UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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(Address of Principal Executive Offices) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for that past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,’’ “accelerated filer,’’ “smaller reporting company,’’ and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares outstanding of the registrant’s Common Stock and Class A Common Stock as of May 24, 2024 were
MOVADO GROUP, INC.
Index to Quarterly Report on Form 10-Q
April 30, 2024
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Part I |
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Financial Information (Unaudited) |
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Item 1. |
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Consolidated Balance Sheets at April 30, 2024, January 31, 2024 and April 30, 2023 |
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Consolidated Statements of Operations for the three months ended April 30, 2024 and April 30, 2023 |
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Consolidated Statements of Cash Flows for the three months ended April 30, 2024 and April 30, 2023 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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25 |
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Item 4. |
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Part II |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 5. |
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Item 6. |
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30 |
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
MOVADO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
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April 30, |
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January 31, |
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April 30, |
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2024 |
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2024 |
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2023 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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$ |
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Trade receivables, net |
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Inventories |
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Other current assets |
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Income taxes receivable |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets |
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Deferred and non-current income taxes |
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Other intangibles, net |
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Other non-current assets |
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Total assets |
$ |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
$ |
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$ |
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$ |
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Accrued liabilities |
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Accrued payroll and benefits |
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Current operating lease liabilities |
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Income taxes payable |
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Total current liabilities |
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Deferred and non-current income taxes payable |
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Non-current operating lease liabilities |
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Other non-current liabilities |
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Total liabilities |
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(Note 8) |
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Equity: |
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Preferred Stock, $ |
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Common Stock, $ |
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Class A Common Stock, $ |
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Capital in excess of par value |
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Retained earnings |
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Accumulated other comprehensive income |
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Treasury Stock, |
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Total Movado Group, Inc. shareholders' equity |
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Noncontrolling interest |
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Total equity |
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Total liabilities and equity |
$ |
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$ |
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$ |
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See Notes to Consolidated Financial Statements
3
MOVADO GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended April 30, |
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2024 |
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2023 |
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Net sales |
$ |
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$ |
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Cost of sales |
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Gross profit |
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Selling, general and administrative |
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Operating income |
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Non-operating income/(expense): |
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Other income, net |
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Interest expense |
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Income before income taxes |
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Provision for income taxes (Note 9) |
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Net income |
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Less: Net income attributable to noncontrolling interests |
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Net income attributable to Movado Group, Inc. |
$ |
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$ |
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Basic income per share: |
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Weighted basic average shares outstanding |
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Net income per share attributable to Movado Group, Inc. |
$ |
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$ |
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Diluted income per share: |
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Weighted diluted average shares outstanding |
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Net income per share attributable to Movado Group, Inc. |
$ |
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$ |
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See Notes to Consolidated Financial Statements
4
MOVADO GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
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Three Months Ended April 30, |
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2024 |
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2023 |
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Net income |
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$ |
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$ |
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Other comprehensive income/(loss): |
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Net unrealized gain/(loss) on investments, net of tax provision/(benefit) of $ |
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Amortization of prior service cost, net of tax provision of $ |
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Foreign currency translation adjustments |
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Cash flow hedges: |
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Accumulated other comprehensive income/(loss) before reclassification, net of tax provision/(benefit) of $ |
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Amounts reclassified from accumulated other comprehensive (loss)/income, net of tax (benefit)/provision of ($ |
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Total other comprehensive (loss)/income, net of taxes |
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Less: |
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Comprehensive income/(loss) attributable to noncontrolling interests: |
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Net income |
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Foreign currency translation adjustments |
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( |
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Total comprehensive income attributable to noncontrolling interests |
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$ |
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$ |
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Total comprehensive (loss)/income attributable to Movado Group, Inc. |
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$ |
( |
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$ |
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See Notes to Consolidated Financial Statements
5
MOVADO GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Three Months Ended April 30, |
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2024 |
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2023 |
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Cash flows from operating activities: |
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Net income |
$ |
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$ |
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Adjustments to reconcile net income to net cash used in operating activities: |
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Depreciation and amortization |
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Transactional gains |
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Provision for inventories and accounts receivable |
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Deferred income taxes |
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Stock-based compensation |
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Other |
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Changes in assets and liabilities: |
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Trade receivables |
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Inventories |
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( |
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Other current assets |
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( |
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Accounts payable |
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( |
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Accrued liabilities |
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Accrued payroll and benefits |
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( |
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Income taxes receivable |
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( |
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Income taxes payable |
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( |
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( |
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Other non-current assets |
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Other non-current liabilities |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Capital expenditures |
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Long-term investments |
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Trademarks and other intangibles |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Dividends paid |
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( |
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Stock repurchases |
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Stock awards and options exercised and other changes |
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Net cash used in financing activities |
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( |
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Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
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Net decrease in cash, cash equivalents and restricted cash |
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Cash, cash equivalents, and restricted cash at beginning of year |
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Cash, cash equivalents, and restricted cash at end of period |
$ |
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$ |
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Reconciliation of cash, cash equivalents, and restricted cash: |
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Cash and cash equivalents |
$ |
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$ |
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Restricted cash included in other non-current assets |
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Cash, cash equivalents, and restricted cash |
$ |
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$ |
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See Notes to Consolidated Financial Statements
6
MOVADO GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07 "Improvements to Reportable Segment Disclosures" which requires expanded disclosures about an entity's reportable segments, including more enhanced information about a reportable segment's expenses, interim segment profit or loss, and how an entity's chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024. ASU 2023-07 should be adopted on a retrospective basis. Early adoption is permitted. The Company is currently evaluating this ASU to determine the impact of adoption on its Consolidated Financial Statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" which requires expanded income tax disclosures primarily related to an entity's effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and should be adopted on a prospective basis. Early adoption is permitted. The Company is currently evaluating this ASU to determine the impact of adoption on its Consolidated Financial Statements and related disclosures.
NOTE 3 – EARNINGS PER SHARE AND CASH DIVIDENDS
The Company presents net income attributable to Movado Group, Inc. after adjusting for noncontrolling interests, as applicable, per share on a basic and diluted basis. Basic earnings per share is computed using weighted average shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for dilutive common stock equivalents.
The number of shares used in calculating basic and diluted earnings per share is as follows (in thousands):
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Three Months Ended April 30, |
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2024 |
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2023 |
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Weighted average common shares outstanding: |
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Basic |
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Effect of dilutive securities: |
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Stock awards and options to purchase shares of |
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Diluted |
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7
For the three months ended April 30, 2024 and 2023, approximately
On March 26, 2024, the Company declared a quarterly cash dividend of $
NOTE 4 – INVENTORIES
Inventories consisted of the following (in thousands):
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April 30, |
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January 31, |
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April 30, |
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Finished goods |
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$ |
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$ |
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$ |
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Component parts |
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Work-in-process |
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$ |
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$ |
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$ |
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NOTE 5 – DEBT AND LINES OF CREDIT
The Company and its U.S. and Swiss subsidiaries (collectively, the "Borrowers") are parties to an Amended and Restated Credit Agreement originally dated October 12, 2018 (as subsequently amended, the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”). The Credit Agreement provides for a $
The borrowings under the Facility are joint and several obligations of the Borrowers and are also cross-guaranteed by each Borrower, except that the Swiss Borrower is not liable for, nor does it guarantee, the obligations of the U.S. Borrowers. In addition, the Borrowers’ obligations under the Facility are secured by first priority liens, subject to permitted liens, on substantially all of the U.S. Borrowers’ assets other than certain excluded assets. The Swiss Borrower does not provide collateral to secure the obligations under the Facility.
