MOV

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: the Company's ability to maintain effective internal control over financial reporting in the future; 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 and 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 increase of tariffs and other trade barriers; 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 including long-lived 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, including cybersecurity risks posed by increasing reliance on cloud services and generative artificial intelligence; complex and quickly-evolving regulations regarding privacy and data protection; regulatory restrictions and a changing marketing environment, including the movement toward a cookieless future and increased digital advertising costs; requirements to meet environmental, social and governance regulations, expectations or standards, including climate change-related risks and regulatory requirements; the impact of current or future cost reduction, streamlining, restructuring or business optimization initiatives; risks associated with laws and regulations relating to supply chain transparency and forced labor; changes to existing laws or regulations, including changes to tax laws or regulations; 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 and the potential imposition of tariffs under alternative statutory authorities), quotas, political and economic stability, anti-corruption and anti-bribery laws, 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 2026 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. 23 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 2026 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 returns, markdown allowances, inventories, income taxes, useful lives of property, plant and equipment, impairments of long-lived assets and stock-based compensation. 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 disclosed in the Company's 2026 Annual Report on Form 10-K and are incorporated by reference herein. As of July 31, 2026, 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®, Calvin Klein® and, beginning spring 2027, Kate Spade New York®. 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 Tariffs The United States has imposed, and may in the future impose, additional tariffs and other trade restrictions on imported goods. These measures increase the Company’s product and input costs, disrupt sourcing and logistics, require pricing adjustments that may reduce demand, and adversely affect margins and operating performance. Because the United States is the Company’s single largest market, increases in duties applicable to products imported into the United States could have a disproportionate impact on the Company’s results of operations. The majority of the Company’s products are sourced from Switzerland, Japan, and China. For U.S. customs purposes, the Company’s Swiss watches are classified as products of Switzerland. Watches produced in the Far East generally consist of watch heads that originate in Japan and bands that originate in China. In addition, most of the Company’s jewelry and packaging is of Chinese origin. Since February 2020, the Company’s U.S. imports of Chinese-origin watch bands and jewelry have been subject to a special incremental tariff of 7.5% under Section 301 of the Trade Act of 1974, and imports of Chinese-origin packaging have been subject to a 25% Section 301 tariff. 24 In fiscal year 2026, the United States imposed additional “reciprocal” and other tariffs under the International Emergency Economic Powers Act (“IEEPA”). These tariffs were invalidated by the Supreme Court in February 2026. The Company paid approximately $10.0 million in IEEPA tariffs between February 2025 and February 2026. During the second quarter of fiscal 2027, the Company received approximately $3.2 million of refunds of previously paid IEEPA tariffs, which was recognized as a benefit to cost of sales during the quarter. The Company continues to pursue potential recoveries of the remaining amounts following recent court rulings and U.S. Customs and Border Protection (“CBP”) guidance. The Company has elected to apply a gain contingency model in accordance with ASC 450-30, Gain Contingencies, to account for potential recoveries of previously paid IEEPA tariffs. Under this model, a gain contingency is not recognized in the Consolidated Financial Statements until the gain is realized or realizable, which is at the earlier of when CBP affirms the Company’s refund claim or the refund is received in cash. Following the Supreme Court's February 2026 decision invalidating the use of IEEPA by the Trump Administration, the Administration imposed a temporary 10% ad valorem import surcharge under Section 122 of the Trade Act of 1974, subject to certain exemptions, which remained in effect through July 24, 2026. In May 2026, the U.S. Court of International Trade ruled that the Section 122 tariffs were also invalid. The Company has not recorded a receivable related to Section 122 tariffs paid by it during the first six months of fiscal 2027 and continues to monitor ongoing litigation related to the potential recovery of these tariffs. Upon expiration of the Section 122 surcharge in July 2026, the Administration imposed new tariffs under Section 301 of the Trade Act of 1974 following investigations concerning the failure of certain U.S. trading partners to impose and effectively