Movado Group, Inc.

First-quarter sales were $142.4 million, versus $131.8 million last year, up 8.1% reported and 4.5% in constant currency. Gross profit was 57.3% of sales, up from 54.1%, a 320-basis-point improvement; adjusted operating income was $7.5 million versus $900,000, and adjusted EPS was $0.32 versus $0.08. Net income was $7.3 million, compared with $1.9 million a year ago. On the balance sheet, cash was $225.3 million, operating cash flow was $7 million, capex was $1.2 million, and the company repurchased about 61,000 shares. Management did not provide fiscal 2027 outlook due to economic and geopolitical uncertainty, but said sales growth should moderate in Q2 after unusually strong replenishment activity in Q1 and that gross margin should remain above last year but below the Q1 level.

Efraim Grinberg said the quarter showed “meaningful momentum” and continued consumer strength across the business, with the strongest contributions coming from the U.S., Europe, direct-to-consumer channels, and new product launches. He emphasized younger consumers returning to the fashion watch category, strong early demand for smaller case sizes and new collections, and improving consumer engagement through digital storytelling. His tone was confident and upbeat, but he repeatedly acknowledged a dynamic external environment and said the company is focusing on controllables like innovation, efficiency, and brand investment.

Sallie DeMarsilis highlighted adjusted first-quarter sales growth of 8.1% to $142.4 million, gross margin of 57.3% versus 54.1%, operating income of $7.5 million, and adjusted EPS of $0.32. She said higher sales and gross margin more than offset higher operating expenses of $74.1 million, and noted about $2 million of other non-operating income, $2.1 million of tax expense, and positive operating cash flow of $7 million. She also pointed to $225.3 million of cash, $1.2 million of capital expenditures, roughly 61,000 shares repurchased, and $44.6 million of remaining authorization under the buyback program, while stating the company would not provide fiscal 2027 outlook.

Analysts focused on whether the strong gross margin improvement was structural or one-time, and management said Q1 was above the likely run rate but that margins should still be higher than last year for the balance of the year. They also pressed on retailer replenishment and whether it was pulled forward from Q2; Grinberg said Q4 was stronger than expected, so retailers replenished more in Q1 and that this temporarily depleted inventory, especially in Movado. On product trends, he said smaller case sizes and distinctive shapes are resonating, and on the Swatch category interest he was neutral but said any renewed attention to watches is good for the industry.