Luxury watch company Movado (NYSE: MOV) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 1.6% year on year to $161.8 million. Its GAAP profit of $0.13 per share was 57.5% below analysts’ consensus estimates.

Is now the time to buy MOV? Find out in our full research report (it’s free).

StockStory’s Take

Movado’s second quarter reflected a mix of product-driven growth and external cost pressures, with management attributing performance to successful new watch introductions and the strategic timing of inventory movements ahead of U.S. tariff increases. CEO Efraim Grinberg noted, “We have built a strong position in inventory of Swiss-made watches in the United States and would expect a substantial portion of the year’s needs are covered.” Management also highlighted ongoing traction in digital and wholesale channels, particularly for women’s and licensed brand collections.

Looking forward, Movado’s outlook is shaped by continued uncertainty around U.S. tariffs on Swiss imports and a cautious approach to the broader retail environment. Grinberg emphasized that pricing actions and supplier negotiations are expected to help offset tariff impacts in upcoming periods, while efforts to refresh the product assortment and expand digital marketing should support demand. CFO Sallie DeMarsilis added, “We do think that a substantial portion of what we need in the U.S. is probably already here,” underscoring the company’s focus on inventory management to mitigate potential supply chain disruptions.

Key Insights from Management’s Remarks

Movado’s management tied second quarter results to timely inventory management, evolving consumer trends, and the mix of brand and channel performance. The team also explained how recent actions are expected to shape future profitability.

• Tariff mitigation efforts: Management strategically increased U.S. inventory of Swiss-made watches before new tariffs took effect, aiming to cover most of this year’s demand and reduce cost volatility. They are developing ongoing mitigation plans as tariff negotiations continue.

• Licensed brand momentum: Growth in licensed brands, including HUGO BOSS, Tommy Hilfiger, Lacoste, and Coach, was driven by new product launches and successful marketing campaigns, especially targeting younger, digitally engaged consumers on platforms like TikTok and YouTube.

• Shift in women’s watch trends: The resurgence of smaller, “mini” and “micro” watches is attracting younger women to the category. Management believes this trend, which started in luxury and is expanding to more accessible price points, has the potential to drive broader category growth.

• Digital channel performance: Movado saw strong growth in its own e-commerce and with online partners, benefiting from increased consumer engagement in digital retail events, particularly in Europe. Management views digital as a key growth lever across all brands.

• Expense management and restructuring: Expense reductions, including lower marketing spend and restructuring actions, helped offset some cost increases from tariffs and compensation. Management expects the majority of restructuring charges to be behind them, with annualized savings contributing to improved margins going forward.

Drivers of Future Performance

Movado’s future performance will depend on successfully managing tariff headwinds, capitalizing on product innovation, and sustaining digital and international growth.

• Tariff and supply chain risks: Management cited ongoing uncertainty around U.S. tariffs on Swiss imports as a major variable. While they have built up inventory and enacted pricing changes, resolution of tariff negotiations and further supply chain disruptions remain risks to both costs and sales.

• New product launches and marketing: The company is focusing on introducing trend-driven collections across both owned and licensed brands. Digital-first marketing campaigns featuring celebrities and social media influencers are expected to enhance brand visibility and drive sell-through, particularly among younger demographics.

• Expense discipline and restructuring benefits: Ongoing cost reduction initiatives and the winding down of restructuring charges are expected to support operating margins. Management anticipates approximately $10 million in annualized savings, helping to offset inflationary and tariff-driven pressures.

Catalysts in Upcoming Quarters

Going forward, the StockStory team will monitor (1) the resolution of U.S.-Swiss tariff negotiations and any corresponding impact on costs, (2) the pace at which inventory levels normalize and translate into sales, and (3) the effectiveness of new product launches and digital marketing campaigns in sustaining demand. Progress on cost containment and the return to consistent operating margin improvement will also be key signposts.

Movado currently trades at $17.84, up from $17.52 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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