enforce prohibitions on imports produced with forced labor. Of greatest relevance to the Company, the new Section 301 measures generally impose an additional 12.5% duty on covered imports from China and, with respect to covered imports from Switzerland and Japan, impose additional duties designed to bring the combined applicable most-favored-nation duty and the new Section 301 duty to 12.5%. These measures operate in addition to certain other tariffs that remain in effect, including the pre-existing Section 301 tariffs mentioned above that are applicable to certain imports from China. As a result, the aggregate duties applicable to particular Company imports vary depending on the country of origin, tariff classification and applicability of other tariff measures or exemptions. The Administration has also initiated or continued other trade investigations that could result in additional tariffs or other changes to the duties applicable to the Company's U.S. imports. The ultimate scope, duration and impact of these and any future tariff measures remain uncertain. Cost-Savings Initiative As part of its ongoing efforts to align operating expenses with current business trends, the Company implemented cost-savings initiatives in fiscal year 2025 focused primarily on workforce reductions and certain lease-related actions. In connection with these initiatives, the Company recorded total accruals of $6.1 million for severance, employee-related costs and lease termination-related charges through fiscal year 2026. During the first six months of fiscal year 2027, the Company paid $0.3 million related to severance and employee-related costs, with the remaining $0.5 million balance expected to be paid during the remainder of fiscal year 2027. One Big Beautiful Bill Act On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law by President Trump. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact on the Company's Consolidated Financial Statements for fiscal 2026 and the first six months of fiscal 2027. Results of Operations Overview The following is a discussion of the results of operations for the three and six months ended July 31, 2026 compared to the three and six months ended July 31, 2025, along with a discussion of the changes in financial condition during the first six months of fiscal 2027. The Company’s results of operations for the first six months of fiscal 2027 should not be deemed indicative of the results that the Company will experience for the full year of fiscal 2027. 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, 2026 filed with the Securities and Exchange Commission on March 19, 2026. 25 Results of operations for the three months ended July 31, 2026 as compared to the three months ended July 31, 2025 Net Sales: Comparative net sales by business segment were as follows (in thousands): Three Months Ended July 31, 2026 2025 Watch and Accessory Brands: United States $ 47,452 $ 44,793 International 95,407 90,884 Total Watch and Accessory Brands 142,859 135,677 Company Stores: United States 25,403 24,636 International 1,490 1,516 Total Company Stores 26,893 26,152 Net Sales $ 169,752 $ 161,829 Comparative net sales by categories were as follows (in thousands): Three Months Ended July 31, 2026 2025 Watch and Accessory Brands: Owned brands category $ 42,399 $ 42,120 Licensed brands category 100,693 92,419 Other (233 ) 1,138 Total Watch and Accessory Brands 142,859 135,677 Company Stores 26,893 26,152 Net Sales $ 169,752 $ 161,829 Net Sales Net sales for the three months ended July 31, 2026 were $169.8 million, representing a $7.9 million or 4.9% increase from the prior year period. For the three months ended July 31, 2026, fluctuations in foreign currency exchange rates positively impacted net sales by $0.7 million when compared to the prior year period. Excluding this $0.7 million impact, net sales would have increased by 4.4% as compared to the prior year period. Watch and Accessory Brands Net Sales Net sales for the three months ended July 31, 2026 in the Watch and Accessory Brands segment were $142.9 million, above the prior year period by $7.2 million, or 5.3%. The increase in net sales was primarily due to increased volumes resulting from higher demand in the Company's wholesale customers, a favorable sales mix and the positive impact of fluctuations in foreign exchange rates. The net sales in the owned brands category increased $0.3 million, or 0.7%, combined with an increase in net sales recorded in the licensed brands category of $8.3 million, or 9.0%. United States Watch and Accessory Brands Net Sales Net sales for the three months ended July 31, 2026 in the United States locations of the Watch and Accessory Brands segment were $47.5 million, above the prior year period by $2.7 million, or 5.9%, resulting primarily from increased volumes resulting from higher demand in the Company's wholesale customers and a favorable sales mix. The net sales recorded in the owned brands category increased $0.7 million, or 2.3%, combined with an increase in net sales recorded in the licensed brands category of $2.5 million, or 21.3%. International Watch and Accessory Brands Net Sales Net sales for the three months ended July 31, 2026 in the International locations of the Watch and Accessory Brands segment were $95.4 million, above the prior year by $4.5 million, or 5.0%, which included fluctuations in foreign currency exchange rates that positively impacted