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What changed in MOVADO GROUP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MOVADO GROUP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+272 added−304 removedSource: 10-K (2024-03-26) vs 10-K (2023-03-23)

Top changes in MOVADO GROUP INC's 2024 10-K

272 paragraphs added · 304 removed · 236 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

60 edited+8 added−9 removed57 unchanged
Biggest changeMany factors affecting business activities outside the United States could adversely impact this business”, “The Company’s e-commerce business is subject to numerous risks that could have an adverse effect on the Company’s business and results of operations”, “Changes to laws or regulations impacting the industries in which the Company operates could require it to alter its business practices which could have a material adverse effect on its results of operations”, “Changes to tax laws or regulations could have a material adverse effect on the Company’s financial condition and results of operations” and “The Company is subject to complex and evolving laws and regulations regarding privacy and data protection that could result in legal claims, changes to business practices and increased costs that could materially and adversely affect the Company’s results of operations”, under Item 1A.
Biggest changeMany factors affecting business activities outside the United States could adversely impact this business”, “Regulatory restrictions and a changing marketing environment could materially and adversely affect the Company's ability to penetrate key market segments, resulting in the loss of market share and revenue”, “Failure to meet environmental, social and governance regulations, expectations or standards could adversely affect the Company's business, reputation, results of operations and financial condition”, “The Company’s e-commerce business is subject to numerous risks that could have an adverse effect on the Company’s business and results of operations”, “Changes to laws or regulations impacting the industries in which the Company operates could require it to alter its business practices which could have a material adverse effect on its results of operations”, “Changes to tax laws or regulations could have a material adverse effect on the Company’s financial condition and results of operations” and “The Company is subject to complex and evolving laws and regulations regarding privacy and data protection that could result in legal claims, changes to business practices and increased costs that could materially and adversely affect the Company’s results of operations”, under Item 1A.
The Company generally does not have long-term supply commitments with any of its component parts suppliers. Movado (with the exception of certain Movado collections), Ebel and Concord watches, as well as certain Calvin Klein watch styles, are manufactured in Switzerland by independent third-party assemblers using Swiss movements and other parts sourced by the Company’s Swiss operations.
The Company generally does not have long-term supply commitments with any of its component parts suppliers. Movado (with the exception of certain Movado collections), EBEL and Concord watches, as well as certain Calvin Klein watch styles, are manufactured in Switzerland by independent third-party assemblers using Swiss movements and other parts sourced by the 7 Company’s Swiss operations.
It is customary for many of the Company’s customers not to confirm their future orders with formal purchase orders until shortly before their desired delivery dates. 7 CUSTOMER SERVICE, WARRANTY AND REPAIR The Company assists in the retail sales process of its wholesale customers by monitoring their sales and inventories by product category and style.
It is customary for many of the Company’s customers not to confirm their future orders with formal purchase orders until shortly before their desired delivery dates. CUSTOMER SERVICE, WARRANTY AND REPAIR The Company assists in the retail sales process of its wholesale customers by monitoring their sales and inventories by product category and style.
Employee Safety and Well-Being The Company offers programs and benefits to support its employees’ physical, financial, and emotional well-being, including medical coverage, domestic partner benefits, dental and vision coverage, health savings and flexible spending accounts, paid time off, employee assistance programs, voluntary short-term and long-term disability insurance, and supplemental life insurance, among others.
Employee Well-Being The Company offers programs and benefits to support its employees’ physical, financial, and emotional well-being, including medical coverage, domestic partner benefits, dental and vision coverage, health savings and flexible spending accounts, paid time off, employee assistance programs, voluntary short-term and long-term disability insurance, and supplemental life insurance, among others.
Jewelry and Other Fashion Accessories In addition to its core watch business, the Company also designs, sources, markets and distributes jewelry and, to a lesser extent, other fashion accessories such as sunglasses. The Company’s jewelry offerings consist mostly of fashion jewelry, although some fine jewelry pieces are also included in certain collections.
Jewelry and Other Fashion Accessories In addition to its core watch business, the Company also designs, sources, markets and distributes jewelry and, to a lesser extent, other fashion accessories such as sunglasses. The Company’s jewelry offerings consist mostly of fashion jewelry, although some fine jewelry 3 pieces are also included in certain collections.
The Company’s jewelry and other accessories are designed by in-house design teams in cooperation with outside sources and are manufactured by independent contractors in Asia and, to a lesser extent, the United States. MARKETING The Company’s marketing strategy is to communicate a consistent, brand-specific message to the consumer.
The Company’s jewelry and other accessories are designed by in-house design teams in cooperation with outside sources and are manufactured by independent contractors in Asia and, to a lesser extent, the United States. 5 MARKETING The Company’s marketing strategy is to communicate a consistent, brand-specific message to the consumer.
On March 17, 2022, the Company entered into an amended and restated license agreement with Hugo Boss Trade Mark Management GmbH & Co. that extended the term and made certain other changes to the license agreement originally entered into by the parties on December 15, 2004, as previously amended, under which the Company received a worldwide exclusive license to use the trademark HUGO BOSS ® and any other trademarks containing the names “HUGO” or “BOSS”, in connection with the production, promotion and sale of watches.
On March 17, 2022, the Company entered into an amended and restated license agreement with Hugo Boss Trade Mark Management GmbH & Co. that extended the term and made certain other changes to the license agreement originally entered into by the parties on December 15, 2004, as previously amended, under which the Company received a worldwide exclusive license to use trademarks containing the names “HUGO” or “BOSS”, in connection with the production, promotion and sale of watches.
Brands Exclusive $10,000 and over — Luxury $1,300 to $9,900 Concord and Ebel Accessible Luxury $500 to $3,995 Movado Moderate and Fashion $75 to $595 Coach, Hugo Boss, Lacoste, Olivia Burton, MVMT, Tommy Hilfiger and Calvin Klein Mass Market Less than $75 — Exclusive Watches Exclusive watches are usually made of precious metals, including 18 karat gold or platinum, and are often set with precious gems.
Brands Exclusive $10,000 and over — Luxury $1,300 to $9,900 Concord and EBEL Accessible Luxury $395 to $3,995 Movado Moderate and Fashion $75 to $595 Coach, Hugo Boss, Lacoste, Olivia Burton, MVMT, Tommy Hilfiger and Calvin Klein Mass Market Less than $75 — Exclusive Watches Exclusive watches are usually made of precious metals, including 18 karat gold or platinum, and are often set with precious gems.
