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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended October 31, 2024


☐	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: 1-16497

MOVADO GROUP, INC.

(Exact Name of Registrant as Specified in its Charter)


New York		13-2595932
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

650 From Road, Ste. 375 Paramus, New Jersey		07652-3556
(Address of Principal Executive Offices)		(Zip Code)

(201) 267-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Common Stock, par value $0.01 per share

    MOV

    New York Stock Exchange

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐	Accelerated filer	☒	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

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 December 2, 2024 were 15,684,480 and 6,458,376 respectively.

MOVADO GROUP, INC.

Index to Quarterly Report on Form 10-Q

October 31, 2024


			Page
Part I	Financial Information (Unaudited)
	Item 1.	Consolidated Balance Sheets at October 31, 2024, January 31, 2024 and October 31, 2023	3
		Consolidated Statements of Operations for the three and nine months ended October 31, 2024 and October 31, 2023	4
		Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended October 31, 2024 and October 31, 2023	5
		Consolidated Statements of Cash Flows for the nine months ended October 31, 2024 and October 31, 2023	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
	Item 4.	Controls and Procedures	30
Part II	Other Information
	Item 1.	Legal Proceedings	31
	Item 1A.	Risk Factors	31
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
	Item 5.	Other Information	32
	Item 6.	Exhibits	33
Signature			34

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)


	October 31,			January 31,			October 31,
	2024			2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	181,548		$	262,059		$	200,965
Trade receivables, net		139,163			104,472			135,523
Inventories		168,929			148,031			171,966
Other current assets		22,625			17,962			18,856
Income taxes receivable		7,922			11,354			11,135
Total current assets		520,187			543,878			538,445
Property, plant and equipment, net		20,480			19,436			19,458
Operating lease right-of-use assets		88,892			82,661			84,212
Deferred and non-current income taxes		43,767			43,016			44,814
Other intangibles, net		6,192			7,493			7,688
Other non-current assets		86,358			72,598			68,780
Total assets	$	765,876		$	769,082		$	763,397
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	29,429		$	32,775		$	22,998
Accrued liabilities		51,245			38,695			57,165
Accrued payroll and benefits		12,541			7,591			10,317
Current operating lease liabilities		18,851			15,696			15,885
Income taxes payable		9,760			18,318			20,024
Total current liabilities		121,826			113,075			126,389
Deferred and non-current income taxes payable		1,188			8,234			7,966
Non-current operating lease liabilities		79,410			76,396			76,929
Other non-current liabilities		57,028			52,420			49,195
Total liabilities		259,452			250,125			260,479
Commitments and contingencies (Note 9)
Equity:
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; no shares issued		—			—			—
Common Stock, $0.01 par value, 100,000,000 shares authorized; 29,174,709, 29,004,001 and 28,879,497 shares issued and outstanding, respectively		292			290			289
Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,458,376, 6,483,116 and 6,483,116 shares issued and outstanding		64			64			64
Capital in excess of par value		243,311			239,062			236,438
Retained earnings		458,660			470,317			465,919
Accumulated other comprehensive income		90,323			92,335			81,727
Treasury Stock, 13,490,483, 13,328,095 and 13,282,860 shares, respectively, at cost		(289,067	)		(285,270	)		(283,998	)
Total Movado Group, Inc. shareholders' equity		503,583			516,798			500,439
Noncontrolling interest		2,841			2,159			2,479
Total equity		506,424			518,957			502,918
Total liabilities and equity	$	765,876		$	769,082		$	763,397

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended October 31,						Nine Months Ended October 31,
	2024			2023			2024			2023
Net sales	$	182,727		$	187,686		$	478,709		$	492,981
Cost of sales		84,331			85,358			218,435			219,364
Gross profit		98,396			102,328			260,274			273,617
Selling, general and administrative		91,846			81,636			247,383			232,378
Operating income		6,550			20,692			12,891			41,239
Non-operating income/(expense):
Other income, net		1,522			1,632			5,571			4,194
Interest expense		(144	)		(135	)		(372	)		(361	)
Income before income taxes		7,928			22,189			18,090			45,072
Provision for income taxes (Note 10)		2,495			4,519			5,733			9,938
Net income		5,433			17,670			12,357			35,134
Less: Net income attributable to noncontrolling interests		383			281			695			568
Net income attributable to Movado Group, Inc.	$	5,050		$	17,389		$	11,662		$	34,566