net sales by $0.7 million when compared to the prior year period. In addition to the positive impact of fluctuations 26 in foreign exchange rates, the increase in net sales was primarily due to increased volumes resulting from higher demand in the licensed brands category in the Company's wholesale customers. There was a net sales increase recorded in the licensed brands category of $5.7 million, or 7.1%, due to net sales increases across all regions. This increase was partially offset by a net sales decrease recorded in the owned brands category of $0.4 million, or 4.5%, primarily due to net sales decreases in Europe and the Middle East, partially offset by net sales increases in the Americas (excluding the United States) and Asia. Company Stores Net Sales Net sales for the three months ended July 31, 2026 in the Company Stores segment were $26.9 million, $0.7 million or 2.8% above the prior year period. The net sales increase was primarily due to a favorable sales mix, partially offset by a decrease in sales from the Company's online outlet store at www.movadocompanystore.com. As of July 31, 2026 and 2025, the Company operated 57 retail outlet locations. Gross Profit Gross profit for the three months ended July 31, 2026 was $100.8 million or 59.4% of net sales as compared to $87.6 million or 54.1% of net sales in the prior year period. Gross profit for the three months ended July 31, 2026 included $3.2 million of IEEPA duty refunds received. The increase in gross profit of $13.3 million was due to higher net sales combined with a higher gross margin percentage. The increase in the gross margin percentage of approximately 530 basis points for the three months ended July 31, 2026 reflected a favorable sales mix (approximately 380 basis points), IEEPA duty refunds received (approximately 190 basis points) and the positive impact of fluctuations in foreign exchange rates (approximately 30 basis points), partially offset by higher shipping costs (approximately 50 basis points) and higher fixed costs net of increased leveraging over higher sales (approximately 20 basis points). Selling, General and Administrative (“SG&A”) SG&A expenses for the three months ended July 31, 2026 were $85.9 million, an increase from the prior year period of $2.4 million, or 2.9%. The increase in SG&A expenses was primarily driven by (i) an increase in performance-based compensation of $1.8 million, (ii) an increase in marketing expenses of $1.1 million and (iii) a $0.3 million increase in payroll-related expenses. The increase in payroll-related expenses was net of $0.9 million of severance costs incurred in the prior year period in connection with the cost-savings initiative discussed under “Recent Developments and Initiatives”. These increases were partially offset by a $1.1 million decrease in professional fees, which included a decrease of $1.9 million in costs related to the investigation of misconduct within the Dubai branch of the Company's Swiss subsidiary. For the three months ended July 31, 2026, fluctuations in foreign currency rates related to the foreign subsidiaries increased reported SG&A expenses by $1.0 million when compared to the prior year period. Watch and Accessory Brands Operating Income/Loss For the three months ended July 31, 2026 the Company recorded operating income of $10.2 million in the Watch and Accessory Brands segment, compared to an operating loss of $0.2 million in the prior period. Operating results for the three months ended July 31, 2026 included $13.9 million of unallocated corporate expenses and $14.6 million of certain intercompany profits related to the Company’s supply chain operations, compared to $10.7 million and $14.6 million, respectively, in the prior year period. The $10.4 million improvement in operating income/loss was the result of an increase in gross profit of $12.8 million (which includes $3.2 million of IEEPA duty refunds received), partially offset by higher SG&A expenses of $2.4 million when compared to the prior year period. The increase in gross profit was the result of higher net sales combined with a higher gross margin percentage primarily due to a favorable impact of sales mix, IEEPA duty refunds received and the positive impact of fluctuations in foreign exchange rates, partially offset by higher shipping costs and higher fixed costs net of increased leveraging over higher sales. The increase in SG&A expenses was primarily driven by (i) an increase in performance-based compensation of $1.8 million, (ii) an increase in marketing expenses of $1.4 million and (iii) an increase in payroll related expenses of $0.1 million. The increase in payroll-related expenses was net of $0.9 million of severance costs incurred in the prior year period in connection with the cost-savings initiative. These increases were partially offset by a $1.1 million decrease in professional fees (which included a decrease of $1.9 million in costs related to the investigation of misconduct within the Dubai branch). 