Derivative Financial Instruments

6 Months Ended

Jul. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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 July 31, 2025, the Company's net forward contracts hedging portfolio designated as qualified cash flow hedging instruments consisted of 14.0 million Euros equivalent with various expiry dates ranging through October 23, 2025. 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 July 31, 2025, the Company’s net forward contracts hedging portfolio not designated as qualified hedges consisted of 30.0 million Swiss Francs equivalent, 28.9 million U.S. dollars equivalent, 22.0 million Euros equivalent and 2.7 million British Pounds equivalent with various expiry dates ranging through January 15, 2026. 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, 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 July 31, 2025, January 31, 2025 and July 31, 2024 (in thousands):


	Asset Derivatives							Liability Derivatives
	Balance Sheet Location	July 31, 2025 Fair Value		January 31, 2025 Fair Value		July 31, 2024 Fair Value		Balance Sheet Location	July 31, 2025 Fair Value		January 31, 2025 Fair Value		July 31, 2024 Fair Value
Derivatives designated as hedging instruments:
Foreign Exchange Contracts	Other Current Assets	$	—	$	—	$	25	Accrued Liabilities	$	728	$	—	$	24
Total Derivative Instruments		$	—	$	—	$	25		$	728	$	—	$	24


	Asset Derivatives							Liability Derivatives
	Balance Sheet Location	July 31, 2025 Fair Value		January 31, 2025 Fair Value		July 31, 2024 Fair Value		Balance Sheet Location	July 31, 2025 Fair Value		January 31, 2025 Fair Value		July 31, 2024 Fair Value
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other Current Assets	$	113	$	13	$	384	Accrued Liabilities	$	251	$	1,111	$	—
Total Derivative Instruments		$	113	$	13	$	384		$	251	$	1,111	$	—

As of July 31, 2025, January 31, 2025 and July 31, 2024, the balance of net deferred gains on derivative financial instruments designated as cash flow hedges included in accumulated other comprehensive (loss)/income were ($0.8) million, $0 and $15,000, respectively. For the three months ended July 31, 2025, and July 31, 2024, the Company reclassified ($0.7) million and $0.2 million, respectively, from accumulated other comprehensive income/(loss) to Net sales in the Consolidated Statements of Operations. For the six months ended July 31, 2025, and July 31, 2024, the Company reclassified ($0.8) million and $0.2 million, respectively, from accumulated other comprehensive income/(loss) to Net sales in the Consolidated Statements of Operations. No ineffectiveness has been recorded for the three months and six months ended July 31, 2025.

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

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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+ Details

MOVADO GROUP INC 10-Q