As of both April 30, 2024, and April 30, 2023, there were
The Company had weighted average borrowings under the Facility of
8
The Company's Swiss subsidiary maintains unsecured lines of credit with a Swiss bank that are subject to repayment upon demand. As of April 30, 2024, and 2023, these lines of credit totaled
Cash paid for interest, including unused commitments fees and amortization of debt fees, was $
NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS
The Company addresses certain financial exposures that include the use of derivative financial instruments. The Company enters into foreign currency forward contracts to reduce the effects of fluctuating foreign currency exchange rates. As of April 30, 2024, the Company's net forward contracts hedging portfolio designated as qualified cash flow hedging instruments consisted of
The following table presents the fair values of the Company's derivative financial instruments included in the Consolidated Balance Sheets as of April 30, 2024, January 31, 2024 and April 30, 2023 (in thousands):
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Asset Derivatives |
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Liability Derivatives |
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Balance |
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April 30, |
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January 31, |
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April 30, |
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Balance |
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April 30, |
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January 31, |
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April 30, |
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Derivatives designated as hedging instruments: |
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Foreign Exchange Contracts |
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Other Current |
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$ |
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$ |
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$ |
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Accrued |
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$ |
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$ |
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$ |
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Total Derivative Instruments |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Asset Derivatives |
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Liability Derivatives |
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Balance |
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April 30, |
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January 31, |
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April 30, |
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Balance |
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April 30, |
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January 31, |
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April 30, |
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Derivatives not designated as hedging instruments: |
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Foreign Exchange Contracts |
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Other Current |
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$ |
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$ |
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$ |
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Accrued |
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$ |
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$ |
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$ |
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Total Derivative Instruments |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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As of April 30, 2024, January 31, 2024 and April 30, 2023, the balance of net deferred gains on derivative financial instruments designated as cash flow hedges included in accumulated other comprehensive income/(loss) were $
See Note 7 - Fair Value Measurements for fair value and presentation in the Consolidated Balance Sheets for derivatives.
9
NOTE 7 – FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:
The guidance requires the use of observable market data if such data is available without undue cost and effort.
The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of April 30, 2024 and 2023 and January 31, 2024 (in thousands):
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Fair Value at April 30, 2024 |
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Balance Sheet Location |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Assets: |
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Available-for-sale securities |
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Other current assets |
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$ |
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$ |
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$ |
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$ |
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Short-term investment |
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Other current assets |
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SERP assets - employer |
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Other non-current assets |
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SERP assets - employee |
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Other non-current assets |
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Defined benefit plan assets |
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Other non-current liabilities |
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|
|
|
|
|
|
|
||||
Hedge derivatives |
|
Other current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SERP liabilities - employee |
|
Other non-current liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Hedge derivatives |
|
Accrued liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
Fair Value at January 31, 2024 |
|
|||||||||||||
|
|
Balance Sheet Location |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities |
|
Other current assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-term investment |
|
Other current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
SERP assets - employer |
|
Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
SERP assets - employee |
|
Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Defined benefit plan assets |
|
Other non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hedge derivatives |
|
Other current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SERP liabilities - employee |
|
Other non-current liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Hedge derivatives |
|
Accrued liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
10
|
|
|
|
Fair Value at April 30, 2023 |
|
|||||||||||||
|
|
Balance Sheet Location |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities |
|
Other current assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-term investment |
|
Other current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
SERP assets - employer |
|
Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
SERP assets - employee |
|
Other non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Defined benefit plan assets |
|
Other non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hedge derivatives |
|
Other current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SERP liabilities - employee |
|
Other non-current liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Hedge derivatives |
|
Accrued liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The fair values of the Company’s available-for-sale securities are based on quoted market prices.
The Company sponsors a defined benefit pension plan in Switzerland. The plan covers certain international employees and is based on years of service and compensation on a career-average pay basis. The assets within the plan are classified as a Level 3 asset within the fair value hierarchy and consist of an investment in pooled assets and include separate employee accounts that are invested in equity securities, debt securities and real estate. The values of the separate accounts invested are based on values provided by the administrator of the funds that cannot be readily derived from or corroborated by observable market data. The value of the assets is part of the defined benefit plan and included in other non-current liabilities in the Consolidated Balance Sheets at April 30, 2024, January 31, 2024, and April 30, 2023.
There were
Investments Without Readily Determinable Fair Values
From time to time the Company may make minority investments in growth companies in the consumer products sector and other sectors relevant to its business, including certain of the Company's suppliers and customers, as well as in venture capital funds that invest in companies in media, entertainment, information technology and technology-related fields and in digital assets. Through fiscal 2024, the Company invested approximately $
NOTE 8 – COMMITMENTS AND CONTINGENCIES
The Company has minimum commitments related to the Company’s license agreements and endorsement agreements with brand ambassadors, and also includes service agreements. The Company sources, distributes, advertises and sells watches and jewelry pursuant to its exclusive license agreements with unaffiliated licensors. Royalty amounts under the license agreements are generally based on a stipulated percentage of revenues, although most of these agreements contain provisions for the payment of minimum annual royalty amounts. The license agreements have various terms, and some have renewal options, provided that minimum sales levels are achieved. Additionally, the license agreements require the Company to pay minimum annual advertising amounts.
The Company believes that income tax reserves are adequate; however, amounts asserted by taxing authorities could be greater or less than amounts accrued and reflected in the Consolidated Balance Sheet. Accordingly, the Company could record adjustments to the
11
amounts for federal, state, and foreign liabilities in the future as the Company revises estimates or settles or otherwise resolves the underlying matters. In the ordinary course of business, the Company may take new positions that could increase or decrease unrecognized tax benefits in future periods.
In December 2016, U.S. Customs and Border Protection (“U.S. Customs”) issued an audit report concerning the methodology used by the Company to allocate the cost of certain watch styles imported into the U.S. among the component parts of those watches for tariff purposes. The report disputed the reasonableness of the Company’s historical allocation formulas and proposed an alternative methodology that would imply $
The Company is involved in legal proceedings and claims from time to time, in the ordinary course of its business. Legal reserves are recorded in accordance with the accounting guidance for contingencies. Contingencies are inherently unpredictable and it is possible that results of operations, balance sheets or cash flows could be materially and adversely affected in any particular period by unfavorable developments in, or resolution or disposition of, such matters. For those legal proceedings and claims for which the Company believes that it is probable that a reasonably estimable loss may result, the Company records a reserve for the potential loss. For proceedings and claims where the Company believes it is reasonably possible that a loss may result that is materially in excess of amounts accrued for the matter, the Company either discloses an estimate of such possible loss or range of loss or includes a statement that such an estimate cannot be made. As of April 30, 2024, the Company is party to legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations beyond the amounts accrued, or cash flows.
