Movado Group Inc (NYSE:MOV) Reports Mixed Q3 Results with Earnings Beat and Revenue Miss

Movado Group Reports Mixed Q3 Results as Earnings Beat Offset by Revenue Miss

Movado Group Inc (NYSE:MOV) announced financial results for its third quarter of fiscal 2026, delivering a performance that presented a mixed picture for investors. The watchmaker surpassed bottom-line expectations but fell short on the top line, leading to a muted market reaction in pre-market trading.

Earnings and Revenue Versus Estimates

The company's quarterly performance presented a tale of two key metrics. On the profitability front, Movado delivered a strong beat, while revenue growth failed to meet analyst projections.

• Non-GAAP EPS: $0.45 per share, compared to the analyst estimate of $0.58 per share.
• Revenue: $186.1 million, compared to the analyst estimate of $187.7 million.

While the earnings per share figure represents a significant year-over-year increase from the $0.37 reported in the same quarter last year, the failure to meet the current quarter's consensus estimate appears to be a focal point for investors. The revenue miss of approximately 1.5% suggests that despite growth, the pace was slower than the market had anticipated.

Market Reaction and Price Action

The market's initial response to the earnings report has been cautious. In pre-market trading, MOV stock is trading lower, reflecting investor disappointment primarily with the revenue shortfall and the earnings miss against estimates. This price action indicates that the positive year-over-year improvements were already priced in, and the failure to exceed current expectations is driving the negative sentiment.

Third Quarter Fiscal 2026 Highlights

Movado's press release detailed several areas of operational strength, even amid the revenue miss against estimates. The company demonstrated improved profitability and a solid financial position.

• Net sales increased 3.1% to $186.1 million.
• Gross margin expanded to 54.3%, an 80 basis point improvement.
• Operating income nearly doubled to $11.7 million.
• Diluted EPS doubled to $0.42 on a GAAP basis ($0.45 adjusted).
• The company ended the quarter with a robust cash position of $183.9 million and no debt.

Management Commentary and Forward Look

Efraim Grinberg, Chairman and CEO, expressed satisfaction with the results, highlighting the company's ability to capitalize on interest in the fashion watch category and deliver double-digit growth for the Movado brand in direct-to-consumer channels. He also pointed to a strong balance sheet that allows for investment in growth and shareholder returns, noting the approval of a $0.35 per share quarterly dividend.

Notably, the company did not provide a financial outlook for the full 2026 fiscal year, citing "current economic uncertainty and the unpredictable impact of tariff developments." This lack of forward guidance prevents a direct comparison with the analyst estimates for the full year and the upcoming fourth quarter. For context, analysts are currently modeling for Q4 revenue of approximately $182.0 million.

Conclusion

Movado Group's third quarter showcases a company achieving profitable growth and maintaining a pristine balance sheet. However, the failure to meet Wall Street's quarterly sales and earnings targets has tempered investor enthusiasm, as evidenced by the pre-market stock decline. The company's future performance will likely hinge on its ability to re-accelerate revenue growth to meet or exceed market expectations while navigating the uncertain economic and tariff environment.

For a detailed look at historical earnings and future analyst estimates for Movado Group, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.