The Company retains adequate levels of component parts to facilitate both the manufacturing of its watches as well as the after-sales service of its watches for an extended period of time after the discontinuance of the manufacturing of such watches.
The Company generally retains adequate levels of component parts to facilitate both the manufacturing of its watches as well as the after-sales service of its watches for an extended period of time after the discontinuance of the manufacturing of such watches.
The Company believes that customers’ familiarity with its sales approach has facilitated, and should continue to facilitate, the introduction of new products through its distribution network. The Company permits the return of damaged or defective products. In addition, although the Company generally has no obligation to do so, it accepts other returns from customers in certain instances.
The Company believes that customers’ familiarity with its sales approach has facilitated, and should continue to facilitate, the introduction of new products through its distribution network. The Company permits the return of defective products. In addition, although the Company generally has no obligation to do so, it accepts other returns from customers in certain instances.
REGULATION We are subject to laws and regulations regarding customs (including tariffs and retaliatory tariffs), tax, employment, privacy, truth-in-advertising, consumer product safety, waste management, zoning and occupancy and other laws and regulations that regulate and/or govern the importation, packaging, promotion, sale and disposal of consumer products and our corporate, retail and distribution operations.
REGULATION We are subject to laws and regulations regarding customs (including tariffs and retaliatory tariffs), tax, employment, privacy, data protection, truth-in-advertising, consumer product safety, environmental, waste management, zoning and occupancy and other laws and regulations that regulate and/or govern the importation, packaging, promotion, sale and disposal of consumer products and our corporate, retail and distribution operations.
Since then, strategic acquisitions of watch brands and their subsequent growth, along with license agreements, have played an important role in the expansion of the Company’s brand portfolio. Over time, the Company has developed its brand-building reputation and distinctive image across an expanding number of brands and geographic markets.
Since then, strategic acquisitions of watch brands and their subsequent growth, along with license agreements, have played an important role in the expansion of the Company’s brand portfolio. Over time, the Company has developed its brand-building reputation and approach across an expanding number of brands and geographic markets.
HUMAN CAPITAL The Company believes that trust, respect, passion, and teamwork are critical to achieving its goals and therefore promotes a culture built around these values.
HUMAN CAPITAL The Company believes that trust, respect, passion, creativity, ambition, and teamwork are critical to achieving its goals and therefore promotes a culture built around these values.
BRANDS The Company designs, develops, sources, markets and distributes products under the following brands: Owned Brands Concord Concord was founded through the harmonious collaboration of five Swiss visionaries in 1908. In 1979, Concord spearheaded the Swiss quartz revolution with one of the most important watches of the twentieth century: the Concord Delirium.
BRANDS The Company designs, develops, sources, markets and distributes products under the following brands: Owned Brands Concord Concord was founded through the harmonious collaboration of five Swiss visionaries in 1908. In 1979, Concord spearheaded the Swiss quartz revolution with one of the most important watches of the twentieth century: the Concord Delirium - the world's thinnest watch.
The Company actively seeks to protect and enforce its intellectual property rights by working with industry associations, anti-counterfeiting organizations, private investigators and law enforcement authorities, including customs authorities in the United States and internationally, and, when necessary, suing infringers of its trademarks, patents and other intellectual property rights.
The Company actively seeks to protect and enforce its intellectual property rights by working with industry associations, anti-counterfeiting organizations, private investigators and law enforcement authorities, including customs authorities in the United States and internationally, and, when necessary, suing infringers of its intellectual property rights.
Tommy Hilfiger Watches and Jewelry Reflecting the fresh, fun all-American style for which Tommy Hilfiger is known, Tommy Hilfiger watches are water resistant and feature quartz, digital or analog-digital movements, with stainless steel, aluminum, gold plated or two-tone cases and bracelets. Straps feature genuine leather, vegan leather, fabric, silicone or recycled plastics.
Tommy Hilfiger Watches and Jewelry Reflecting the fresh, fun, all-American style for which Tommy Hilfiger is known, Tommy Hilfiger watches are water resistant and feature quartz, digital or analog-digital movements, with stainless steel, aluminum, gold plated or two-tone cases and bracelets. Straps may feature genuine leather, leather alternatives, fabric, silicone or recycled or other plastics.
Inspired by vintage, fashion trends and nature, the Olivia Burton design team blends contemporary and vintage styles to conceive new collections periodically. As well as innovative timepieces, including vegan, eco-friendly and unisex collections, Olivia Burton has a large and growing collection of jewelry styles that exhibit the same attention to detail seen in its watches.
Inspired by vintage, fashion trends and nature, the Olivia Burton design team blends contemporary and vintage styles to conceive new collections. As well as innovative timepieces, including unisex collections, Olivia Burton has a large and growing collection of jewelry styles that exhibit the same attention to detail seen in its watches.
Watch product development for these brands takes place in the Company’s Asia operations. For the Company’s Ebel and Concord watch brands and various Movado brand watch styles, the watch design phase is performed by a combination of in-house and freelance designers in Europe and the United States while product development is carried out in the Company’s Swiss operations.
For the Company’s EBEL and Concord watch brands and various Movado brand watch styles, the watch design phase is performed by a combination of in-house and freelance designers in Europe and the United States while product development is carried out in the Company’s Swiss operations.
Major selling seasons in certain international markets center on significant local holidays that occur in late winter or early spring. The second half of each of the fiscal years ended January 31, 2023, 2022 and 2021 accounted for 54.0%, 57.9% and 68.8% of the Company’s net sales, respectively.
Major selling seasons in certain international markets center on significant local holidays that occur in late winter or early spring. The second half of each of the fiscal years ended January 31, 2024, 2023 and 2022 accounted for 54.6%, 54.0% and 57.9% of the Company’s net sales, respectively.
The Company develops advertising campaigns individually for each of the Company’s brands, utilizing outside agencies as deemed appropriate. These campaigns are directed primarily to the end consumer rather than to trade customers. The Company’s advertising takes into account the image and price range of each brand.
The Company develops advertising campaigns individually for each of the Company’s brands, utilizing outside agencies as deemed appropriate. These campaigns are directed primarily to the end consumer rather than to trade customers. The Company’s advertising considers the image and price range of each brand.
