Luxury watch company Movado (NYSE:MOV) announced better-than-expected revenue in Q2 CY2026, with sales up 4.9% year on year to $169.8 million. Its GAAP profit of $0.53 per share was 50.4% above analysts’ consensus estimates.
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Movado (MOV) Q2 CY2026 Highlights:
- Revenue: $169.8 million vs analyst estimates of $164.2 million (4.9% year-on-year growth, 3.4% beat)
- EPS (GAAP): $0.53 vs analyst estimates of $0.35 (50.4% beat)
- Operating Margin: 8.8%, up from 3% in the same quarter last year
- Market Capitalization: $564.2 million
StockStory’s Take
Movado delivered a quarter that exceeded Wall Street’s revenue and profit expectations, supported by a mix of product innovation and strategic pricing initiatives. Management attributed the sales momentum to strength across both the U.S. and key international markets, with particularly strong results in Latin America and India. CEO Efraim Grinberg highlighted that “consumer demand remains healthy, especially among younger buyers engaging with traditional watches.” Gross margin improvements were aided by a favorable business mix, reduced promotional activity, and temporary benefits from tariff refunds.
Looking forward, Movado’s leadership pointed to continued investment in new product development, digital marketing, and brand storytelling as core growth drivers. Management emphasized plans to expand offerings for younger consumers and capitalize on renewed interest in traditional watches. CFO Sallie DeMarsilis noted that gross margins are expected to step down in the second half as the benefit from lower-duty inventory fades, but the company remains focused on long-term profitability. Grinberg added, “We are encouraged by the momentum in our business and excited about upcoming launches and campaigns.”
Key Insights from Management’s Remarks
Management credited the quarter’s performance to product launches resonating with younger consumers, strong digital engagement, and pricing actions that supported margins despite higher shipping costs.
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Product innovation resonating: Movado saw strong demand for recently launched collections, particularly among younger consumers. The Baby Face mini strap watch sold out quickly, and new offerings from brands like Coach and Tommy Hilfiger continued to attract Gen Z buyers.
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Digital marketing and storytelling: The company elevated brand engagement through targeted digital campaigns, celebrating Movado’s 145th anniversary and leveraging celebrity ambassadors to connect with new audiences. Digital content and e-commerce sales outperformed, with movado.com sales rising 8%.
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Geographic strength and challenges: U.S. sales rose, with key international markets like Latin America and India delivering robust growth. However, the Middle East remained soft due to reduced tourism and regional unrest, partially offsetting gains elsewhere.
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Margin expansion drivers: Gross margin improvements were driven by higher average selling prices, reduced promotional activity, and a favorable mix of inventory following the repeal of IEEPA tariffs. Temporary benefits from duty refunds and legacy inventory further supported margins this quarter.
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Supply chain and cost pressures: Increased shipping costs, including fuel surcharges linked to Middle East tensions and higher e-commerce activity, partly offset margin gains. Management indicated these factors are accounted for in the outlook for the second half.
Drivers of Future Performance
Movado’s outlook is shaped by ongoing product innovation, evolving consumer trends, and temporary margin headwinds as tariff benefits recede.
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Reduced margin tailwinds: Management expects gross margins to decrease in the second half as the benefit from lower-duty inventory and IEEPA duty refunds dissipates. CFO Sallie DeMarsilis stated that margins will return to a more typical range, with 55% to 56% targeted for the remainder of the year.
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Continued investment in youth-focused products: New launches and marketing initiatives aimed at younger consumers remain a key priority, with management highlighting the importance of connecting with Gen Z through both product design and digital engagement. The upcoming introduction of Kate Spade watches is expected to broaden Movado’s appeal.
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Potential shipping and cost headwinds: Elevated shipping expenses, driven by higher fuel costs and increased e-commerce volumes, could pressure margins. Management is actively seeking to manage these costs but acknowledges that global supply chain disruptions remain a risk.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) whether Movado can sustain demand for new product launches among younger consumers, (2) the company’s ability to manage gross margin as temporary tariff benefits phase out, and (3) the execution and impact of digital marketing campaigns tied to major brand anniversaries and new partnerships. Ongoing geopolitical and supply chain developments will also be closely monitored for cost implications.
Movado currently trades at $34.69, in line with $34.96 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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