NOTE 9 – INCOME TAXES
The Company recorded an income tax provision of $
The effective tax rate was
At April 30, 2024, the Company had
12
NOTE 10 – EQUITY
The components of equity for the three months ended April 30, 2024 and 2023 are as follows (in thousands):
|
|
|
|
|
|
|
|
Movado Group, Inc. Shareholders' Equity |
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
Preferred |
|
|
Common |
|
|
Common |
|
|
Class A |
|
|
Class A |
|
|
Capital in |
|
|
Retained |
|
|
Accumulated |
|
|
Treasury |
|
|
Noncontrolling |
|
|
Total |
|
|||||||||||
Balance, January 31, 2024 |
|
$ |
— |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||||
Net income attributable to Movado Group, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Dividends ($ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||||||
Stock awards and options exercised |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||||||
Stock repurchases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||||||
Supplemental executive retirement plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net unrealized gain on investments, net of tax provision of $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net change in effective portion of hedging contracts, net of tax provision of $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Amortization of prior service cost, net of tax provision of $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustment (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||||||||
Balance, April 30, 2024 |
|
$ |
— |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Preferred |
|
|
Common |
|
|
Common |
|
|
Class A |
|
|
Class A |
|
|
Capital in |
|
|
Retained |
|
|
Accumulated |
|
|
Treasury |
|
|
Noncontrolling Interest |
|
|
Total |
|
|||||||||||
Balance, January 31, 2023 |
|
$ |
— |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||||
Net income attributable to Movado Group, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Dividends ($ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||||||
Stock awards and options exercised |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||||||||
Stock repurchases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||||||
Supplemental executive retirement plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net unrealized loss on investments, net of tax benefit of ($ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||||||||
Net change in effective portion of hedging contracts, net of tax benefit of ($ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||||||||
Amortization of prior service cost, net of tax provision of $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustment (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||||||
Balance, April 30, 2023 |
|
$ |
— |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||||
13
NOTE 11 – TREASURY STOCK
On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to $
During the three months ended April 30, 2024, the Company repurchased a total of
At April 30, 2024, $
There were
NOTE 12 – ACCUMULATED OTHER COMPREHENSIVE INCOME
The accumulated balances at April 30, 2024 and 2023, and January 31, 2024, related to each component of accumulated other comprehensive income are as follows (in thousands):
|
|
April 30, |
|
|
January 31, |
|
|
April 30, |
|
|||
Foreign currency translation adjustments |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Available-for-sale securities |
|
|
|
|
|
|
|
|
|
|||
Cash flow hedges |
|
|
|
|
|
|
|
|
( |
) |
||
Unrecognized prior service cost related to defined benefit pension plan |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net actuarial loss related to defined benefit pension plan |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total accumulated other comprehensive income |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Amounts reclassified from accumulated other comprehensive income/(loss) to operating income in the Consolidated Statements of Operations during the three months ended April 30, 2024 and April 30, 2023 were $
NOTE 13 – REVENUE
Disaggregation of Revenue
The following table presents the Company’s net sales disaggregated by customer type. Sales and usage-based taxes are excluded from net sales (in thousands):
|
|
For the Three Months Ended |
|
|||||
Customer Type |
|
2024 |
|
|
2023 |
|
||
Wholesale |
|
$ |
|
|
$ |
|
||
Direct to consumer |
|
|
|
|
|
|
||
After-sales service |
|
|
|
|
|
|
||
Net Sales |
|
$ |
|
|
$ |
|
||
The Company’s revenue from contracts with customers is recognized at a point in time. The Company’s net sales disaggregated by geography are based on the location of the Company’s customer (see Note 15 – Segment and Geographic Information).
14
Wholesale Revenue
The Company’s wholesale revenue consists primarily of revenues from independent distributors, department stores, chain stores, independent jewelry stores and third-party e-commerce retailers. The Company recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied, and control is transferred to the customer. Transfer of control passes to wholesale customers upon shipment or upon receipt depending on the agreement with the customer and shipping terms. Wholesale revenue is measured as the amount of consideration the Company ultimately expects to receive in exchange for transferring goods. Wholesale revenue is included entirely within the Watch and Accessory Brands segment (see Note 15 – Segment and Geographic Information), consistent with how management makes decisions regarding the allocation of resources and performance measurement.
Direct to Consumer Revenue
The Company’s direct to consumer revenue primarily consists of revenues from the Company’s outlet stores, the Company’s owned e-commerce websites and concession stores, and consumer repairs. The Company recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied, and control is transferred to the customer. Control passes to outlet store customers at the time of sale and to substantially all e-commerce customers upon shipment. Direct to Consumer revenue is included in either the Watch and Accessory Brands segment or Company Stores Segment based on how the Company makes decisions about the allocation of resources and performance measurement. Revenue derived from outlet stores and related e-commerce is included within the Company Stores Segment. Other Direct to Consumer revenue (i.e., revenue derived from other Company-owned e-commerce websites, concession stores and consumer repairs) is included within the Watch and Accessory Brands segment. (See Note 15 – Segment and Geographic Information).
After-Sales Service
All watches sold by the Company come with limited warranties covering the movement against defects in materials and workmanship.
The Company’s after-sales service revenues consists of out of warranty service provided to customers and authorized third party repair centers, and sale of watch parts. The Company recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied and control is transferred to the customer. After-sales service revenue is measured as the amount of consideration the Company ultimately expects to receive in exchange for transferring goods. Revenue from after sales service, including consumer repairs, is included entirely within the Watch and Accessory Brands segment, consistent with how management makes decisions about the allocation of resources and performance measurement.
NOTE 14 – STOCK-BASED COMPENSATION
Under the Company’s Stock Incentive Plan, as amended and restated as of June 22, 2023 (the “Plan”), the Compensation and Human Capital Committee of the Board of Directors, which consists of three of the Company’s non-employee directors, has the authority to grant participants incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights and stock awards, for up to
Stock Options:
Stock options granted to participants under the Plan generally become exercisable after
The fair value of the stock options, less expected forfeitures, is amortized on a straight-line basis over the vesting term. Total compensation expense for stock option grants recognized during the three months ended April 30, 2024 and 2023 was $
15
The following table summarizes the Company’s stock options activity during the first quarter of fiscal 2025:
|
|
Outstanding |
|
|
Weighted |
|
|
Option |
|
|
Weighted |
|
|
Aggregate |
|
|||||
Options outstanding at January 31, |
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercised |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Expired |
|
|
( |
) |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||
Options outstanding at April 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exercisable at April 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
$ |
|
|||||
Expected to vest at April 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
$ |
|
|||||
Stock Awards:
Under the Plan, the Company can also grant stock awards to employees and directors. For the three months ended April 30, 2024 and 2023, compensation expense for stock awards was $
The following table summarizes the Company’s stock awards activity during the first quarter of fiscal 2025:
|
|
Number of |
|
|
Weighted- |
|
|
Weighted- |
|
Aggregate |
|
|||
Units outstanding at January 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
|||
Units granted |
|
|
|
|
$ |
|
|
|
|
|
|
|||
Units vested |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
||
Units forfeited |
|
|
|
|
|
|
|
|
|
|
|
|||
Units outstanding at April 30, 2024 |
|
|
|
|
$ |
|
|
|
$ |
|
||||
Stock awards granted by the Company can be classified as either time-based stock awards or performance-based stock awards. Time-based stock awards vest over time in the number of shares established at grant date, subject to continued employment. Performance-based stock awards vest over time subject both to continued employment and to the achievement of corporate financial performance goals. Upon the vesting of a stock award, shares are issued from the pool of authorized shares. The number of shares to be issued related to the outstanding performance-based stock awards can vary from
NOTE 15 – SEGMENT AND GEOGRAPHIC INFORMATION
The Company conducts its business in
16
The Company divides its business into
Certain prior year reclassifications have been made to the allocation of geographic revenue between the Middle East and Asia.