OPERATING SEGMENTS The Company conducts its business primarily in two operating segments: Watch and Accessory Brands and Company Stores. For operating segment data and geographic segment data for the years ended January 31, 2023, 2022 and 2021, see Note 20 to the Consolidated Financial Statements regarding Segment and Geographic Information.
OPERATING SEGMENTS The Company conducts its business primarily in two operating segments: Watch and Accessory Brands and Company Stores. For operating segment data and geographic segment data for the years ended January 31, 2024, 2023 and 2022, see Note 18 to the Consolidated Financial Statements regarding Segment and Geographic Information.
As of January 31, 2023, women represented approximately 64% of the Company's global employees, and underrepresented minorities (defined as those who identify as Black/African American, Hispanic, Native American, Asian, Pacific Islander and/or two or more races) represented approximately 55% of the Company's U.S. employees.
As of January 31, 2024, women represented approximately 62% of the Company's global employees, and underrepresented minorities (defined as those who identify as Black/African American, Hispanic, Native American, Asian, Pacific Islander and/or two or more races) represented approximately 55% of the Company's U.S. employees.
The Company is highly selective in its licensing strategy and chooses to enter into long-term agreements with only powerful brands which we deem to have strong positions in their respective businesses. 2 The following table sets forth the brands licensed by the Company and the year in which the Company launched each licensed brand for watches.
The Company is highly selective in its licensing strategy and chooses to enter into long-term agreements with only powerful brands which it believes have strong positions in their respective businesses. The following table sets forth the brands licensed by the Company and the year in which the Company launched each licensed brand for watches.
The Company’s future success will depend, to a significant degree, upon its continued ability to compete effectively with regard to, among other things, the style, quality, price, advertising, marketing, distribution and availability of supply of the Company’s watches and other products.
The Company’s future success will depend, to a significant degree, upon its continued ability to compete effectively 8 regarding, among other things, the style, quality, price, advertising, marketing, distribution and availability of supply of the Company’s watches and other products.
Company advertising is placed in magazines and other print media, on radio and television, online, including websites and social media platforms, in catalogs, on outdoor signs and through other promotional materials. Marketing expenses totaled 16.8%, 16.3%, and 16.9% of net sales in fiscal 2023, 2022 and 2021, respectively.
Company advertising is placed in magazines and other print media, on radio and television, online, including websites and social media platforms, in catalogs, on outdoor signs and through other promotional materials. Marketing expenses totaled 19.2%, 16.8%, and 16.3% of net sales in fiscal 2024, 2023 and 2022, respectively.
We generally market our fashion accessories through the same distribution channels as our watches and use similar marketing approaches. Sales of jewelry accounted for 6.7% of our consolidated net sales in fiscal year 2023.
We generally market our fashion accessories through the same distribution channels as our watches and use similar marketing approaches. Sales of jewelry accounted for 7.5% of our consolidated net sales in fiscal year 2024.
The Company Stores segment includes the Company’s retail outlet business. 6 The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all non-U.S. Company operations. The vast majority of the Company’s tangible International assets are owned by the Company’s Swiss and Hong Kong subsidiaries.
The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all non-U.S. Company operations. The vast majority of the Company’s tangible International assets are owned by the Company’s Swiss and Hong Kong subsidiaries.
The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, of quality owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping.
The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, of quality owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Company Stores segment includes the Company’s retail outlet business.
Mass Market Watches Mass market watches typically consist of digital watches and analog watches made from stainless steel, brass and/or plastic and are manufactured in Asia. Well-known brands include Casio, Pulsar, Seiko and Timex. The Company does not compete in the mass market watch category.
Market leaders for smartwatches include Apple, Samsung and Huawei. Mass Market Watches Mass market watches typically consist of digital watches and analog watches made from stainless steel, brass and/or plastic and are manufactured in Asia. Well-known brands include Casio, Pulsar, Seiko and Timex. The Company does not compete in the mass market watch category.
Approximately 31% of the Company’s non-retail employees have been with the Company for more than 10 years, and approximately 48% have been with the Company for at least five years.
Approximately 29% of the Company’s non-retail employees have been with the Company for more than 10 years, and approximately 51% have been with the Company for at least five years.
T hese stores serve as effective channels to sell current and discontinued models and factory seconds of all of the Company’s watches. SEASONALITY The Company’s sales are traditionally greater during the Christmas and holiday season. Consequently, the Company’s net sales historically have been higher during the second half of its fiscal year.
These stores serve as effective channels to sell current and discontinued models and factory seconds of the Company’s watches, jewelry, and other accessories. 6 SEASONALITY The Company’s sales are traditionally greater during the Christmas and holiday season. Consequently, the Company’s net sales historically have been higher during the second half of its fiscal year.
The brand’s design catalogue has since expanded into more than 20 unique watch collections, sunglasses, blue light eyewear and jewelry. Olivia Burton Olivia Burton is a brand founded by two friends who started out as fashion buyers who recognized a gap in the market for unique and feminine women’s watch styles.
The brand’s design catalogue has since expanded to include numerous unique watch collections, sunglasses, blue light blocking eyewear and jewelry. 4 Olivia Burton Olivia Burton is a brand founded by two friends who started out as fashion buyers who recognized a gap in the market for unique and feminine women’s watch styles.
The Company licenses the trademark COACH ® and related trademarks on an exclusive worldwide basis for use in connection with the manufacture, distribution, advertising and sale of watches pursuant to an amended license agreement with Tapestry, Inc. which is scheduled to expire on June 30, 2025. 8 Under an amended and restated license agreement with Tommy Hilfiger Licensing LLC entered into on March 20, 2020 and effective as of January 1, 2020 (the “Tommy Hilfiger License Agreement”), the Company has the exclusive license to use the trademark TOMMY HILFIGER ® and related trademarks in connection with the manufacture, marketing, advertising, sale and distribution of watches and jewelry worldwide (excluding sales to certain accounts in Japan).
Under an amended and restated license agreement with Tommy Hilfiger Licensing LLC ("Tommy Hilfiger") entered into on March 20, 2020 and effective as of January 1, 2020 (the “Tommy Hilfiger License Agreement”), the Company has the exclusive license to use the trademark TOMMY HILFIGER ® and related trademarks in connection with the manufacture, marketing, advertising, sale and distribution of watches and jewelry worldwide (excluding sales to certain accounts in Japan).