Basic income per share:
Weighted basic average shares outstanding		22,283			22,209			22,280			22,222
Net income per share attributable to Movado Group, Inc.	$	0.23		$	0.78		$	0.52		$	1.56

Diluted income per share:
Weighted diluted average shares outstanding		22,559			22,677			22,627			22,641
Net income per share attributable to Movado Group, Inc.	$	0.22		$	0.77		$	0.52		$	1.53

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


	Three Months Ended October 31,						Nine Months Ended October 31,
	2024			2023			2024			2023
Net income	$	5,433		$	17,670		$	12,357		$	35,134
Other comprehensive income/(loss):
Net unrealized gain/(loss) on investments, net of tax provision/(benefit) of $1, ($3), $8 and ($13), respectively		4			(9	)		24			(38	)
Amortization of prior service cost, net of tax provision of $3, $4, $10 and $12, respectively		13			15			37			45
Foreign currency translation adjustments		2,266			(10,066	)		(2,247	)		256
Cash flow hedges:
Accumulated other comprehensive (loss)/income before reclassification, net of tax (benefit)/provision of ($37), $56, $1 and $51, respectively		(186	)		284			4			260
Amounts reclassified from accumulated other comprehensive income/(loss), net of tax provision/(benefit) of $76, ($61), $33 and ($18), respectively		388			(307	)		170			(91	)
Total other comprehensive income/(loss), net of taxes		2,485			(10,083	)		(2,012	)		432
Less:
Comprehensive income/(loss) attributable to noncontrolling interests:
Net income		383			281			695			568
Foreign currency translation adjustments		(1	)		(136	)		(13	)		(247	)
Total comprehensive income attributable to noncontrolling interests	$	382		$	145		$	682		$	321
Total comprehensive income attributable to Movado Group, Inc.	$	7,536		$	7,442		$	9,663		$	35,245

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended October 31,
	2024			2023
Cash flows from operating activities:
Net income	$	12,357		$	35,134
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Depreciation and amortization		6,960			7,278
Transactional losses		594			204
Provision for inventories and accounts receivable		4,489			3,803
Deferred income taxes		(1,582	)		(2,032	)
Stock-based compensation		4,094			5,529
Other		265			754
Changes in assets and liabilities:
Trade receivables		(37,026	)		(42,027	)
Inventories		(24,697	)		10,758
Other current assets		(4,675	)		4,107
Accounts payable		(3,709	)		(7,492	)
Accrued liabilities		11,974			12,336
Accrued payroll and benefits		4,994			(7,039	)
Income taxes receivable		8,374			(4,494	)
Income taxes payable		(19,855	)		(10,014	)
Other non-current assets		(3,141	)		1,293
Other non-current liabilities		(43	)		(730	)
Net cash (used in)/provided by operating activities		(40,627	)		7,368
Cash flows from investing activities:
Capital expenditures		(6,368	)		(6,627	)
Long-term investments		(5,467	)		(2,040	)
Trademarks and other intangibles		(86	)		(113	)
Net cash used in investing activities		(11,921	)		(8,780	)
Cash flows from financing activities:
Dividends paid		(23,319	)		(45,399	)
Stock repurchases		(2,628	)		(2,349	)
Distribution of noncontrolling interest earnings		—			(780	)
Stock awards and options exercised and other changes		(1,101	)		(73	)
Net cash used in financing activities		(27,048	)		(48,601	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(917	)		(377	)
Net decrease in cash, cash equivalents and restricted cash		(80,513	)		(50,390	)
Cash, cash equivalents, and restricted cash at beginning of year		262,814			252,179
Cash, cash equivalents, and restricted cash at end of period	$	182,301		$	201,789

Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	181,548		$	200,965
Restricted cash included in other non-current assets		753			824
Cash, cash equivalents, and restricted cash	$	182,301		$	201,789

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The accompanying interim unaudited Consolidated Financial Statements have been prepared by Movado Group, Inc. (the “Company”), in a manner consistent with that used in the preparation of the annual audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024 (the “2024 Annual Report on Form 10-K”). The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the periods reported. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and results of operations for the periods presented. The Consolidated Balance Sheet data at January 31, 2024 is derived from the audited annual financial statements, which are included in the Company’s 2024 Annual Report on Form 10-K and should be read in connection with these interim unaudited financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

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 plans to adopt ASU 2023-07 in the fourth quarter of fiscal year 2025 and the adoption will result in additional segment-related footnote disclosures within the notes to the Consolidated Financial Statements.