Operating Segment Data as of and for the Three Months Ended April 30, 2024 and 2023 (in thousands):
|
|
Net Sales |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Watch and Accessory Brands: |
|
|
|
|
|
|
||
Owned brands category |
|
$ |
|
|
$ |
|
||
Licensed brands category |
|
|
|
|
|
|
||
After-sales service and all other |
|
|
|
|
|
|
||
Total Watch and Accessory Brands |
|
|
|
|
|
|
||
Company Stores |
|
|
|
|
|
|
||
Consolidated total |
|
$ |
|
|
$ |
|
||
|
|
Operating Income |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Watch and Accessory Brands |
|
$ |
|
|
$ |
|
||
Company Stores |
|
|
|
|
|
|
||
Consolidated total |
|
$ |
|
|
$ |
|
||
|
|
Total Assets |
|
|||||||||
|
|
April 30, |
|
|
January 31, |
|
|
April 30, |
|
|||
Watch and Accessory Brands |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Company Stores |
|
|
|
|
|
|
|
|
|
|||
Consolidated total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Geographic Location Data as of and for the Three Months Ended April 30, 2024 and 2023 (in thousands):
|
|
Net Sales |
|
|
Operating (Loss)/Income |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
United States (1) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
International (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
United States and International net sales are net of intercompany sales of $
17
|
|
Total Assets |
|
|||||||||
|
|
April 30, |
|
|
January 31, |
|
|
April 30, |
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
International |
|
|
|
|
|
|
|
|
|
|||
Consolidated total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Property, Plant and Equipment, Net |
|
|||||||||
|
|
April 30, |
|
|
January 31, |
|
|
April 30, |
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
International |
|
|
|
|
|
|
|
|
|
|||
Consolidated total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
Statements in this Quarterly Report on Form 10-Q, including, without limitation, statements under Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report, as well as statements in future filings by the Company with the Securities and Exchange Commission (the “SEC”), in the Company’s press releases and oral statements made by or with the approval of an authorized executive officer of the Company, which are not historical in nature, are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, forecasts and projections about the Company, its future performance, the industry in which the Company operates and management’s assumptions. Words such as “expects”, “anticipates”, “targets”, “goals”, “projects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “will”, “should” and variations of such words and similar expressions are also intended to identify such forward-looking statements. The Company cautions readers that forward-looking statements include, without limitation, those relating to the Company’s future business prospects, projected operating or financial results, revenues, working capital, liquidity, capital needs, inventory levels, plans for future operations, expectations regarding capital expenditures, operating efficiency initiatives and other items, cost savings initiatives, and operating expenses, effective tax rates, margins, interest costs, and income as well as assumptions relating to the foregoing. Forward-looking statements are subject to certain risks and uncertainties, some of which cannot be predicted or quantified. Actual results and future events could differ materially from those indicated in the forward-looking statements, due to several important factors herein identified, among others, and other risks and factors identified from time to time in the Company’s reports filed with the SEC, including, without limitation, the following: general economic and business conditions which may impact disposable income of consumers in the United States and the other significant markets (including Europe) where the Company’s products are sold; uncertainty regarding such economic and business conditions, including inflation, elevated interest rates; increased commodity prices and tightness in the labor market; trends in consumer debt levels and bad debt write-offs; general uncertainty related to geopolitical concerns; the impact of international hostilities, including the Russian invasion of Ukraine and war in the Middle East, on global markets, economies and consumer spending, on energy and shipping costs, and on the Company's supply chain and suppliers; supply disruptions, delivery delays and increased shipping costs; defaults on or downgrades of sovereign debt and the impact of any of those events on consumer spending; evolving stakeholder expectations and emerging complex laws on environmental, social and governance matters; changes in consumer preferences and popularity of particular designs, new product development and introduction; decrease in mall traffic and increase in e-commerce; the ability of the Company to successfully implement its business strategies, competitive products and pricing, including price increases to offset increased costs; the impact of “smart” watches and other wearable tech products on the traditional watch market; seasonality; availability of alternative sources of supply in the case of the loss of any significant supplier or any supplier’s inability to fulfill the Company’s orders; the loss of or curtailed sales to significant customers; the Company’s dependence on key employees and officers; the ability to successfully integrate the operations of acquired businesses without disruption to other business activities; the possible impairment of acquired intangible assets; risks associated with the Company's minority investments in early-stage growth companies and venture capital funds that invest in such companies; the continuation of the Company’s major warehouse and distribution centers; the continuation of licensing arrangements with third parties; losses possible from pending or future litigation and administrative proceedings; the ability to secure and protect trademarks, patents and other intellectual property rights; the ability to lease new stores on suitable terms in desired markets and to complete construction on a timely basis; the ability of the Company to successfully manage its expenses on a continuing basis; information systems failure or breaches of network security; complex and quickly-evolving regulations regarding privacy and data protection; the continued availability to the Company of financing and credit on favorable terms; business disruptions; and general risks associated with doing business internationally including, without limitation, import duties, tariffs (including retaliatory tariffs), quotas, political and economic stability, changes to existing laws or regulations, and impacts of currency exchange rate fluctuations and the success of hedging strategies related thereto.
These risks and uncertainties, along with the risk factors discussed under Item 1A. “Risk Factors” in the Company’s 2024 Annual Report on Form 10-K, should be considered in evaluating any forward-looking statements contained in this report or incorporated by reference herein. All forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are qualified by the cautionary statements in this section. The Company undertakes no obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report.
19
Critical Accounting Policies and Estimates
The Company’s Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and those significant policies are more fully described in Note 1 to the Company’s Consolidated Financial Statements and contained in the Company's 2024 Annual Report on Form 10-K and are incorporated by reference herein. The preparation of these financial statements and the application of certain critical accounting policies require management to make judgments based on estimates and assumptions that affect the information reported. On an on-going basis, management evaluates its estimates and judgments, including those related to sales discounts and markdowns, product returns, bad debt, inventories, income taxes, warranty obligations, useful lives of property, plant and equipment, impairments of long-lived assets, stock-based compensation and contingencies and litigation. Management bases its estimates and judgments about the carrying values of assets and liabilities that are not readily apparent from other sources on historical experience, contractual commitments and on various other factors that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.
Critical accounting policies are those that are most important to the portrayal of the Company’s financial condition and the results of operations and require management’s most difficult, subjective and complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company's most critical accounting policies have been discussed in the Company's 2024 Annual Report on Form 10-K and are incorporated by reference herein. As of April 30, 2024, there have been no material changes to any of the Company’s critical accounting policies.
