Sep 19 2026 12:11 PM EST
Movado Beats Estimates as New Product Launches and Tariff Refunds Boost Margins
Movado Group (NYSE: MOV) reported second‑quarter FY2026 results that topped consensus expectations, posting net sales of $169.8 million (+4.9% YoY) and diluted earnings per share of $0.53 versus the FactSet consensus of $0.35. The earnings beat coincided with a rise in the stock price, reflecting investors’ reassessment of margin outlook and growth prospects.
Quarterly results exceed expectations
Revenue grew 4.9% year‑over‑year, while adjusted operating income more than doubled to $15.1 million from $7.0 million a year earlier. Adjusted EPS of $0.54 beat the consensus estimate of $0.35, underscoring the impact of both operating improvements and a one‑time $3.2 million IEEPA duty‑refund.
Product and branding initiatives drive top‑line growth
Movado highlighted the launch of the Baby Face mini‑strap watch, refreshed Coach and Tommy Hilfiger collections, and an upcoming Kate Spade New York watch license effective July 2026. E‑commerce sales rose 8% YoY, with Movado.com traffic and conversion improving alongside a 145th‑anniversary storytelling campaign.
Tariff refunds and margin dynamics
A $3.2 million refund related to the International Emergency Economic Powers Act (IEEPA) duties contributed roughly $0.11 to adjusted EPS. Management noted that the gross‑margin boost is temporary; the company targets a gross margin of 55‑56% for the second half of FY2026 as the duty‑refund benefit normalizes and inventory effects fade.
Macro backdrop and risks
The watch segment remains sensitive to U.S. import tariffs, which imposed a 130‑basis‑point gross‑margin drag in the quarter. Ongoing Middle‑East tensions have raised fuel surcharges and shipping costs, while foreign‑exchange volatility continues to affect both costs and revenues. Broader economic headwinds—persistent inflation, elevated interest rates, and weaker consumer discretionary spending—pose additional risks to demand.
Balance sheet strength and shareholder returns
Movado closed the quarter with $211.6 million in cash and equivalents and zero debt, providing ample liquidity for dividends and share repurchases. The board declared a regular quarterly dividend of $0.35 per share and a special dividend of $0.40 per share payable June 24 2026. The share‑repurchase program remains active, with $44.6 million of authorization still available.
Outlook and valuation context
Management guided to mid‑single‑digit revenue growth for the second half of FY2026 and reaffirmed the 55‑56% gross‑margin target. Trailing‑12‑month metrics show a 6.0% sales growth rate, operating margin of 6.9%, and net‑income margin of 6.0% for FY2026, reflecting an improving profitability trend after a weak FY2025. The stock has delivered a 5‑day gain of 2.6% and a 1‑year total return of 80.8% (including dividends), positioning it at a forward P/E of roughly 18× and an EV/Revenue multiple near 0.9×.
Investor Watchlist
Margin pressure
The expiration of the IEEPA duty refunds and ongoing tariff exposure could compress gross margins in H2.
Demand outlook
Consumer discretionary spending remains vulnerable to inflation and higher interest rates.
Catalyst: Kate Spade watch launch
The new Kate Spade license, effective July 2026, could add a growth engine beyond the existing licensed‑brand portfolio.
Overall, the earnings beat reflects a blend of one‑off tariff benefits, product‑cycle momentum and disciplined cost management. Investors will watch whether the margin advantage can be sustained once the duty‑refund effect wanes, and how the upcoming Kate Spade launch and e‑commerce initiatives influence revenue growth in a challenging macro environment.