Movado Group (MOV): 145-Year-Old Watchmaker Is Suddenly Turning Heads Again

Movado Group (NYSE: MOV) released its second-quarter fiscal 2027 results on August 26, revealing a turnaround story for the 145-year-old watchmaker. Adjusted earnings per share soared to $0.54 from $0.23 a year earlier, while net sales increased by 4.9% to $169.8 million. The company announced it will no longer provide annual financial guidance, instead focusing on near-term trends.

A one-time source of strength was $3.2 million in IEEPA duty refunds due to tariffs paid between February 2025 and May 2026, which lifted gross margin to 59.4% from 54.1%. After stripping out this one-time gain, adjusted gross margin still rose 340 basis points to 57.5%. Growth was broad, with both US and international sales up 4.9%, while Latin America and India posted particularly strong results.

Online sales at Movado.com jumped 8%, and Olivia Burton sales grew 23%, driven by small-shaped watches popular in the U.K. and US. Movado also saw a resurgence in traditional watch interest among younger buyers, with the Baby Face mini strap watch selling out over 400 units on movado.com in less than a month. The balance sheet remains robust, with $211.6 million in cash, no debt, and $16.6 million returned to shareholders through dividends thus far in the year.

However, management cautioned that the favorable mix of lower duty rate inventory that boosted margins is temporary and not expected to continue. Second-half gross margin guidance of 55% to 56% reflects this normalization, as higher shipping costs and rising e-commerce volume partially offset margin gains. The Middle East remains a challenge due to tourism-related headwinds, and the company incurred a $0.2 million pretax charge related to a misconduct investigation at a Dubai-based Swiss subsidiary branch.

Despite these concerns, institutional interest is building, with hedge fund ownership rising to 25 funds from 20 in the previous quarter. The stock trades at a forward price-to-earnings ratio of 20.49, pricing in continued mid-single-digit growth rather than a steep re-rating.