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 July 31, 2026, the Company recorded an operating loss of $7.7 million, compared to an operating loss of $17.0 million in the prior period. Operating results for the three months ended July 31, 2026 included unallocated corporate expenses of $13.9 million, compared to $10.7 million in the prior period. The decrease in operating loss was the result of an increase in gross profit of $9.6 million (which includes $3.2 million of IEEPA duty refunds received), partially offset by an increase in SG&A expenses of $0.4 million when compared to the prior year period. The increase in gross profit of $9.6 million was the result of higher net sales, combined with a higher gross margin percentage primarily due to a favorable sales mix and IEEPA duty refunds received, partially offset by higher shipping costs and higher fixed costs net of increased leveraging over higher sales. The increase in SG&A expenses was primarily due to (i) an increase in performance-based compensation of $1.5 million and (ii) higher marketing expenses of $0.3 million. These increases were offset by a $1.0 million decrease in professional 27 fees (which included a decrease of $1.9 million in costs related to the investigation of misconduct within the Dubai branch) and a decrease in payroll related expenses of $0.6 million (which included $0.3 million of severance costs incurred in the prior year period in connection with the cost-savings initiative). International Watch and Accessory Brands Operating Income In the International locations of the Watch and Accessory Brands segment, for the three months ended July 31, 2026, the Company recorded operating income of $18.0 million, compared to operating income of $16.8 million in the prior period. Operating results for the three months ended July 31, 2026 included certain intercompany profits related to the Company’s International supply chain operations of $14.6 million, compared to $14.6 million in the prior period. The increase in operating income was the result of an increase in gross profit of $3.2 million, partially offset by an increase in SG&A expenses of $2.0 million. The increase in gross profit of $3.2 million was primarily the result of higher net sales, combined with a higher gross margin percentage primarily due to favorable sales mix, the positive impact of fluctuations in foreign exchange rates and the increased leveraging of certain reduced costs over higher sales, partially offset by higher shipping costs. The increase in SG&A expenses was primarily due to (i) higher marketing expenses of $1.1 million, (ii) an increase in payroll related expenses of $0.7 million (the increase in payroll related expenses was net of $0.6 million of severance costs incurred in the prior year period in connection with the cost-savings initiative) and (iii) an increase in performance-based compensation of $0.3 million. Company Stores Operating Income The Company recorded operating income of $4.6 million and $4.2 million in the Company Stores segment for the three months ended July 31, 2026 and 2025, respectively. The increase in operating income of $0.4 million was primarily related to an increase in gross profit of $0.5 million, mainly due to higher sales combined with a higher gross margin percentage. SG&A expenses remained relatively flat as compared to the prior year period with an increase in payroll related expenses offset by lower marketing expenses. As of July 31, 2026, and 2025, the Company Stores segment operated 57 retail outlet locations. Other Non-Operating Income, net The Company recorded other income, net of $1.3 million for the three months ended July 31, 2026, primarily due to interest income. The Company recorded other income, net of $1.2 million for the three months ended July 31, 2025, primarily due to interest income, partially offset by a non-cash impairment charge of $0.4 million related to one of its investments in a venture capital fund in which the Company has a limited partnership interest. The write-down was a result of a decline in the fair value of the investment primarily attributable to a deterioration in the financial condition and operating performance of certain of the underlying portfolio companies within the fund that was determined to be other than temporary. Interest Expense Interest expense was $0.1 million primarily due to the payment of unused commitment fees for both the three months ended July 31, 2026 and 2025. There were no borrowings under the Company's revolving credit facility during the three months ended July 31, 2026 and 2025. Income Taxes The Company recorded an income tax provision of $3.5 million and $2.0 million for the three months ended July 31, 2026 and 2025, respectively. The effective tax rate was 22.1% and 38.5% for the three months ended July 31, 2026 and 2025, respectively. The significant components of the effective tax rate for the three month period changed primarily due to an increase in the utilization of foreign tax credits related to Net Controlled Foreign Corporation Tested Income and changes in certain foreign valuation allowances, partially offset by changes in jurisdictional earnings. Net Income Attributable to Movado Group, Inc. The Company recorded net income attributable to Movado Group, Inc. of $12.3 million and $3.0 million for the three months ended July 31, 2026 and 2025, respectively. 