Overview
The Company conducts its business in two operating segments: Watch and Accessory Brands and Company Stores. The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, of owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Company Stores segment includes the Company’s retail outlet business in the United States and Canada. The Company also operates in two major geographic locations: United States and International, the latter of which includes the results of all non-U.S. Company operations.
The Company divides its watch and accessory business into two principal categories: the owned brands category and the licensed brands category. The owned brands category consists of the Movado®, Concord®, EBEL®, Olivia Burton® and MVMT® brands. Products in the licensed brands category include the following brands manufactured and distributed under license agreements with the respective brand owners: Coach®, Tommy Hilfiger®, Hugo Boss®, Lacoste® and Calvin Klein®.
Gross margins vary among the brands included in the Company’s portfolio and also among watch models within each brand. Watches in the Company’s owned brands category generally earn higher gross margin percentages than watches in the licensed brands category. The difference in gross margin percentages within the licensed brands category is primarily due to the impact of royalty payments made on the licensed brands. Gross margins in the Company’s e-commerce business generally earn higher gross margin percentages than those of the traditional wholesale business. Gross margins in the Company’s outlet business are affected by the mix of product sold and may exceed those of the wholesale business since the Company earns margins on its outlet store sales from manufacture to point of sale to the consumer.
Recent Developments and Initiatives
The Inflation Reduction Act of 2022
In August 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law by President Biden. Among other things, the IR Act implemented a 1% excise tax on the fair market stock repurchases by covered corporations, a 15% minimum tax based on adjusted financial statement income of certain large corporations, and several tax incentives to promote clean energy. Although the Company is continuing to evaluate the IR Act and its potential impact on future periods, to date, the IR Act has not had a material impact on its Consolidated Financial Statements.
The OECD has issued Pillar Two model rules implementing a new global minimum tax of 15%, which is intended to be effective on January 1, 2024. While the U.S. has not yet adopted the Pillar Two rules, several other countries have adopted and enacted changes to their legislation in response to Pillar Two. The Company's turnover currently does not meet the minimum requirements that were set by OECD inclusive framework and rules. Although the Company will continue to evaluate and monitor the enactments of Pillar Two, to the extent that Pillar Two becomes applicable, the Company does not expect a material impact on its Consolidated Financial Statements.
20
Results of Operations Overview
The following is a discussion of the results of operations for the three months ended April 30, 2024 compared to the three months ended April 30, 2023, along with a discussion of the changes in financial condition during the first three months of fiscal 2025. The Company’s results of operations for the first three months of fiscal 2025 should not be deemed indicative of the results that the Company will experience for the full year of fiscal 2025. See “Recent Developments and Initiatives” above. See also “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024 filed with the Securities and Exchange Commission on March 26, 2024.
Net Sales: Comparative net sales by business segment were as follows (in thousands):
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Watch and Accessory Brands: |
|
|
|
|
|
|
||
United States |
|
$ |
39,114 |
|
|
$ |
40,744 |
|
International |
|
|
80,288 |
|
|
|
84,815 |
|
Total Watch and Accessory Brands |
|
|
119,402 |
|
|
|
125,559 |
|
Company Stores: |
|
|
|
|
|
|
||
United States |
|
|
16,450 |
|
|
|
18,465 |
|
International |
|
|
817 |
|
|
|
881 |
|
Total Company Stores |
|
|
17,267 |
|
|
|
19,346 |
|
Net Sales |
|
$ |
136,669 |
|
|
$ |
144,905 |
|
Comparative net sales by categories were as follows (in thousands):
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Watch and Accessory Brands: |
|
|
|
|
|
|
||
Owned brands category |
|
$ |
39,947 |
|
|
$ |
45,132 |
|
Licensed brands category |
|
|
76,357 |
|
|
|
80,207 |
|
After-sales service and all other |
|
|
3,098 |
|
|
|
220 |
|
Total Watch and Accessory Brands |
|
|
119,402 |
|
|
|
125,559 |
|
Company Stores |
|
|
17,267 |
|
|
|
19,346 |
|
Net Sales |
|
$ |
136,669 |
|
|
$ |
144,905 |
|
Net Sales
Net sales for the three months ended April 30, 2024 were $136.7 million, representing an $8.2 million or 5.7% decrease from the prior year period. This decrease is attributable to the Watch and Accessory Brands segment and the Company Stores segment. For the three months ended April 30, 2024, fluctuations in foreign currency exchange rates positively impacted net sales by $0.6 million when compared to the prior year period. Excluding this $0.6 million impact, net sales would have decreased by 6.1% as compared to the prior year period.
Watch and Accessory Brands Net Sales
Net sales for the three months ended April 30, 2024 in the Watch and Accessory Brands segment were $119.4 million, below the prior year period by $6.2 million, or 4.9%. The decrease in net sales was primarily due to decreased volumes resulting from lower demand in the Company's wholesale customers in both the United States and International locations, partially offset by an increase in online retail in the United States locations and the positive impact of fluctuations in foreign exchange rates.
United States Watch and Accessory Brands Net Sales
Net sales for the three months ended April 30, 2024 in the United States locations of the Watch and Accessory Brands segment were $39.1 million, below the prior year period by $1.6 million, or 4.0%, resulting primarily from decreased volumes due to lower demand in the Company's wholesale customers, mainly in the owned brands category, partially offset by an increase in online retail. The net sales recorded in the owned brands category decreased $2.8 million, or 8.7%, partially offset by an increase in net sales recorded in the licensed brand category of $0.2 million, or 2.0%.
21
International Watch and Accessory Brands Net Sales
Net sales for the three months ended April 30, 2024 in the International locations of the Watch and Accessory Brands segment were $80.3 million, below the prior year by $4.5 million, or 5.3%, which included fluctuations in foreign currency exchange rates that positively impacted net sales by $0.6 million when compared to the prior year period. The decrease in net sales was across most brands in both the owned and licensed brand categories primarily due to decreased volumes resulting from lower demand in the Company's wholesale customers, partially offset by the positive impact of fluctuations in foreign currency exchange rates. The net sales decrease recorded in the owned brands category was $2.4 million, or 18.4%, due to net sales decreases across all regions. The net sales decrease in the licensed brands category was $4.0 million, or 5.6%, primarily due to net sales decreases in the Americas (excluding the United States) and Asia, partially offset by net sales increases in the Middle East and Europe.
Company Stores Net Sales
Net sales for the three months ended April 30, 2024 in the Company Stores segment were $17.3 million, $2.1 million or 10.7% below the prior year period. The net sales decrease was primarily due to sales mix in the Company stores and, to a lesser extent, a decrease in sales from the Company's online outlet store at www.movadocompanystore.com. As of April 30, 2024 and 2023, the Company operated 55 retail outlet locations.
Gross Profit
Gross profit for the three months ended April 30, 2024 was $75.5 million or 55.3% of net sales as compared to $82.0 million or 56.6% of net sales in the prior year period. The decrease in gross profit of $6.5 million was primarily due to lower net sales combined with a lower gross margin percentage. The decrease in the gross margin percentage of approximately 130 basis points for the three months ended April 30, 2024 reflected an unfavorable impact of sales mix of approximately 70 basis points, the decreased leveraging of certain fixed costs as a result of lower sales of approximately 60 basis points and a negative impact of fluctuations in foreign exchange rates of approximately 10 basis points, partially offset by decreased shipping costs of approximately 10 basis points.