In addition to the Company’s Calvin Klein, Coach, Hugo Boss, Lacoste, Olivia Burton, MVMT and Tommy Hilfiger brands, well-known brand names of watches in the moderate and fashion category include Anne Klein, Bulova, Citizen, Fossil, Guess, Seiko, Michael Kors, Daniel Wellington and Swatch. Market leaders for smartwatches include Apple, Samsung and Garmin.
Moderate and fashion watches are manufactured primarily in Asia and Switzerland. In addition to the Company’s Calvin Klein, Coach, Hugo Boss, Lacoste, MVMT, Olivia Burton and Tommy Hilfiger brands, well-known brand names of watches in the moderate and fashion category include Anne Klein, Bulova, Citizen, Fossil, Guess, Seiko, Michael Kors, Daniel Wellington and Swatch.
Movado The Movado brand is renowned for its iconic Museum® dial and modern design aesthetic. Since its founding in La Chaux-de-Fonds, Switzerland in 1881, Movado has earned more than 100 patents and 200 international awards for artistry and innovation in watch design and technology, and Movado timepieces have won world renown for their unique beauty and timeless design.
Since its founding in La Chaux-de-Fonds, Switzerland in 1881, Movado has earned more than 100 patents and 200 international awards for artistry and innovation in watch design and technology, and Movado timepieces have won world renown for their unique beauty and timeless design. The Movado jewelry collection reflects the same timeless modern design aesthetic as its watches.
Designed in 1947 by Bauhaus-influenced artist Nathan George Horwitt, the watch dial defined by a solitary dot at 12 o’clock, symbolizing the sun at high noon, has been acclaimed for purity of design unrivaled in the history of time-keeping.
Movado is a hallmark of some of the most famous timepieces ever created, most notably, the Movado Museum® Watch. Designed in 1947 by Bauhaus-influenced artist Nathan George Horwitt, the watch dial defined by a solitary dot at 12 o’clock, symbolizing the sun at high noon, has been acclaimed for purity of design unrivaled in the history of time keeping.
When Horwitt’s dial was selected for the permanent design collection of the Museum of Modern Art, New York, in 1960, it became the first watch dial ever awarded this distinction. This legendary dial is regarded as an icon of Modernism.
When Horwitt’s dial was selected for the permanent design collection of the Museum of Modern Art, New York, in 1960, it became the first watch dial ever awarded this distinction. This legendary dial is regarded as an icon of Modernism. A trademarked and award-winning design, the celebrated single dot dial now distinguishes a wide range of Movado timepieces.
Diversity & Inclusion The Company seeks to provide a work environment in which all employees are treated with dignity and respect and receive equal treatment regardless of age, color, disability, marital or parental status, national origin, race, religious beliefs, sexual orientation, gender identity, veteran status, or any other legally protected status.
Tuition reimbursement is available to full-time employees in the United States. 9 Diversity & Inclusion The Company seeks to provide a work environment in which all employees are treated with dignity and respect and are not discriminated against on the basis of age, color, disability, marital or parental status, national origin, race, religious beliefs, sexual orientation, gender identity, veteran status, or any other legally protected status.
The Company recognizes that embracing an inclusive workforce leads to greater innovation, increased productivity, and higher job satisfaction. Accordingly, the Company strives to welcome and foster ideas and to create workplaces that bring together people with diverse backgrounds. Diversity and inclusion is a cornerstone of the Company's corporate social responsibility strategy.
The Company recognizes that embracing an inclusive workforce leads to greater innovation, increased productivity, and higher job satisfaction. Accordingly, the Company strives to welcome and foster ideas and to create workplaces that bring together people with diverse perspectives.
Demographics The following table summarizes the Company’s global workforce as of January 31, 2023: 9 Full-Time Employees Part-Time Employees Temporary Employees Total Global 992 379 86 1,457 Americas 602 355 74 1,031 Asia-Pacific 143 - 4 147 Europe, Middle East & Africa 247 24 8 279 Attraction and Retention of Employees The Company strives to attract and retain a highly talented and engaged workforce and believes that its supportive culture, dedication to employee safety and well-being, competitive compensation and benefits programs, employee development and training offerings, diversity and inclusion initiatives, and philanthropic and community engagement help in this endeavor.
Demographics The following table summarizes the Company’s global workforce as of January 31, 2024: Full-Time Employees Part-Time Employees Temporary Employees Total Global 1,089 387 72 1,548 Americas 582 341 59 982 Asia-Pacific 209 - 5 214 Europe, Middle East & Africa 298 46 8 352 Attraction and Retention of Employees The Company strives to attract and retain a highly talented and engaged workforce and believes that its supportive culture, dedication to employee well-being, competitive compensation and benefits programs, employee development and training offerings, diversity and inclusion initiatives, and philanthropic and community engagement help in this endeavor.
The design phase includes the creation of artistic and conceptual renderings while product development involves the construction of prototypes. The Company’s licensed brand watches, Olivia Burton watches, MVMT watches and certain Movado brand watch styles are designed by in-house design teams in cooperation with outside sources, including (in the case of the licensed brands) licensors’ design teams.
The Company’s licensed brand watches, Olivia Burton watches, MVMT watches and certain Movado brand watch styles are designed by in-house design teams in cooperation with outside sources, including (in the case of the licensed brands) licensors’ design teams. Watch product development for these brands takes place in the Company’s Asia operations.
Multiple companies, however, compete with Movado Group with respect to one or more of its brands. Certain of these companies have, and other companies that may enter the Company’s markets in the future may have, greater financial, distribution, marketing and advertising resources than the Company.
Certain of these companies have, and other companies that may enter the Company’s markets in the future may have, greater financial, distribution, marketing and advertising resources than the Company.
INDUSTRY OVERVIEW The largest markets for watches are North America, Europe, the Middle East, Latin America and Asia. The Company divides the watch market into five principal categories as set forth in the following table. Market Category Suggested Retail Price Range Primary Category of Movado Group, Inc.
The Company divides the watch market into five principal categories as set forth in the following table. Market Category Suggested Retail Price Range Primary Category of Movado Group, Inc.
Originally empowered by crowdfunding and built digitally with a community of social media followers, their philosophy was to create a brand offering quality, sleek watches that are accessible to young consumers. MVMT’s designs and messaging embody the spirit of adventuring, creating, and daring to disrupt the norm.