28 Results of operations for the six months ended July 31, 2026 as compared to the six months ended July 31, 2025 Net Sales: Comparative net sales by business segment were as follows (in thousands): Six Months Ended July 31, 2026 2025 Watch and Accessory Brands: United States $ 89,178 $ 83,369 International 177,380 167,110 Total Watch and Accessory Brands 266,558 250,479 Company Stores: United States 43,133 40,760 International 2,463 2,359 Total Company Stores 45,596 43,119 Net Sales $ 312,154 $ 293,598 Comparative net sales by categories were as follows (in thousands): Six Months Ended July 31, 2026 2025 Watch and Accessory Brands: Owned brands category $ 78,009 $ 75,252 Licensed brands category 186,190 172,662 Other 2,359 2,565 Total Watch and Accessory Brands 266,558 250,479 Company Stores 45,596 43,119 Net Sales $ 312,154 $ 293,598 Net Sales Net sales for the six months ended July 31, 2026 were $312.2 million, representing an $18.6 million or 6.3% increase from the prior year period. For the six months ended July 31, 2026, fluctuations in foreign currency exchange rates positively impacted net sales by $5.4 million when compared to the prior year period. Excluding this $5.4 million impact, net sales would have increased by 4.5% as compared to the prior year period. Watch and Accessory Brands Net Sales Net sales for the six months ended July 31, 2026 in the Watch and Accessory Brands segment were $266.6 million, above the prior year period by $16.1 million, or 6.4%. The increase in net sales was primarily due to increased volumes resulting from higher demand in the Company's wholesale customers, a favorable sales mix and the positive impact of fluctuations in foreign exchange rates. The net sales in the owned brands category increased $2.8 million, or 3.7%, combined with an increase in net sales recorded in the licensed brands category of $13.5 million, or 7.8%. United States Watch and Accessory Brands Net Sales Net sales for the six months ended July 31, 2026 in the United States locations of the Watch and Accessory Brands segment were $89.2 million, above the prior year period by $5.8 million, or 7.0%, resulting primarily from increased volumes resulting from higher demand in the Company's wholesale customers and a favorable sales mix. The net sales recorded in the owned brands category increased $2.1 million, or 3.6%, combined with an increase in net sales recorded in the licensed brands category of $4.4 million, or 18.5%. 29 International Watch and Accessory Brands Net Sales Net sales for the six months ended July 31, 2026 in the International locations of the Watch and Accessory Brands segment were $177.4 million, above the prior year by $10.3 million, or 6.1%, which included fluctuations in foreign currency exchange rates that positively impacted net sales by $5.4 million when compared to the prior year period. In addition to the positive impact of fluctuations in foreign exchange rates, the increase in net sales was primarily due to increased volumes resulting from higher demand in the licensed brands category in the Company's wholesale customers. The net sales increase recorded in the licensed brands category was $9.1 million, or 6.1%, primarily due to net sales increases in Europe, the Americas (excluding the United States) and Asia, partially offset by a net sales decrease in the Middle East. The net sales increase recorded in the owned brands category was $0.7 million, or 3.9%, primarily due to net sales increases in Asia, the Americas (excluding the United States) and the Middle East, partially offset by a net sales decrease in Europe. Company Stores Net Sales Net sales for the six months ended July 31, 2026 in the Company Stores segment were $45.6 million, $2.5 million or 5.7% above the prior year period. The net sales increase was primarily due to a favorable sales mix, an increase in sales from the Company's online outlet store at www.movadocompanystore.com and a new store opening in the second quarter of the prior year. As of July 31, 2026 and 2025, the Company operated 57 retail outlet locations. Gross Profit Gross profit for the six months ended July 31, 2026 was $182.4 million or 58.4% of net sales as compared to $158.9 million or 54.1% of net sales in the prior year period. Gross profit for the six months ended July 31, 2026 included $3.2 million of IEEPA duty refunds received. The increase in gross profit of $23.5 million was due to higher net sales combined with a higher gross margin percentage. The increase in the gross margin percentage of approximately 430 basis points for the six months ended July 31, 2026 reflected a favorable sales mix (approximately 330 basis points), IEEPA duty refunds received (approximately 100 basis points) and the increased leveraging of certain reduced costs over higher sales (approximately 20 basis points), partially offset by higher shipping costs (approximately 20 basis points). Selling, General and Administrative (“SG&A”) SG&A expenses for the six months ended July 31, 2026 were $160.5 million, an increase from the prior year period of $5.9 million, or 3.8%. The increase in SG&A expenses was primarily driven by (i) an increase in performance-based compensation of $2.7 million, (ii) an increase in marketing expenses of $2.5 million, (iii) higher professional fees of $0.6 million (the increase in professional fees was net of a $1.5 million decrease in costs incurred related to the investigation of misconduct within the Dubai branch) and (iv) an increase in payroll related expenses of $0.1 million. The increase in payroll-related expenses was net of $1.5 million of severance costs incurred in the prior year period in connection with the cost-savings initiative. These increases were partially offset by a $0.7 million decrease in foreign exchange losses reflecting lower transactional foreign currency losses during the period. For the six months ended July 31, 2026, fluctuations in foreign