Selling, General and Administrative (“SG&A”)
SG&A expenses for the three months ended April 30, 2024 were $72.2 million, representing an increase from the prior year period of $1.1 million, or 1.5%. The increase in SG&A expenses was primarily due to an increase in payroll related expenses of $1.3 million partially offset by a decrease of $0.3 million in amortization expense related to certain intangible assets being fully amortized. For the three months ended April 30, 2024, fluctuations in foreign currency rates related to the foreign subsidiaries unfavorably impacted SG&A expenses by $0.2 million when compared to the prior year period.
Watch and Accessory Brands Operating Income
For the three months ended April 30, 2024, the Company recorded operating income of $2.9 million in the Watch and Accessory Brands segment which includes $10.9 million of unallocated corporate expenses as well as $14.2 million of certain intercompany profits related to the Company’s supply chain operations. For the three months ended April 30, 2023, the Company recorded operating income of $8.8 million in the Watch and Accessory Brands segment which included $11.4 million of unallocated corporate expenses as well as $17.3 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of a decrease in gross profit of $5.4 million combined with higher SG&A expenses of $0.5 million when compared to the prior year period. The decrease in gross profit was primarily the result of lower net sales combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of certain fixed costs as a result of lower sales and a negative impact of fluctuations in foreign exchange rates, partially offset by lower shipping costs. The increase in SG&A expenses of $0.5 million was primarily due to an increase in payroll related expenses of $0.9 million partially offset by a decrease of $0.3 million in amortization expense related to certain intangible assets being fully amortized.
U.S. Watch and Accessory Brands Operating Loss
In the United States locations of the Watch and Accessory Brands segment, for the three months ended April 30, 2024, the Company recorded an operating loss of $9.5 million which includes unallocated corporate expenses of $10.9 million. For the three months ended April 30, 2023 the Company recorded an operating loss of $9.0 million in the United States locations of the Watch and Accessory Brands segment which included unallocated corporate expenses of $11.4 million. The increase in operating loss was the result of an increase in SG&A expenses of $0.4 million combined with a decrease in gross profit of $0.1 million when compared to the prior year period. The increase in SG&A expenses of $0.4 million was primarily due to an increase in payroll related expenses of $0.6 million. The decrease in gross profit of $0.1 million was primarily the result of lower net sales, partially offset by a higher gross margin percentage primarily due to the favorable impact of sales mix and lower shipping costs, partially offset by the decreased leveraging of certain fixed costs as a result of lower sales.
22
International Watch and Accessory Brands Operating Income
In the International locations of the Watch and Accessory Brands segment, for the three months ended April 30, 2024, the Company recorded operating income of $12.4 million which includes $14.2 million of certain intercompany profits related to the Company’s International supply chain operations. For the three months ended April 30, 2023 the Company recorded operating income of $17.8 million in the International locations of the Watch and Accessory Brands segment which included $17.3 million of certain intercompany profits related to the Company’s supply chain operations. The decrease in operating income was the result of lower gross profit of $5.3 million combined with higher SG&A expenses of $0.1 million. The decrease in gross profit of $5.3 million was primarily the result of lower net sales, combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of certain fixed costs as a result of lower sales and a negative impact of fluctuations in foreign exchange rates, partially offset by lower shipping costs. The increase in SG&A expenses of $0.1 million was primarily due to an increase in payroll related expenses of $0.3 million offset by a decrease of $0.3 million in amortization expense related to certain intangible assets being fully amortized.
Company Stores Operating Income
The Company recorded operating income of $0.5 million and $2.1 million in the Company Stores segment for the three months ended April 30, 2024 and 2023, respectively. The decrease in operating income of $1.6 million was primarily related to a decrease in gross profit of $1.1 million, mainly due to lower sales, partially offset by a higher gross margin percentage, and higher SG&A expenses of $0.5 million primarily due to an increase in payroll related expenses of $0.4 million. As of April 30, 2024, and 2023, the Company Stores segment operated 55 retail outlet locations.
Other Non-Operating Income, net
The Company recorded other income, net of $2.2 million primarily due to interest income for the three months ended April 30, 2024.
For the three months ended April 30, 2023, the Company recorded other income, net of $1.0 million primarily due to interest income, partially offset by a $0.5 million impairment related to an equity investment in a consumer products company that sold its business and assets in which the Company expects to receive little or no return on its investment.
Interest Expense
Interest expense was $0.1 million primarily due to the payment of unused commitment fees for both the three months ended April 30, 2024 and 2023. There were no borrowings under the Company's revolving credit facility during the three months ended April 30, 2024 and 2023.
Income Taxes
The Company recorded an income tax provision of $2.3 million and $2.5 million for the three months ended April 30, 2024 and 2023, respectively.
The effective tax rate was 42.9% and 21.5% for the three months ended April 30, 2024 and 2023, respectively. The significant components of the effective tax rate changed primarily due to a limitation on a portion of the foreign tax credits and deductions related to the tax on GILTI and no tax benefit being recognized on certain foreign losses.
Net Income Attributable to Movado Group, Inc.
The Company recorded net income attributable to Movado Group, Inc. of $2.9 million and $9.1 million for the three months ended April 30, 2024 and 2023, respectively.
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 2024 and April 30, 2023, the Company had $225.4 million and $198.3 million, respectively, of cash and cash equivalents. Of this total, $155.5 million and $117.9 million, respectively, consisted of cash and cash equivalents at the Company's foreign subsidiaries.
At April 30, 2024 the Company had working capital of $410.3 million as compared to $409.4 million at April 30, 2023. The increase in working capital was primarily the result of an increase in cash, a decrease in income taxes payable and an increase in trade receivables, partially offset by a decrease in inventories and an increase in accounts payable. The Company defines working capital as the difference between current assets and current liabilities.
23
The Company had $18.1 million of cash used in operating activities for the three months ended April 30, 2024 as compared to $21.5 million of cash used in operating activities for the three months ended April 30, 2023. Cash used in operating activities for the three months ended April 30, 2024 included net income of $3.1 million, positively adjusted by $3.5 million related to non-cash items. Cash used in operating activities for the three months ended April 30, 2024 included a $16.0 million increase in investment in inventories primarily due to timing of receipts to align with sales levels and net tax related payments of $8.8 million primarily due to timing. Cash used in operating activities for the three months ended April 30, 2023 was primarily due to an $11.1 million decrease in income taxes payable, a decrease in accrued payroll of $9.8 million primarily as a result of payments of performance-based compensation, an $8.1 million increase in investment in inventories primarily due to timing of receipts and a $7.9 million decrease in accounts payable primarily as a result of timing of payments.
Cash used in investing activities was $4.8 million for the three months ended April 30, 2024 as compared to cash used in investing activities of $2.9 million for the three months ended April 30, 2023. The cash used in the three months ended April 30, 2024 was primarily related to $3.1 million of long-term investments and capital expenditures of $1.6 million primarily due to shop-in-shops and construction in progress mainly related to Company stores. Cash used in investing activities for the three months ended April 30, 2023 was primarily due to $2.3 million of capital expenditures and $0.6 million of long-term investments.