MVMT The MVMT brand was founded in a Southern California apartment in 2013 by two entrepreneurs. Originally empowered by crowdfunding and built digitally with a community of social media followers, their philosophy was to create a brand offering quality, sleek watches that are accessible to young consumers.
The Company has registered the trademarks CONCORD®, EBEL®, MOVADO ® , MVMT®, OLIVIA BURTON ® and certain other related trademarks with customs authorities in the United States and certain other countries in order to assist such authorities in their efforts to prevent the importation of counterfeit goods or goods bearing confusingly similar trademarks.
The Company has registered certain of its brands' trademarks with customs authorities in the United States and certain other countries in order to assist such authorities in their efforts to prevent the importation of counterfeit goods or goods bearing confusingly similar trademarks. Customs regulations generally do not, however, protect against the unauthorized importation of genuine products.
These watches typically are made with stainless steel, ceramic, gold plating or a combination of gold plating and stainless steel. Accessible luxury watches are manufactured primarily in Switzerland, although some are manufactured in Asia.
These watches typically are made with stainless steel, ceramic, gold plating or a combination of gold plating and stainless steel. Accessible luxury watches are manufactured primarily in Switzerland, although some are manufactured in Asia. In addition to a majority of the Company’s Movado watches, well-known brand names of accessible luxury watches include Gucci, Rado, Michele and Raymond Weil.
In 2017 Ebel successfully relaunched its most iconic collection, the Ebel Sports Classic, which is renowned for its iconic bracelet design with signature wave-shaped links that helped to establish the sport-chic category in the late 70’s. Ebel continues to create timepieces that embody luxury and contemporary elegance.
Since its inception, EBEL has remained true to its core values, manufacturing fine Swiss watches that marry beauty and function. In 2017 EBEL successfully relaunched its most iconic collection, the EBEL Sport Classic, which is renowned for its iconic bracelet design with signature wave-shaped links that helped to establish the sport-chic category in the late 70’s.
Customs regulations generally do not, however, protect against the unauthorized importation of genuine products. COMPETITION The markets for each of the Company’s watch and jewelry brands are highly competitive. With the exception of Swatch Group, Ltd., a large Swiss-based competitor, no single company directly competes with the Company across all of its brands.
COMPETITION The markets for each of the Company’s watch and jewelry brands are highly competitive. Except for Swatch Group, Ltd., a large Swiss-based competitor, no single company directly competes with the Company across all of its brands. Multiple companies, however, compete with Movado Group with respect to one or more of its brands.
The Company also partners with local colleges to promote deeper learning on specific topics. Tuition reimbursement is available to full-time employees in the United States.
The Company also partners with local colleges to promote deeper learning on specific topics.
Featuring timeless, minimalist designs that highlight Calvin Klein's globally-recognized aesthetic, the collection of men's and women's accessories reflects the sensuality and boldness that has come to define the brand for over 50 years. 5 DESIGN AND PRODUCT DEVELOPMENT The Company’s offerings undergo two phases before they are produced for sale to customers: design and product development.
Calvin Klein Watches and Jewelry The Calvin Klein collection of watches and jewelry was created with the modern customer in mind. Featuring timeless, minimalist designs that highlight Calvin Klein's globally recognized aesthetic, the collection of men's and women's accessories reflects the sensuality and boldness that has come to define the brand for over 50 years.
The Company has adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including the Company’s Chief Executive Officer, Chief Financial Officer and principal accounting and financial officers, which is posted on the Company’s website.
The information posted on the investor relations webpage is not a part of this Annual Report or any other document we file with the SEC, and its inclusion is as an inactive textual reference only. 10 The Company has adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including the Company’s Chief Executive Officer, Chief Financial Officer and principal accounting and financial officers, which is posted on the Company’s website.
This was the first watch ever produced to be less than one millimeter thick – a world record to this day. To mark its 110 th anniversary, Concord introduced a new logo depicting a knot. The knot signifies the brand’s foundation through harmonious unity and its laudable technical achievements and distinctive designs.
More recently, to mark its 110 th anniversary, Concord introduced a new logo depicting a knot. The knot signifies the brand’s foundation through harmonious unity and its laudable technical achievements and distinctive designs. The contemporary Mariner SL watch embodies this spirit and contributes to Concord’s strong legacy.
Community Engagement The Company is committed to engaging with and giving back to its communities and facilitates opportunities for its employees to donate time and make monetary contributions to charitable organizations. The Company is the corporate sponsor of The Movado Group Foundation, a nonprofit organization that supports philanthropic campaigns in the United States with particular emphasis on sustaining the arts.
Community Engagement The Company is committed to engaging with and giving back to its communities and facilitates opportunities for its brands and employees to donate time and make monetary contributions to charitable organizations.
Expressions of Movado’s commitment to the fine and cultural arts encompass commissioned watch designs by famed artists, affiliations with talented brand ambassadors, sponsorship of major arts institutions and support of emerging artists. MVMT The MVMT brand was founded in a Southern California apartment in 2013 by two entrepreneurs.
Along with its long, rich heritage of design innovation, the Movado brand experience is also defined by a close, enduring association with the arts. Expressions of Movado’s commitment to the fine and cultural arts encompass commissioned watch designs by famed artists, affiliations with talented brand ambassadors, sponsorship of major arts institutions and support of emerging artists.
The SEC maintains a website that contains reports, proxy and information statements, and other information regarding the Company at www.sec.gov .
The SEC maintains a website that contains reports, proxy and information statements, and other information regarding the Company at www.sec.gov . Investors and others should note that the Company announces material financial information to its investors using its press releases, SEC filings and public conference calls and webcasts.
Brand Licensor Calendar Year Launched COACH Tapestry, Inc. 1999 TOMMY HILFIGER Tommy Hilfiger Licensing LLC 2001 HUGO BOSS Hugo Boss Trade Mark Management GmbH & Co 2006 LACOSTE Lacoste S.A., Sporloisirs S.A. and Lacoste Alligator S.A. 2007 CALVIN KLEIN Calvin Klein, Inc. 2022 From 2013 through December 2022, the Company's licensed brands portfolio included the Scuderia Ferrari brand pursuant to a license agreement with Ferrari S.p.A.