currency rates related to the foreign subsidiaries increased reported SG&A expenses by $1.5 million when compared to the prior year period. Watch and Accessory Brands Operating Income/Loss For the six months ended July 31, 2026 the Company recorded operating income of $16.9 million in the Watch and Accessory Brands segment, compared to an operating loss of $0.2 million in the prior period. Operating results for the six months ended July 31, 2026 included $25.4 million of unallocated corporate expenses and $27.5 million of certain intercompany profits related to the Company’s supply chain operations, compared to $18.7 million and $28.6 million, respectively, in the prior year period. The $17.0 million change in operating income/loss was the result of an increase in gross profit of $22.2 million (which includes $3.2 million of IEEPA duty refunds received), partially offset by higher SG&A expenses of $5.2 million when compared to the prior year period. The increase in gross profit was the result of higher net sales combined with a higher gross margin percentage primarily due to a favorable impact of sales mix, IEEPA duty refunds received and the increased leveraging of certain reduced costs over higher sales, partially offset by higher shipping costs. The increase in SG&A expenses was primarily due to (i) an increase in performance-based compensation of $2.7 million, (ii) an increase in marketing expenses of $2.7 million and (iii) an increase in professional fees of $0.6 million. The increase in professional fees was net of a $1.5 million decrease in costs related to the investigation of misconduct within the Dubai branch. These increases were partially offset by a $0.7 million decrease in foreign exchange losses reflecting lower transactional foreign currency losses during the period and a decrease in payroll related expenses of $0.4 million (which included the impact of $1.5 million of severance costs in the prior year period in connection with the cost-savings initiative). U.S. Watch and Accessory Brands Operating Loss In the United States locations of the Watch and Accessory Brands segment, for the six months ended July 31, 2026, the Company recorded an operating loss of $12.0 million, compared to an operating loss of $24.0 million in the prior period. Operating results for the six months ended July 31, 2026 included unallocated corporate expenses of $25.4 million, compared to $18.7 million in the prior period. 30 The decrease in operating loss was the result of an increase in gross profit of $19.3 million (which includes $3.2 million of IEEPA duty refunds received), partially offset by an increase in SG&A expenses of $7.3 million when compared to the prior year period. The increase in gross profit of $19.3 million was the result of higher net sales, combined with a higher gross margin percentage primarily due to a favorable sales mix, IEEPA duty refunds received and the increased leveraging of certain fixed costs as a result of higher sales, partially offset by higher shipping costs. The increase in SG&A expenses was primarily due to (i) an increase in performance-based compensation of $2.8 million, (ii) an increase in certain unallocated corporate costs of $2.8 million, (iii) higher marketing expenses of $1.4 million and (iv) an increase in professional fees of $0.5 million. The increase in professional fees was net of a $1.5 million decrease in costs related to the investigation of misconduct within the Dubai branch). These increases were partially offset by a decrease in payroll related expenses of $1.4 million (which included the impact of $0.3 million of severance costs in the prior year period related to the cost-savings initiative). International Watch and Accessory Brands Operating Income In the International locations of the Watch and Accessory Brands segment, for the six months ended July 31, 2026, the Company recorded operating income of $28.8 million, compared to operating income of $23.8 million in the prior period. Operating results for the six months ended July 31, 2026 included $27.5 million of certain intercompany profits related to the Company’s International supply chain operations, compared to $28.6 million in the prior period. The increase in operating income was the result of a higher gross profit of $2.9 million combined with lower SG&A expenses of $2.1 million. The increase in gross profit of $2.9 million was primarily the result of higher net sales, partially offset by a lower gross margin percentage primarily due to an unfavorable sales mix, partially offset by the increased leveraging of certain reduced costs over higher sales. The decrease in SG&A expenses was primarily due to (i) a decrease in certain allocated corporate costs of $2.8 million and (ii) a decrease of $0.7 million in foreign exchange losses reflecting lower transactional foreign currency losses during the period. These decreases were partially offset by higher marketing expenses of $1.3 million and an increase in payroll related expenses of $1.0 million. The increase in payroll-related expenses was net of $1.2 million of severance costs incurred in the prior year period in connection with the cost-savings initiative. Company Stores Operating Income The Company recorded operating income of $5.0 million and $4.4 million in the Company Stores segment for the six months ended July 31, 2026 and 2025, respectively. The increase in operating income of $0.6 million was