Cash used in financing activities was $9.9 million for the three months ended April 30, 2024 as compared to cash used in financing activities of $30.3 million for the three months ended April 30, 2023. The cash used in the three months ended April 30, 2024 included $7.8 million in dividends paid, $1.1 million in stock repurchased in the open market and $1.0 million of shares repurchased as a result of the surrender of shares in connection with the vesting of certain stock awards. The cash used in the three months ended April 30, 2023 included $29.9 million in dividends paid, which included a special cash dividend of $1.00 per share, and $0.4 million in stock repurchased in the open market.
The Company and its U.S. and Swiss subsidiaries (collectively, the "Borrowers") are parties to an Amended and Restated Credit Agreement originally dated October 12, 2018 (as subsequently amended, the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”). The Credit Agreement provides for a $100.0 million senior secured revolving credit facility (the “Facility”) and has a maturity date of October 28, 2026. The Facility includes a $15.0 million letter of credit subfacility, a $25.0 million swingline subfacility and a $75.0 million sublimit for borrowings by the Swiss Borrower, with provisions for uncommitted increases to the Facility of up to $50.0 million in the aggregate subject to customary terms and conditions. The Credit Agreement contains affirmative and negative covenants binding on the Company and its subsidiaries that are customary for credit facilities of this type, including, but not limited to, restrictions and limitations on the incurrence of debt and liens, dispositions of assets, capital expenditures, dividends and other payments in respect of equity interests, the making of loans and equity investments, mergers, consolidations, liquidations and dissolutions, and transactions with affiliates (in each case, subject to various exceptions).
The borrowings under the Facility are joint and several obligations of the Borrowers and are also cross-guaranteed by each Borrower, except that the Swiss Borrower is not liable for, nor does it guarantee, the obligations of the U.S. Borrowers. In addition, the Borrowers’ obligations under the Facility are secured by first priority liens, subject to permitted liens, on substantially all of the U.S. Borrowers’ assets other than certain excluded assets. The Swiss Borrower does not provide collateral to secure the obligations under the Facility.
As of both April 30, 2024, and April 30, 2023, there were no amounts of loans outstanding under the Facility. Availability under the Facility was reduced by the aggregate number of letters of credit outstanding, issued in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada, totaling approximately $0.3 million at both April 30, 2024 and April 30, 2023. At April 30, 2024, the letters of credit have expiration dates through April 28, 2025. As of both April 30, 2024, and April 30, 2023, availability under the Facility was $99.7 million. For additional information regarding the Facility, see Note 5 – Debt and Lines of Credit to the Consolidated Financial Statements.
The Company had weighted average borrowings under the Facility of zero during both the three months ended April 30, 2024 and 2023.
The Company's Swiss subsidiary maintains unsecured lines of credit with a Swiss bank that are subject to repayment upon demand. As of April 30, 2024, and 2023, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.1 million and $7.3 million, respectively. As of April 30, 2024, and 2023, there were no borrowings against these lines. As of April 30, 2024 and 2023, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.3 million, for both periods, in various foreign currencies, of which $0.7 million and $0.6 million, respectively, was a restricted deposit as it relates to lease agreements.
Cash paid for interest, including unused commitments fees and amortization of debt fees, was $0.1 million for both the three month periods ended April 30, 2024 and April 30, 2023.
24
From time to time the Company may make minority investments in growth companies in the consumer products sector and other sectors relevant to its business, including certain of the Company's suppliers and customers, as well as in venture capital funds that invest in companies in media, entertainment, information technology and technology-related fields and in digital assets. During fiscal 2022, the Company committed to invest up to $21.5 million in such investments. The Company funded approximately $8.4 million of these commitments through fiscal 2024 and an additional $3.1 million during the first quarter of fiscal 2025 and may be called upon to satisfy capital calls in respect of the remaining $10.0 million in such commitments at any time during a period generally ending ten years after the first capital call in respect of a given commitment. One consumer products company in which the Company made an equity investment in fiscal year 2022 sold its business and assets in the first quarter of fiscal 2024 in a transaction that is expected to yield little or no return for equity holders. As a result, the Company fully impaired its $0.5 million investment in this entity in the first quarter of fiscal 2024.
The Company paid cash dividends of $0.35 per share, or $7.8 million, during the three months ended April 30, 2024. During the three months ended April 30, 2023, the Company paid a special cash dividend of $1.00 per share, as well as a quarterly cash dividend of $0.35 per share, for a total amount of $29.9 million. Although the Company currently expects to continue to declare cash dividends in the future, the decision of whether to declare any future cash dividend, including the amount of any such dividend and the establishment of record and payment dates, will be determined, in each quarter, by the Board of Directors, in its sole discretion.
On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to $50.0 million of its outstanding common stock through November 23, 2024, depending on market conditions, share price and other factors. Under the share repurchase program, the Company is permitted to purchase shares of its common stock from time to time through open market purchases, repurchase plans, block trades or otherwise. During the three months ended April 30, 2024, the Company repurchased a total of 39,000 shares of its common stock at a total cost of $1.1 million, or an average of $27.85 per share. At April 30, 2024, $16.8 million remains available for purchase under the Company's November 23, 2021 repurchase program. During the three months ended April 30, 2023, the Company repurchased a total of 14,000 shares of its common stock at a total cost of $0.4 million, or an average of $27.24 per share.
Off-Balance Sheet Arrangements
The Company does not have off-balance sheet financing or unconsolidated special-purpose entities.
Accounting Changes and Recent Accounting Pronouncements
See Note 2- Recent Accounting Pronouncements to the accompanying unaudited Consolidated Financial Statements for a description of recent accounting pronouncements which may impact the Company’s Consolidated Financial Statements in future reporting periods.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Foreign Currency Exchange Rate Risk
The Company’s primary market risk exposure relates to foreign currency exchange risk (see Note 6 – Derivative Financial Instruments to the Consolidated Financial Statements). A significant portion of the Company’s purchases are denominated in Swiss Francs and, to a lesser extent, the Japanese Yen. The Company also sells to third-party customers in a variety of foreign currencies, most notably the Euro, Swiss Franc and the British Pound. The Company reduces its exposure to the Swiss Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rate risk through a hedging program. Under the hedging program, the Company manages most of its foreign currency exposures on a consolidated basis, which allows it to net certain exposures and take advantage of natural offsets. In the event these exposures do not offset, from time to time the Company uses various derivative financial instruments to further reduce the net exposures to currency fluctuations, predominately forward and option contracts. Certain of these contracts meet the requirements of qualified hedges. In these circumstances, the Company designates and documents these derivative instruments as a cash flow hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transactions. Changes in the fair value of hedges designated and documented as a cash flow hedge and which are highly effective, are recorded in other comprehensive income until the underlying transaction affects earnings, and then are later reclassified into earnings in the same account as the hedged transaction. The earnings impact is mostly offset by the effects of currency movements on the underlying hedged transactions. To the extent that the Company does not engage in a hedging program, any change in the Swiss Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rates to local currency would have an equal effect on the Company’s earnings.