Brand Licensor Calendar Year Launched COACH Tapestry, Inc. 1999 TOMMY HILFIGER Tommy Hilfiger Licensing LLC 2001 HUGO BOSS Hugo Boss Trade Mark Management GmbH & Co 2006 LACOSTE Lacoste S.A., Sporloisirs S.A. and Lacoste Alligator S.A. 2007 CALVIN KLEIN Calvin Klein, Inc. 2022 2 INDUSTRY OVERVIEW The largest markets for watches are North America, Europe, the Middle East, Latin America and Asia.
The current Mariner SL watch captures this spirit and helps carry on Concord’s strong legacy. Ebel Ebel’s success has been built upon the fusion of technical excellence and a passion for aesthetically daring and timeless, distinctive design. A passion for innovation and excellence in watch design has always been at the heart of the Ebel brand.
EBEL EBEL’s success has been built upon the fusion of technical excellence and a passion for aesthetically daring and timeless, distinctive design. A passion for innovation and excellence in watch design has always been at the heart of the EBEL brand. EBEL was founded in 1911 by husband and wife Eugène Blum and Alice Lévy, in La Chaux-de-Fonds, Switzerland.
Unfilled orders include both confirmed orders and orders that the Company believes will be confirmed based on the historical experience with the customers.
BACKLOG At March 20, 2024, the Company had unfilled orders of $41.0 million compared to $40.7 million at March 20, 2023 and $60.9 million at March 21, 2022. Unfilled orders include both confirmed orders and orders that the Company believes will be confirmed based on the historical experience with the customers.
In addition to a majority of the Company’s Movado watches, well-known brand names of accessible luxury watches include Gucci, Rado, Michele and Raymond Weil. 3 Moderate and Fashion Watches Most moderate and fashion watches are quartz-analog watches, some of which may also included connected technology for transmitting data wirelessly between the watch and a smartphone or other device.
Moderate and Fashion Watches Most moderate and fashion watches are quartz-analog watches, some of which may also include connected technology for transmitting data wirelessly between the watch and a smartphone or other device. These watches typically are made with stainless steel, brass, plastic, gold plating, or a combination of gold plating and stainless steel.
The Company continues to present programs that educate its employees on diversity, inclusion and belonging, to participate in the CEO Action for Diversity & Inclusion and the Open to All campaign and to support external organizations' efforts in these areas. 10 As of January 31, 2023, the Company had an eight-member Board of Directors, including two female Board members and multiple Board members from underrepresented minorities.
As of January 31, 2024, the Company had an eight-member Board of Directors, including two female Board members and three Board members from underrepresented minorities.
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These watches typically are made with stainless steel, brass, plastic, gold plating, or a combination of gold plating and stainless steel. Moderate and fashion watches are manufactured primarily in Asia and Switzerland.
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EBEL continues to create timepieces that embody luxury and contemporary elegance. Movado The Movado brand is renowned for its iconic Museum® dial and modern design aesthetic.
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Ebel was founded in 1911 by husband and wife Eugène Blum and Alice Lévy, in La Chaux-de-Fonds, Switzerland. Since its inception, Ebel has remained true to its core values, manufacturing fine Swiss watches that marry beauty and function.
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MVMT’s designs and messaging embody the spirit of adventuring, creating, and daring to disrupt the norm.
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The Movado jewelry collection reflects the same timeless modern design aesthetic as its watches. Movado is a hallmark of some of the most famous timepieces ever created, most notably, the Movado Museum® Watch.
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DESIGN AND PRODUCT DEVELOPMENT The Company’s offerings undergo two phases before they are produced for sale to customers: design and product development. The design phase includes the creation of artistic and conceptual renderings while product development involves the construction of prototypes.
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A trademarked and award-winning design, the celebrated single dot dial now distinguishes a wide range of Movado timepieces. 4 Along with its long, rich heritage of design innovation, the Movado brand experience is also defined by a close, enduring association with the arts.
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The Company licenses the trademark COACH ® and related trademarks on an exclusive worldwide basis for use in connection with the manufacture, distribution, advertising and sale of watches pursuant to an amended license agreement with Tapestry, Inc. scheduled to expire on June 30, 2025.
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Calvin Klein Watches and Jewelry The Calvin Klein collection of watches and jewelry was created with the modern customer in mind.
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The Company has notified Tommy Hilfiger of its intent to extend the agreement and will submit a new business plan for Tommy Hilfiger's approval in the first half of fiscal 2025.
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The first half of fiscal year 2021 was negatively impacted by the COVID-19 pandemic. BACKLOG At March 20, 2023, the Company had unfilled orders of $40.7 million compared to $60.9 million at March 21, 2022 and $46.0 million at March 22, 2021.
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The Company is the corporate sponsor of The Movado Group Foundation, a nonprofit organization that supports philanthropic campaigns in the United States with particular emphasis on sustaining the arts. Programs and support vary by year, need and available resources.
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The Company aims to expand the diversity of its workforce, especially among senior leadership. To help achieve this objective, the Company signed the parity pledge, demonstrating its intention to interview at least one woman and one underrepresented minority for each open position, Vice President and above.
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The Company intends to also use its investor relations webpage at https://www.movadogroup.com/investors/overview as a means of disclosing information about the Company, its services and other matters and for complying with its disclosure obligations under Regulation FD. The information the Company posts on its investor relations webpage may be deemed material.
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The Company also strives to further emphasize diversity considerations in its product design process and is focused on increasing the diversity of the Company's marketing chain.
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Accordingly, investors should monitor the investor relations webpage, in addition to following the Company’s press releases, SEC filings and public conference calls and webcasts.
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Programs and support vary by year, need and available resources.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeMany factors affecting business activities outside the United States could adversely impact this business. Over 80% of the Company's product unit volume originates from Asia, with the vast majority coming from China. Substantially all of the remaining products originate from Europe. The Company also generates approximately 55.6% of its revenue from international sources.
Biggest changeThis could also result in the potential for impairment surrounding our long-lived assets. A significant portion of the Company’s business is conducted outside of the United States. Many factors affecting business activities outside the United States could adversely impact this business. Over 80% of the Company's product unit volume originates from Asia, with the vast majority coming from China.
Alternatively, the Company may seek to shift production outside of China, resulting in significant costs and disruption to the Company’s operations and materially and adversely affecting its sales, costs and results of operations.