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 timing and impact of adoption on its Consolidated Financial Statements and related disclosures.

NOTE 3 - COST-SAVINGS INITIATIVE

During the third quarter of fiscal year 2025, in light of the ongoing challenging consumer-spending environment, the Company committed to a cost-savings initiative to reduce operating expenses through headcount reductions, bringing them more in line with sales.

During the third quarter of fiscal year 2025, the Company recorded to date $2.7 million in severance and payroll related charges which are included in Selling, general and administrative in the Consolidated Statements of Operations for the three and nine months ended October 31, 2024. The amounts are included in the Watch and Accessory segment with $1.5 million in the United States locations and $1.2 million in the International locations.

The Company expects the severance and payroll related expenses to be paid out within the next twelve months. $0.3 million was paid during the third quarter of fiscal 2025 and the remaining $2.4 million is included in Accrued payroll and benefits in the Consolidated Balance Sheet at October 31, 2024.

NOTE 4 – 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):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2024		2023		2024		2023
Weighted average common shares outstanding:
Basic		22,283		22,209		22,280		22,222
Effect of dilutive securities:
Stock awards and options to purchase shares of common stock		276		468		347		419
Diluted		22,559		22,677		22,627		22,641

For the three months ended October 31, 2024 and 2023, approximately 751,000 and 497,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. For the nine months ended October 31, 2024 and 2023, approximately 694,000 and 671,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

During the nine months ended October 31, 2024, the Company has declared and paid a total of three separate cash dividends of $0.35 per share aggregating to $23.3 million. During the nine months ended October 31, 2023, the Company declared and paid three separate cash dividends of $0.35 per share and a special cash dividend of $1.00 per share aggregating to $45.4 million.

NOTE 5 – INVENTORIES

Inventories consisted of the following (in thousands):


	October 31, 2024		January 31, 2024		October 31, 2023
Finished goods	$	139,501	$	117,909	$	141,109
Component parts		25,802		26,386		27,217
Work-in-process		3,626		3,736		3,640
	$	168,929	$	148,031	$	171,966

NOTE 6 – 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 $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 October 31, 2024, and October 31, 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 October 31, 2024 and October 31, 2023. At October 31, 2024, the letters of credit have expiration dates through June 2, 2025. As of both October 31, 2024, and October 31, 2023, availability under the Facility was $99.7 million.

The Company had weighted average borrowings under the Facility of zero during both the three and nine months ended October 31, 2024 and 2023, respectively.

The Company's Swiss subsidiary maintains unsecured lines of credit with a Swiss bank that are subject to repayment upon demand. As of October 31, 2024, and 2023, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.5 million and $7.1 million, respectively. As of October 31, 2024, and 2023, there were no borrowings against these lines. As of October 31, 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 $1.4 million and $1.5 million, respectively, in various foreign currencies, of which $0.8 million and $0.8 million ($0.1 million was refunded in November 2023), respectively, was a restricted deposit as it relates to lease agreements.

Cash paid for interest, including unused commitments fees, was $0.2 million for both the nine month periods ended October 31, 2024 and October 31, 2023 and amortization of debt fees was $0.2 million for both the nine month periods ended October 31, 2024 and October 31, 2023.

NOTE 7 – 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 October 31, 2024, the Company's net forward contracts hedging portfolio designated as qualified cash flow hedging instruments consisted of 9.0 million Euros equivalent with various expiry dates ranging through November 27, 2024. The net gain or loss on the derivatives is reported as a component of accumulated other comprehensive income/(loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings using the same revenue or expense category that the hedged item impacted. The Company also enters into foreign currency forward contracts not designated as qualified hedges in accordance with ASC 815, Derivatives and Hedging. As of October 31, 2024, the Company’s net forward contracts hedging portfolio not designated as qualified hedges consisted of 7.3 million Chinese Yuan equivalent, 30.0 million Swiss Francs equivalent, 29.6 million U.S. dollars equivalent, 24.0 million Euros equivalent and 4.8 million British Pounds equivalent with various expiry dates ranging through April 10, 2025. Changes in the fair value of these derivatives are recognized in earnings in the period they arise. Net gains or losses related to these forward contracts are included in cost of sales, selling and general and administrative expenses in the Consolidated Statements of Operations. The cash flows related to these foreign currency contracts are classified in operating activities.

