Movado Group, Inc. (NYSE:MOV) Q2 2025 Earnings Conference Call September 5, 2024 9:00 AM ET

Company Participants

Allison Malkin – Investor Relations-ICR, Inc.
Efraim Grinberg – Chief Executive Officer
Sallie DeMarsilis – Executive Vice President, Chief Operating Officer and Chief Financial Officer

Conference Call Participants

Michael Legg – The Benchmark Company

Operator

Good day everyone, and welcome to Movado Group, Incorporated Second Quarter Fiscal Year 2025 Earnings Conference Call. As a reminder, today’s call is being recorded and may not be reproduced in full or in part without permission from the company.

At this time, I would like to turn the conference over to Allison Malkin with ICR. Please go ahead.

Allison Malkin

Good morning everyone. With me on the call is Efraim Grinberg, Chairman and Chief Executive Officer; and Sallie DeMarsilis, Executive Vice President and Chief Operating Officer and Chief Financial Officer.

Before we get started, I would like to remind you of the Company’s Safe Harbor language, which I’m sure you’re all familiar with. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company’s filings with the SEC, which includes today’s press release.

If any non-GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release.

Now, I would like to turn the call over to Efraim Grinberg, Chairman and Chief Executive Officer of Movado Group.

Efraim Grinberg

Thank you, Allison. Good morning, and thank you for joining us today. I am pleased to share our second quarter performance as we make progress advancing our strategy in a challenging consumer spending environment. We improved our sales trends from the first – to the second quarter, reporting virtually flat net sales on a constant dollar basis to last year.

Our operating profit declined to $3 million, driven by increased marketing investments that are expected to accelerate sales growth in the future. We maintained a healthy gross margin with the rate declining versus the second quarter last year due to the overall mix of our business. Our balance sheet remains strong with $198 million in cash and no debt. Inventory increased from the beginning of the fiscal year to support our sales expectations for the second half of the year.