Alternatively, the Company may seek to shift production outside of China, resulting in significant costs and disruption to the Company’s operations and materially and adversely affecting its, costs, sales and results of operations.
Changes to existing laws and regulations or new laws and regulations could impose new requirements and additional costs on the Company and its suppliers, making the Company’s products or packaging more costly to produce, forcing the Company to change its existing business practices.
Changes to existing laws and regulations or new laws and regulations could impose new requirements and additional costs on the Company and its suppliers, making the Company’s products or packaging more costly to produce and forcing the Company to change its existing business practices.
Although the Company believes it has taken reasonable and appropriate actions to protect the security of this information, if the Company were to experience a security breach, acts of vandalism, ransomware attacks, computer viruses, misplaced or lost data, programming and/or human errors or other similar events, it could result in government enforcement actions and private litigation, attract a substantial amount of media attention, and damage the Company’s reputation and its relationships with its customers and employees, materially adversely affecting the Company’s sales and results of operations.
Although the Company believes it has taken reasonable and appropriate actions to protect the security of this information, if the Company were to experience a security breach, acts of vandalism, ransomware attacks, computer viruses, misplaced or lost data, programming and/or human errors or other similar events, it could result in government enforcement actions and private 20 litigation, attract a substantial amount of media attention, and damage the Company’s reputation and its relationships with its customers and employees, materially adversely affecting the Company’s sales and results of operations.
If the Company cannot efficiently respond to disruptions in our operations, for example, by finding alternative suppliers or distributors or quickly repairing damaged systems, it may be late in fulfilling customer 13 orders, thereby resulting in reputational damage, lost sales, or cancellation charges, any of which could materially harm its financial condition and results of operations.
If the Company cannot efficiently respond to disruptions in our operations, for example, by finding alternative suppliers or distributors or quickly repairing damaged systems, it may be late in fulfilling customer orders, thereby resulting in reputational damage, lost sales, or cancellation charges, any of which could materially harm its financial condition and results of operations.
There is a risk that the Company will not properly perceive changes in trends or tastes, which may result in the failure to adapt the Company’s products accordingly. In addition, new model designs are regularly introduced into the market for all brands to keep ahead of evolving fashion trends as well as to initiate new trends.
There is a risk that the Company will not properly perceive changes in trends or tastes, which may result in the failure to adapt the Company’s products accordingly. In addition, new model designs are regularly introduced 13 into the market for all brands to keep ahead of evolving fashion trends as well as to initiate new trends.
These transactions might include proxy contests, tender offers, 23 mergers or other purchases of shares of common stock that could give stockholders the opportunity to realize a premium over the then-prevailing market price for shares of the Company’s common stock. The Company’s stock price could fluctuate and possibly decline due to changes in revenue, operating results and cash flows.
These transactions might include proxy contests, tender offers, mergers or other purchases of shares of common stock that could give stockholders the opportunity to realize a premium over the then-prevailing market price for shares of the Company’s common stock. The Company’s stock price could fluctuate and possibly decline due to changes in revenue, operating results and cash flows.
Failure to properly judge consumer demand and properly manage inventory could have a material adverse effect on profitability and liquidity. 18 If the Company were to lose its relationship with any of its key customers or distributors or any of such customers or distributors were to experience financial difficulties, there may be a significant loss of revenue and operating results.
Failure to properly judge consumer demand and properly manage inventory could have a material adverse effect on profitability and liquidity. If the Company were to lose its relationship with any of its key customers or distributors or any of such customers or distributors were to experience financial difficulties, there may be a significant loss of revenue and operating results.
Conversely, if consumer demand is higher than expected, insufficient inventory levels could result in unfilled customer orders, loss of revenue and an unfavorable impact on customer relationships. Volatility and uncertainty related to macro-economic factors make it difficult for the Company to forecast customer demand in its various markets.
Conversely, if consumer demand is higher than expected, insufficient inventory levels could result in unfilled customer orders, loss of revenue and an unfavorable impact on customer relationships. Volatility and uncertainty related to macro-economic factors make it difficult for the Company to forecast 16 customer demand in its various markets.
Any loss of an independent manufacturer or disruption in the supply chain with respect to critical component parts may result in the Company’s inability to deliver quality goods in a timely manner and could have an adverse effect on customer relations, brand image, net sales and results of operations.
Any loss of an independent manufacturer or disruption in the supply chain with respect to critical component parts may result in the Company’s inability to deliver quality goods in a timely manner and could have an adverse effect on customer 17 relations, brand image, net sales and results of operations.
Additionally, if the Company cannot complete construction in new stores within the planned timeframes, cost overruns and lost revenue could adversely affect the profitability of the Company Stores segment. The Company’s e-commerce business is subject to numerous risks that could have an adverse effect on the Company’s business and results of operations.
Additionally, if the Company cannot complete construction in new stores within the planned timeframes, cost overruns and lost revenue could adversely affect the profitability of the Company Stores segment. 15 The Company’s e-commerce business is subject to numerous risks that could have an adverse effect on the Company’s business and results of operations.
Factors that could affect this business activity vary by region and market and generally include, without limitation: • instability or changes in social, political, public health and/or economic conditions that could disrupt the trade activity in the countries where the Company’s manufacturers, suppliers and customers are located; • supply chain disruptions related to global, regional or local circumstance that fall outside of the Company's control; • the imposition of additional duties, taxes and other charges on imports and exports; • changes in foreign laws and regulations; • inflation and increases in commodity prices (including energy); • the adoption or expansion of trade sanctions; • recessions in foreign economies; and • a significant change in currency valuation in specific countries or markets.
Factors that could affect this business activity vary by region and market and generally include, without limitation: • instability or changes in social, political, public health, environmental, and/or economic conditions that could disrupt the production or trade activity in the countries where the Company’s manufacturers, suppliers and customers are located; • supply chain disruptions related to global, regional or local circumstance that fall outside of the Company's control; • the imposition of additional duties, taxes and other charges on imports and exports; • changes in foreign laws and regulations; • inflation and increases in commodity prices (including energy); • the adoption or expansion of trade sanctions; • recessions in foreign economies; and • a significant change in currency valuation in specific countries or markets.
The Company’s failure to successfully respond to these risks might adversely affect sales in the Company’s e-commerce business as well as damage its reputation and brands. In addition, online commerce is subject to increasing regulation by states, the U.S. federal government, and various foreign jurisdictions.