primarily related to an increase in gross profit of $1.3 million, mainly due to higher sales, partially offset by a lower gross margin percentage. Operating profit was negatively impacted by an increase in SG&A expenses of $0.7 million primarily due to an increase in payroll related expenses and an increase in rent related expenses mainly due to a new store opening in the second quarter of the prior year. As of July 31, 2026, and 2025, the Company Stores segment operated 57 retail outlet locations. Other Non-Operating Income, net The Company recorded other income, net of $3.2 million for the six months ended July 31, 2026, primarily due to interest income and distributions received from a venture capital fund in which the Company holds a limited partnership interest. The Company recorded other income, net of $3.0 million for the six months ended July 31, 2025, primarily due to interest income, partially offset by a non-cash impairment charge of $0.4 million related to one of its investments in a venture capital fund in which the Company has a limited partnership interest. The write-down was a result of a decline in the fair value of the investment primarily attributable to a deterioration in the financial condition and operating performance of certain of the underlying portfolio companies within the fund that was determined to be other than temporary. Interest Expense Interest expense was $0.2 million primarily due to the payment of unused commitment fees for both the six months ended July 31, 2026 and 2025. There were no borrowings under the Company's revolving credit facility during the six months ended July 31, 2026 and 2025. Income Taxes The Company recorded an income tax provision of $5.5 million and $2.6 million for the six months ended July 31, 2026 and 2025, respectively. The effective tax rate was 22.0% and 37.2% for the six months ended July 31, 2026 and 2025, respectively. The significant components of the effective tax rate for the six month period changed primarily due to an increase in the utilization of foreign tax credits related to Net Controlled Foreign Corporation Tested Income and excess tax benefits related to stock-based compensation in the current year as compared to deficiencies in the prior year, partially offset by changes in jurisdictional earnings. 31 Net Income Attributable to Movado Group, Inc. The Company recorded net income attributable to Movado Group, Inc. of $19.2 million and $4.4 million for the six months ended July 31, 2026 and 2025, respectively. LIQUIDITY AND CAPITAL RESOURCES At July 31, 2026, and July 31, 2025, the Company had $211.6 million and $180.5 million, respectively, of cash and cash equivalents. Of this total, $128.0 million and $71.9 million, respectively, consisted of cash and cash equivalents at the Company's foreign subsidiaries. At July 31, 2026, the Company had working capital of $403.5 million as compared to $384.8 million at July 31, 2025. The increase in working capital was primarily the result of an increase in cash and a decrease in accrued liabilities, partially offset by a decrease in inventories, other current assets and an increase in income taxes payable. The Company defines working capital as the difference between current assets and current liabilities. Net cash provided by operating activities was $6.5 million for the six months ended July 31, 2026, compared to net cash used in operating activities of $11.0 million for the six months ended July 31, 2025, representing an increase of approximately $17.6 million. The increase was primarily driven by the $15.0 million increase in net income and, on a net basis, favorable changes in working capital. The most significant favorable changes in working capital items were: •Accounts payable, which provided $15.8 million of additional cash, primarily due to the timing of supplier payments; •Income taxes receivable/payable, net, which provided $4.1 million of additional cash, primarily due to timing of payments; •Inventories, which used $2.2 million less cash compared to the prior year period, primarily reflecting lower inventory levels driven by disciplined inventory management; and •Trade receivables, which provided $2.0 million of additional cash compared to the prior year period, reflecting improved collections and tighter receivables management. These favorable impacts were partially offset by: •Accrued liabilities, which resulted in $13.2 million more cash used than in the prior year period, primarily due to timing of payments; and •Accrued payroll and benefits, which used $8.1 million more cash, primarily due to payments of performance-based compensation. Cash used in investing activities was $3.6 million for the six months ended July 31, 2026, compared to $4.8 million for the six months ended July 31, 2025. The cash used in investing activities during the current year period primarily related to capital expenditures of $2.3 million mainly for leasehold improvements and shop-in-shops, and $1.1 million of long-term investments. Cash used in investing activities for the six months ended July 31, 2025 included $2.8 million of capital expenditures and $1.9 million of long-term investments. Cash used in financing activities was $18.4 million for the six months ended July 31, 2026 as compared to $17.6 million for the six months ended July 31, 2025. The cash used in the current year period included $16.6 million in dividend payments, $1.5 million of open-market share repurchases, $2.4 million related to shares surrendered by employees to satisfy tax withholding obligations upon vesting of certain stock awards, offset by $2.5 million received in connection with stock options exercised and $0.3 million of debt issuance costs paid in connection with the amendment of the Company's revolving credit facility. Cash used in financing activities for the six months ended July 31, 2025 was due to $15.6 million in dividends paid, $1.6 million in stock repurchased in the open market and $0.5 million related to shares surrendered by employees to satisfy tax withholding obligations upon vesting of certain stock awards. 