The following table presents the fair values of the Company's derivative financial instruments included in the Consolidated Balance Sheets as of October 31, 2024, January 31, 2024 and October 31, 2023 (in thousands):


	Asset Derivatives							Liability Derivatives
	Balance Sheet Location	October 31, 2024 Fair Value		January 31, 2024 Fair Value		October 31, 2023 Fair Value		Balance Sheet Location	October 31, 2024 Fair Value		January 31, 2024 Fair Value		October 31, 2023 Fair Value
Derivatives designated as hedging instruments:
Foreign Exchange Contracts	Other Current Assets	$	219	$	26	$	—	Accrued Liabilities	$	—	$	11	$	5
Total Derivative Instruments		$	219	$	26	$	—		$	—	$	11	$	5


	Asset Derivatives							Liability Derivatives
	Balance Sheet Location	October 31, 2024 Fair Value		January 31, 2024 Fair Value		October 31, 2023 Fair Value		Balance Sheet Location	October 31, 2024 Fair Value		January 31, 2024 Fair Value		October 31, 2023 Fair Value
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other Current Assets	$	154	$	528	$	—	Accrued Liabilities	$	77	$	—	$	650
Total Derivative Instruments		$	154	$	528	$	—		$	77	$	—	$	650

As of October 31, 2024, January 31, 2024 and October 31, 2023, the balance of net deferred gains on derivative financial instruments designated as cash flow hedges included in accumulated other comprehensive income/(loss) were $0.2 million, $43,000 and ($2,000), respectively. For the three months ended October 31, 2024, and October 31, 2023, the Company reclassified ($0.4) million and $0.3 million, respectively, from accumulated other comprehensive (loss)/income to Net sales in the Consolidated Statements of Operations.

For the nine months ended October 31, 2024, and October 31, 2023, the Company reclassified ($0.2) million and $0.1 million, respectively, from accumulated other comprehensive (loss)/income to Net sales in the Consolidated Statements of Operations. No ineffectiveness has been recorded for the three and nine months ended October 31, 2024.

See Note 8 - Fair Value Measurements for fair value and presentation in the Consolidated Balance Sheets for derivatives.

NOTE 8 – 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:

•

Level 1 – Quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

•

Level 3 – Unobservable inputs based on the Company’s assumptions.

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 October 31, 2024 and 2023 and January 31, 2024 (in thousands):


		Fair Value at October 31, 2024
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	278	$	—	$	—	$	278
Short-term investment	Other current assets		149		—		—		149
SERP assets - employer	Other non-current assets		737		—		—		737
SERP assets - employee	Other non-current assets		53,869		—		—		53,869
Defined benefit plan assets	Other non-current liabilities		—		—		35,524		35,524
Hedge derivatives	Other current assets		—		373		—		373
Total		$	55,033	$	373	$	35,524	$	90,930
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	53,869	$	—	$	—	$	53,869
Hedge derivatives	Accrued liabilities		—		77		—		77
Total		$	53,869	$	77	$	—	$	53,946


		Fair Value at January 31, 2024
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	246	$	—	$	—	$	246
Short-term investment	Other current assets		155		—		—		155
SERP assets - employer	Other non-current assets		510		—		—		510
SERP assets - employee	Other non-current assets		48,800		—		—		48,800
Defined benefit plan assets	Other non-current liabilities		—		—		33,731		33,731
Hedge derivatives	Other current assets		—		554		—		554
Total		$	49,711	$	554	$	33,731	$	83,996
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	48,800	$	—	$	—	$	48,800
Hedge derivatives	Accrued liabilities		—		11		—		11
Total		$	48,800	$	11	$	—	$	48,811


