Movado’s Q1 Sales Slip Amid ‘Challenging’ Retail Environment

Paramus, N.J.—Movado Group’s sales declined in its first quarter as it faced a tough retail landscape and the impact of tariffs.

“In the first quarter, we navigated a challenging retail environment with discipline and focus, continuing to invest in our iconic brands while driving operational efficiency,” CEO Efraim Grinbergs said in a statement.

On the company’s earnings call Thursday morning, Grinberg provided insight into how the company’s brands are performing, the effect of tariffs on its business, and what younger shoppers are buying.

In the first quarter ending April 30, net sales slipped 2 percent year-over-year (1 percent on a constant dollar basis) to $131.8 million.

Movado attributed the decrease to sales declines at Movado-owned stores and its in-house watch brands, partially offset by an uptick in sales of its licensed brands.

The company’s brand portfolio includes Movado, Ebel, and Concord, as well as licensed brands like Coach and Tommy Hilfiger.

Its licensed brands performed well, especially its fashion watch category, said Grinberg, while new products from the Movado brand were well received for Mother’s Day.

Quarterly sales in the United States were down 2 percent year-over-year while international sales also fell 2 percent (1 percent on a constant dollar basis).

In addressing the ongoing tariffs situation, Grinberg said there is cause for optimism amid the uncertainty.

“As we progress through the current quarter and position ourselves for the second half, we are seeing some positive signs. While continuing to navigate a retail and economic environment affected by tariff- related uncertainties, at the current temporary U.S. tariff rates, we believe we can partially mitigate the associated cost increases through available levers and including selective price increases.”

Grinberg noted that the current tariff rates are subject to change, and given the level of global uncertainty, the company is focusing on what it can control and operating “with a high level of flexibility and agility.”

“Still, we see resilience in the category with young consumers embracing trend-forward watches and jewelry. Across our portfolio, we have seen strong momentum in women’s watch collections and men’s jewelry offerings, both of which are helping to drive engagement and growth,” Grinberg said.

He also noted renewed interest in smaller watches among younger consumers.

As for its brand portfolio, the Movado brand has been undergoing a refresh, which Grinberg said is going well.

Its newly introduced styles, including the “Mini Bangle” collection and the “Bold Mini Quest” watch, received a positive response from customers with price points at $750 and $595, respectively.

“I think the challenges are that discretionary purchases are challenged and value still continues to be really important,” he said.

Movado brand ambassador and NBA star Tyrese Haliburton, a point guard for the Indiana Pacers, is having “a standout playoff run,” added Grinberg, which has enhanced the brand’s visibility.

Its licensed brands, meanwhile, recorded a high single digit increase in sales, he said.

Gen Z and millennial shoppers are gravitating towards the Coach brand, particularly the “Sammy” and “Cast” collections.

Hugo Boss found success with the “Sky Traveler” collection for men and the “Lucy” women’s collection. It is also growing its jewelry offerings.

Lacoste posted growth in the quarter, highlighting its “LS33” and “Boston” lines in particular. Its “Metropole” bracelet remains a top seller in the brand’s jewelry segment.

The Calvin Klein brand is focusing on driving growth in its women’s business, with the “Pulse” collection and the new “Meridian” watch. As for its jewelry, the “Elongated Drop” CK Jewelry collection was a top seller.

Tommy Hilfiger’s skeleton watches remained popular, as did its “Bank” chronograph in the brand’s classic colors. The “Tia” square watch for women also performed well.

The Olivia Burton brand did well in both the U.S. and the U.K., particularly its “Grosvenor” watch.

Sales at Movado’s outlet division slipped 2 percent in the first quarter, an improvement that has continued in Q2, said Grinberg.

Looking at other financial metrics, gross profit was $71.4 million, or 54.1 percent of net sales, compared with $72.9 million, or 54.3 percent of net sales, in the previous first quarter.

The decrease in gross margin percentage was attributed in part to the negative impact of foreign exchange rate fluctuations, increased shipping costs, and the decreased leverage of certain fixed costs as a result of lower sales.

However, it was somewhat offset by favorable changes in channel and product mix, said Movado.

Notably, Movado announced last month 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.

Looking to the year ahead, Movado declined to provide a fiscal 2026 outlook, citing “the current economic uncertainty and the unpredictable impact of tariff developments.”

“As we begin the second quarter, we anticipate continued market volatility, yet we are optimistic about the opportunities that lie ahead, as we introduce compelling innovation across our powerful brand portfolio,” Grinberg said.