From time to time the Company uses forward exchange contracts, which do not meet the requirements of qualified hedges, to offset its exposure to certain foreign currency receivables and liabilities. These forward contracts are not designated as qualified hedges and, therefore, changes in the fair value of these derivatives are recognized in earnings in the period they arise, thereby offsetting the current earnings effect resulting from the revaluation of the related foreign currency receivables and liabilities.
25
As of April 30, 2024, the Company’s entire net forward contracts hedging portfolio consisted of 2.8 million Chinese Yuan equivalent, 22.0 million Swiss Francs equivalent, 22.2 million U.S. dollars equivalent, 18.2 million Euros equivalent (including 6.0 million Euros designated as cash flow hedges) and 1.2 million British Pounds equivalent with various expiry dates ranging through October 3, 2024, compared to a portfolio of 24.7 million Chinese Yuan equivalent, 24.0 million Swiss Francs equivalent, 17.1 million U.S. dollars equivalent, 38.4 million Euros equivalent (including 21.0 million Euros designated as cash flow hedges) and 2.8 million British Pounds equivalent with various expiry dates ranging through September 14, 2023, as of April 30, 2023. If the Company were to settle its Swiss Franc forward contracts at April 30, 2024, the result would be a $0.7 million loss. If the Company were to settle its Euro forward contracts at April 30, 2024, the result would be a $0.1 million gain. As of April 30, 2024, the Company’s British Pound, Chinese Yuan and US Dollar forward contracts had no gain or loss.
Commodity Risk
The Company considers its exposure to fluctuations in commodity prices to be primarily related to gold used in the manufacturing of the Company’s watches. Under its hedging program, the Company can purchase various commodity derivative instruments, primarily futures contracts. When held, these derivatives are documented as qualified cash flow hedges, and the resulting gains and losses on these derivative instruments are first reflected in other comprehensive income, and later reclassified into earnings, partially offset by the effects of gold market price changes on the underlying actual gold purchases. The Company did not hold any future contracts in its gold hedge portfolio as of April 30, 2024 and 2023; thus, any changes in the gold purchase price will have an equal effect on the Company’s cost of sales.
Debt and Interest Rate Risk
Floating rate debt at April 30, 2024 and 2023 was zero for both periods. During the three months ended April 30, 2024, the Company had no weighted average borrowings. The Company does not hedge these interest rate risks.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, it should be noted that a control system, no matter how well conceived or operated, can only provide reasonable, not absolute, assurance that its objectives will be met and may not prevent all errors or instances of fraud.
The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such terms are defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective at a reasonable assurance level as of the end of the period covered by this report.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended April 30, 2024, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in legal proceedings and claims from time to time, in the ordinary course of its business. Legal reserves are recorded in accordance with the accounting guidance for contingencies. Contingencies are inherently unpredictable and it is possible that results of operations, balance sheets or cash flows could be materially and adversely affected in any particular period by unfavorable developments in, or resolution or disposition of, such matters. For those legal proceedings and claims for which the Company believes that it is probable that a reasonably estimable loss may result, the Company records a reserve for the potential loss. For proceedings and claims where the Company believes it is reasonably possible that a loss may result that is materially in excess of amounts accrued for the matter, the Company either discloses an estimate of such possible loss or range of loss or includes a statement that such an estimate cannot be made.
In December 2016, U.S. Customs and Border Protection (“U.S. Customs”) issued an audit report concerning the methodology used by the Company to allocate the cost of certain watch styles imported into the U.S. among the component parts of those watches for tariff purposes. The report disputed the reasonableness of the Company’s historical allocation formulas and proposed an alternative methodology that would imply $5.1 million in underpaid duties for all imports that entered the United States during the audit period which extended from August 1, 2011 through July 15, 2016, plus possible penalties and interest. Although the Company believes that U.S. Customs’ alternative duty methodology and estimate are not consistent with the Company’s facts and circumstances and has consistently disputed U.S. Customs’ position, the Company established reserves for a portion of the alleged underpayment indicated in the audit report. Between February 2017 and January 2021, the Company made numerous submissions to U.S. Customs containing supplemental analyses and information in response to U.S. Customs’ information requests. On May 1, 2023, the statute of limitations lapsed with respect to all entries encompassed by the audit period. As a result, during the second quarter of fiscal 2024, the Company released the reserves that it had established in respect of those entries.
In addition to the above matters, the Company is involved in other legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations, or cash flows.
Item 1A. Risk Factors
As of April 30, 2024, there have been no material changes to any of the risk factors previously reported in the Company’s 2024 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to $50.0 million of its outstanding common stock from time to time through November 23, 2024, depending on market conditions, share price and other factors. Under the share repurchase program, the Company is permitted to purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. During the three months ended April 30, 2024, the Company repurchased a total of 39,000 shares of its common stock at a total cost of $1.1 million, or an average of $27.85 per share.
At the election of an employee, upon the vesting of a stock award or the exercise of a stock option, shares of common stock having an aggregate value on the vesting of the award or the exercise date of the option, as the case may be, equal to the employee’s withholding tax obligation may be surrendered to the Company by netting them from the vested shares issued. Similarly, shares having an aggregate value equal to the exercise price of an option may be tendered to the Company in payment of the option exercise price and netted from the shares of common stock issued upon the option exercise. An aggregate of 37,859 shares were repurchased during the three months ended April 30, 2024 as a result of the surrender of shares of common stock in connection with the vesting of restricted stock awards or stock options.
27
The following table summarizes information about the Company’s purchases for the three months ended April 30, 2024 of equity securities that are registered by the Company pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:
Issuer Repurchase of Equity Securities
Period |
|
Total |
|
|
Average |
|
|
Total |
|
|
Maximum |
|
||||
February 1, 2024 – February 29, 2024 |
|
|
20,352 |
|
|
$ |
28.28 |
|
|
|
20,000 |
|
|
$ |
17,307,201 |
|
March 1, 2024 – March 31, 2024 |
|
|
19,000 |
|
|
|
27.40 |
|
|
|
19,000 |
|
|
|
16,786,673 |
|
April 1, 2024 – April 30, 2024 |
|
|
37,507 |
|
|
|
27.93 |
|
|
|
— |
|
|
|
16,786,673 |
|
Total |
|
|
76,859 |
|
|
$ |
27.89 |
|
|
|
39,000 |
|
|
$ |
16,786,673 |
|
Item 5. Other Information
During the quarterly period ended April 30, 2024, none of the Company's directors or officers informed the Company of the
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Item 6. Exhibits
31.1 |
|
|
|
|
|
31.2 |
|
|
|
|
|
32.1 |
|
|
|
|
|
32.2 |
|
|
|
|
|
101 |
|
The following financial information from Movado Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2024 filed with the SEC, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements. XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. |
|
|
|
104 |
|
Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL). |
29
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
MOVADO GROUP, INC. |
|
|
|
|
|
Dated: May 30, 2024 |
|
By: |
|
/s/ Linda Feeney |
|
|
|
|
Linda Feeney Senior Vice President, Principal Accounting Officer (duly authorized signatory and principal accounting officer) |
30