		Fair Value at October 31, 2023
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	213	$	—	$	—	$	213
Short-term investment	Other current assets		150		—		—		150
SERP assets - employer	Other non-current assets		591		—		—		591
SERP assets - employee	Other non-current assets		45,534		—		—		45,534
Defined benefit plan assets	Other non-current liabilities		—		—		29,712		29,712
Hedge derivatives	Other current assets		—		—		—		—
Total		$	46,488	$	—	$	29,712	$	76,200
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	45,534	$	—	$	—	$	45,534
Hedge derivatives	Accrued liabilities		—		655		—		655
Total		$	45,534	$	655	$	—	$	46,189

The fair values of the Company’s available-for-sale securities are based on quoted market prices. The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of one percent calculated annually. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the Company’s liability to the employees in the plan for their vested balances. The hedge derivatives consist of cash flow hedging instruments and forward contracts (see Note 7 for further discussion) and are entered into by the Company principally to reduce its exposure to Swiss Franc and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates.

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 October 31, 2024, January 31, 2024, and October 31, 2023.

There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

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 $8.4 million and during the first nine months of fiscal 2025, the Company invested an additional $5.5 million in venture capital funds. The Company has evaluated and will regularly evaluate the carrying value of its investments. 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 yielded little 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, and the impairment is recorded in Other income, net in the Consolidated Statements of Operations. The carrying value of the investments are recorded in Other non-current assets in the Consolidated Balance Sheets at October 31, 2024, January 31, 2024 and October 31, 2023.

NOTE 9 – 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 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 $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 were not consistent with the Company’s facts and circumstances and consistently disputed U.S. Customs’ position, the Company previously 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.

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 October 31, 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 10 – INCOME TAXES

The Company recorded an income tax provision of $2.5 million and $4.5 million for the three months ended October 31, 2024 and 2023, respectively.

The effective tax rate was 31.5% and 20.4% for the three months ended October 31, 2024 and 2023, respectively. The significant components of the effective tax rate changed primarily due to the tax consequences of a foreign currency gain related to an extraordinary intercompany dividend, an increase in valuation allowances against certain foreign losses and a limitation on a portion of the foreign tax credits and deductions related to the tax on Global Intangible Low-Taxed Income ("GILTI").

The Company recorded an income tax provision of $5.7 million and $9.9 million for the nine months ended October 31, 2024 and 2023, respectively.

The effective tax rate was 31.7% and 22.0% for the nine months ended October 31, 2024 and 2023, respectively. The significant components of the effective tax rate changed primarily due to the tax consequences on a foreign currency gain related to an extraordinary intercompany dividend, a limitation on a portion of the foreign tax credits and deductions related to the tax on GILTI and an increase in valuation allowances against certain foreign losses.

At October 31, 2024, the Company had no deferred tax liability for substantially all of the undistributed foreign earnings of approximately $246.5 million because the Company intends to permanently reinvest such earnings in its foreign operations. It is not practicable to estimate the tax liability related to a future distribution of these permanently reinvested foreign earnings.

NOTE 11 – EQUITY

The components of equity for the three and nine months ended October 31, 2024 and 2023 are as follows (in thousands):


					Movado Group, Inc. Shareholders' Equity for the three months ended October 31, 2024 and 2023
	Preferred Stock		Common Stock Shares (1)		Common Stock Amount		Class A Common Stock Shares (2)		Class A Common Stock Amount		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest			Total Movado Group, Inc. Shareholders' Equity
Balance, July 31, 2024	$	—		29,170	$	292		6,458	$	64	$	242,039	$	461,382		$	87,838		$	(287,499	)	$	2,459		$	506,575
Net income attributable to Movado Group, Inc.														5,050									383			5,433
Dividends ($0.35 per share)														(7,772	)											(7,772	)
Stock awards and options exercised				5																(26	)					(26	)
Stock repurchases																				(1,542	)					(1,542	)
Conversion of Class A Common Stock to Common Stock																										-
Supplemental executive retirement plan												33														33
Stock-based compensation expense												1,239														1,239
Net unrealized gain on investments, net of tax provision of $1																	4									4
Net change in effective portion of hedging contracts, net of tax provision of $39																	202									202
Amortization of prior service cost, net of tax provision of $3																	13									13
Foreign currency translation adjustment (3)																	2,266						(1	)		2,265
Balance, October 31, 2024	$	—		29,175	$	292		6,458	$	64	$	243,311	$	458,660		$	90,323		$	(289,067	)	$	2,841		$	506,424