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”). After giving effect to Amendment No. 7 thereto dated July 16, 2026, the Credit Agreement provides for a $75.0 million senior secured revolving credit facility (the “Facility”) and has a maturity date of July 16, 2031. The Facility includes a $15.0 million letter of credit subfacility, and a $25.0 million swingline subfacility, 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). 32 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 July 31, 2026, and July 31, 2025, there were no amounts of loans outstanding under the Facility. Availability under the Facility was reduced by the aggregate amount 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 July 31, 2026 and July 31, 2025. At July 31, 2026, the letters of credit have expiration dates through June 1, 2027. As of July 31, 2026, and July 31, 2025, availability under the Facility was $74.7 million and $99.7 million, respectively. For additional information regarding the Facility, see Note 6 - 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 and six months ended July 31, 2026 and 2025, respectively. The Company's Swiss subsidiary maintains unsecured lines of credit with a Swiss bank that are subject to repayment upon demand. As of July 31, 2026, and 2025, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $8.0 million for both periods. As of July 31, 2026, and 2025, there were no borrowings against these lines. As of July 31, 2026 and 2025, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.5 million in various foreign currencies in both periods. Of these amounts $0.8 million in both periods represented restricted deposits related to lease agreements. During the second quarter of fiscal 2027, the Company incurred and capitalized $0.4 million of fees related to the amendment. These fees, along with the unamortized fees of $0.1 million paid related to the base Credit Agreement, are being amortized on a straight-line basis over 60 months, the revised term of the Facility, and are included in other non-current assets on the Consolidated Balance Sheets. Cash paid for interest, including unused commitment fees, was $0.1 million for both the six-month periods ended July 31, 2026 and July 31, 2025, respectively. 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 $17.5 million of these commitments through fiscal 2026 and an additional $1.1 million during the first six months of fiscal 2027 and may be called upon to satisfy capital calls in respect of the remaining $2.9 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. During the three-month period ended July 31, 2025, the Company recorded a non-cash impairment charge of $0.4 million related to one of its investments in a venture capital fund in which the Company has a limited partnership interest. The write-down was a result of a decline in the fair value of the investment primarily attributable to a deterioration in the financial condition and operating performance of certain of the underlying portfolio companies within the fund that was determined to be other than temporary. The Company will continue to regularly evaluate the carrying value of its investments. These investments are carried at cost, less any related impairments, adjusted for observable price changes, if any, as fair values are not readily determinable. Other than the additional investments made during the six months ended July 31, 2026, there were no impairment charges or observable price changes related to these investments. During the six months ended July 31, 2026, the Company declared and paid two separate cash dividends of $0.35 per share and $0.40 per share aggregating to $16.6 million. During the six months ended July 31, 2025, the Company declared and paid two separate cash dividends each at $0.35 per share aggregating to $15.6 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 December 5, 2024, 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 December 5, 2027, depending on market conditions, share price and other factors. These repurchases may be made through open market purchases, repurchase plans, block trades or otherwise. During the six months ended July 31, 2026, the Company repurchased a total of 61,000 shares of its common stock under the December 5, 2024 share repurchase program at a total cost of $1.5 million, or an average of $25.26 per share. During the six months ended July 31, 2025, the Company repurchased a total of 100,000 shares of its common stock under the December 5, 2024 share repurchase program at a total 33 cost of $1.6 million, or an average of $15.94 per share. At July 31, 2026, $44.6 million remains available for purchase under the Company's December 5, 2024 repurchase program. 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.