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Movado: Movado Group's Q3 FY2026: Steady Performance Amidst Challenges

Movado Group reported a 3.1% revenue growth to $186.1 million in the third quarter of fiscal 2026, or 5.9% excluding the Middle East where the company is rebuilding its presence. The gross margin improved by 80 basis points to 54.3% despite the impact of incremental U.S. tariffs. Adjusted operating income saw a significant increase of more than 40% to $12.6 million. Earnings per share (EPS) came in at $0.45, below analyst estimates of $0.57. For the first nine months, the company generated positive operating cash flow of $1.3 million, a significant improvement from the $40.6 million cash outflow in the same period last year.

MOV

USD 21.46

-0.65%

A-Score: 5.9/10

Publication date: November 25, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue Growth: 3.1% to $186.1 million; 5.9% excluding Middle East
  • Gross Margin Improvement: Increased 80 bps to 54.3% despite $4.5M tariff impact
  • Adjusted Operating Income: Rose >40% to $12.6 million
  • Operating Cash Flow Turnaround: $1.3M positive vs. -$40.6M in prior year
  • Strong Balance Sheet: $183.9M cash, no debt, and 35¢/share dividend approved

Operational Highlights

The company's Movado brand sales grew by double digits in company stores, with a 17.7% increase, driven by strong performance across various categories. Licensed brands, including Coach, Hugo Boss, and Tommy Hilfiger, also saw robust sales. The company remains optimistic about the improving dynamics in the fashion and accessible luxury watch categories, driven by innovation and growing interest from women and younger consumers.

Outlook and Tariff Impact

The recent trade agreement between the US and Switzerland is expected to lower the overall US tariff rate on Swiss watches to 15%, allowing the company to plan more effectively and reduce price-based mitigation. Movado Group plans to continue investing in brand building efforts while driving improved profitability. The company's strong balance sheet, with $183.9 million in cash and no debt, provides a solid foundation for future growth.

Valuation and Dividend

With a P/E Ratio of 23.07 and a Dividend Yield of 6.57%, the company's valuation reflects a balance between growth expectations and return on investment. The board has approved a quarterly dividend of 35¢ per share, indicating a commitment to returning value to shareholders. Analysts estimate next year's revenue growth at 0.0%, suggesting a cautious outlook. The company's ability to generate positive operating cash flow and maintain a strong balance sheet will be crucial in navigating the challenges ahead.

Movado's A-Score