	Preferred Stock		Common Stock Shares (1)		Common Stock Amount		Class A Common Stock Shares (2)		Class A Common Stock Amount		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest			Total Movado Group, Inc. Shareholders' Equity
Balance, July 31, 2023	$	—		28,876	$	289		6,483	$	64	$	234,443	$	456,279		$	91,810		$	(282,101	)	$	3,114		$	503,898
Net income attributable to Movado Group, Inc.														17,389									281			17,670
Dividends ($0.35 per share)														(7,749	)											(7,749	)
Distribution of noncontrolling interest earnings																							(780	)		(780	)
Stock awards and options exercised				3																19						19
Stock repurchases																				(1,916	)					(1,916	)
Supplemental executive retirement plan												45														45
Stock-based compensation expense												1,950														1,950
Net unrealized loss on investments, net of tax benefit of ($3)																	(9	)								(9	)
Net change in effective portion of hedging contracts, net of tax benefit of ($5)																	(23	)								(23	)
Amortization of prior service cost, net of tax provision of $4																	15									15
Foreign currency translation adjustment (3)																	(10,066	)					(136	)		(10,202	)
Balance, October 31, 2023	$	—		28,879	$	289		6,483	$	64	$	236,438	$	465,919		$	81,727		$	(283,998	)	$	2,479		$	502,918


					Movado Group, Inc. Shareholders' Equity for the nine months ended October 31, 2024 and 2023
	Preferred Stock		Common Stock Shares (1)		Common Stock Amount		Class A Common Stock Shares (2)			Class A Common Stock Amount			Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest			Total Movado Group, Inc. Shareholders' Equity
Balance, January 31, 2024	$	—		29,004	$	290		6,483		$	64		$	239,062	$	470,317		$	92,335		$	(285,270	)	$	2,159		$	518,957
Net income attributable to Movado Group, Inc.																11,662									695			12,357
Dividends ($1.05 per share)																(23,319	)											(23,319	)
Stock awards and options exercised				145		2								66								(1,169	)					(1,101	)
Stock repurchases																						(2,628	)					(2,628	)
Conversion of Class A Common Stock to Common Stock				25				(25	)																			-
Supplemental executive retirement plan				1										89														89
Stock-based compensation expense														4,094														4,094
Net unrealized gain on investments, net of tax provision of $8																			24									24
Net change in effective portion of hedging contracts, net of tax provision of $34																			174									174
Amortization of prior service cost, net of tax provision of $10																			37									37
Foreign currency translation adjustment (3)																			(2,247	)					(13	)		(2,260	)
Balance, October 31, 2024	$	—		29,175	$	292		6,458		$	64		$	243,311	$	458,660		$	90,323		$	(289,067	)	$	2,841		$	506,424

	Preferred Stock		Common Stock Shares (1)		Common Stock Amount		Class A Common Stock Shares (2)			Class A Common Stock Amount			Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest			Total Movado Group, Inc. Shareholders' Equity
Balance, January 31, 2023	$	—		28,807	$	288		6,525		$	65		$	230,782	$	476,752		$	81,295		$	(281,576	)	$	2,938		$	510,544
Net income attributable to Movado Group, Inc.																34,566									568			35,134
Dividends ($2.05 per share)																(45,399	)											(45,399	)
Distribution of noncontrolling interest earnings																									(780	)		(780	)
Stock awards and options exercised				30																		(73	)					(73	)
Stock repurchases																						(2,349	)					(2,349	)
Conversion of Class A Common Stock to Common Stock				42		1		(42	)		(1	)																-
Supplemental executive retirement plan														127														127
Stock-based compensation expense														5,529														5,529
Net unrealized loss on investments, net of tax benefit of ($13)																			(38	)								(38	)
Net change in effective portion of hedging contracts, net of tax provision of $33																			169									169
Amortization of prior service cost, net of tax provision of $12																			45									45
Foreign currency translation adjustment (3)																			256						(247	)		9
Balance, October 31, 2023	$	—		28,879

MOVADO GROUP INC 10-Q