the occasion and deliver. It's in these times that we identify what needs to be corrected, tighten our focus on variable expenses, and raise the bar on execution,” said Grinberg.
Grinberg also shared updates about Movado’s various brands during the call.
The company’s brand portfolio includes its eponymous brand as well as in-house and licensed brands, like Coach and Tommy Hilfiger.
Its namesake brand has been undergoing a “refresh” since last fall, which Movado previously said has paid off, noting increased brand awareness across the market in key demographic targets.
Notably, DeMarsilis said the company plans to reduce its marketing spend by $15 million to $20 million this fiscal year.
The Movado brand introduced a new “Bold Mini Quest” watch and a collection of women’s bangles, which will be available in time for Mother’s Day, as well as new automatic watches for men.
This spring, the brand will introduce its first set of Movado watches set with lab-grown diamonds, priced below $2,000.
Grinberg noted a rise in popularity of women’s watches with feminine, smaller designs, across both its Movado brand and its licensed brands.
The Coach brand is performing well with Gen Z shoppers, he said, while Tommy Hilfiger is seeing success with its skeleton watches and smaller women’s watches.
For Lacoste, the new “LC33” collection was a strong seller as was its “Metropole” bracelet. The brand will introduce a new hexagonal-shaped women’s watch as part of its new “Parisian” collection.
In Hugo Boss, the “Grand Prix” chronograph has been selling out, said Grinberg, while its bold jewelry offerings are also performing well.
For Calvin Klein, the “Pulse” collection has been a bestseller. It will introduce new watches and jewelry this year, including the “Spiral” collection.
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