The Company’s failure to successfully respond to these risks might adversely affect sales in the Company’s e-commerce business as well as damage its reputation and brands. In addition, online commerce is subject to increasing privacy regulation by states, the U.S. federal government, and various foreign jurisdictions.
Moreover, the laws of some foreign countries, including some in which the Company sells its products, do not protect intellectual property rights to the same extent as do the laws of the United States, which could make it more difficult to 21 successfully defend such challenges to them.
Moreover, the laws of some foreign countries, including some in which the Company sells its products, do not protect intellectual property rights to the same extent as do the laws of the United States, which could make it more difficult to successfully defend such challenges to them.
Any of the foregoing could materially adversely affect the Company’s results of operations and financial condition. 22 If the Company were to experience a significant privacy breach, it could be subject to costly government enforcement actions and private litigation and suffer significant negative publicity which could materially and adversely affect the Company’s results of operations.
Any of the foregoing could materially adversely affect the Company’s results of operations and financial condition. If the Company were to experience a significant privacy breach, it could be subject to costly government enforcement actions and private litigation and suffer significant negative publicity which could materially and adversely affect the Company’s results of operations.
Although sales through the Company’s e-commerce channels have constituted a minority of its net sales historically, such sales are growing quickly, and the Company expects to continue to grow its e-commerce business in the future.
Although sales through the Company’s e-commerce channels have constituted a minority of its net sales historically, such sales are growing, and the Company expects to continue to grow its e-commerce business in the future.
Increased advertising costs could materially and adversely affect the Company's profitability and results of operations. Failure to meet environmental, social and governance expectations or standards could adversely affect the Company’s business, reputation, results of operations and financial condition.
Increased advertising costs could materially and adversely affect the Company's profitability and results of operations. Failure to meet environmental, social and governance regulations, expectations or standards could adversely affect the Company’s business, reputation, results of operations and financial condition.
Fluctuations in foreign currency exchange rates could adversely affect the Company’s reported revenues, earnings, financial position and the comparability of results of operations from period to period. U.S.
Fluctuations in foreign currency exchange rates could adversely affect the Company’s reported revenues, earnings, financial position and the comparability of results of operations from period to period. Additional U.S.
The Company’s inability to obtain or maintain rights in its trademarks, or the inability of the Company’s licensors to obtain or maintain rights in their trademarks, could have an adverse effect on brand image and future results of operations.
The Company’s inability to obtain or maintain rights in its trademarks, or the inability of 19 the Company’s licensors to obtain or maintain rights in their trademarks, could have an adverse effect on brand image and future results of operations.
The Company’s outlet stores are strategically located in top outlet centers in the United States and Canada, most of which are located near vacation destinations. Due to significant industry consolidation in recent years, the remaining outlet center operators use their significant market power to increase rents in prime locations when existing leases are renewed or new leases are executed.
The Company’s outlet stores are strategically located in top outlet centers in the United States and Canada, many of which are located near vacation destinations. Due to significant industry consolidation in recent years, the remaining outlet center operators use their significant market power to increase rents in prime locations when existing leases are renewed or new leases are executed.
The Company’s results are dependent on a number of factors impacting consumer confidence and spending in the U.S. and other key markets, including, but not limited to, general economic and business conditions; wages and employment levels; volatility in the stock market; home values and housing costs; inflation; consumer debt levels; availability and cost of consumer credit; economic uncertainty; solvency concerns of major financial institutions; fluctuations in foreign currency exchange rates; commodity prices; fuel and energy costs and/or shortages; tax issues; and general political conditions, both domestic and abroad.
The Company’s results are dependent on a number of factors impacting consumer confidence and spending in key markets, including, but not limited to, general economic and business conditions; wages and employment levels; volatility in the stock market; home values and housing costs; inflation; consumer debt levels; availability and cost of consumer credit; economic uncertainty; solvency concerns of major financial institutions; fluctuations in foreign currency exchange rates; commodity prices; fuel and energy costs and/or shortages; tax issues; and general political conditions, both domestic and abroad.
However, there can be no assurance that the Company’s products will compete effectively in the future and, unless the Company remains competitive, its future results of operations and financial condition could be adversely affected. The Company also faces increasing competition from companies introducing and selling smart wearable devices including smart watches.
However, there can be no assurance that the Company’s products will compete effectively in the future and, unless the Company remains competitive, its future results of operations and financial condition could be adversely affected. The Company also faces significant competition from companies introducing and selling smart wearable devices including smart watches.
Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on the environmental, social and governance performance of companies, including climate change, greenhouse gas emissions, human and civil rights, diversity, equity and inclusion initiatives, and supply chain initiatives.
Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on the environmental, social and governance (ESG) performance of companies, including climate change, greenhouse gas emissions, human and civil rights, diversity, equity and inclusion initiatives, and supply chain conditions.
The current tightening of monetary policies of countries throughout the world in response to inflationary pressures have resulted in interest rate increases and could reduce availability of credit. An increase in product returns or lost product could negatively impact the Company’s operating results and profitability.
The recent tightening of monetary policies of countries throughout the world in response to inflationary pressures have resulted in interest rate increases and could reduce availability of credit. An increase in product returns or lost product could negatively impact the Company’s operating results and profitability.
Future reorganizations, changes of ownership and consolidations could further reduce the number of retail doors in which the Company’s products are sold and increase the concentration of sales among fewer national or large regional retailers, which could materially adversely affect the Company’s wholesale business.
Future reorganizations, changes of ownership and consolidations could further reduce the number of retail doors in which the Company’s products are sold and increase the concentration of sales among fewer large regional retailers, which could materially adversely affect the Company’s wholesale business.
Any material disruption or slowdown of the Company’s information systems could result in the loss of critical data, the inability to process and properly record transactions and the 20 material impairment of the Company’s ability to conduct business, leading to cancelled orders and lost sales.
Any material disruption or slowdown of the Company’s information systems could result in the loss of critical data, the inability to process and properly record transactions and the 18 material impairment of the Company’s ability to conduct business, leading to cancelled orders and lost sales.
The Company permits the return of damaged or defective products and accepts limited amounts of non-defective product returns in certain instances. Accordingly, the Company provides allowances for the estimated amounts of these returns at the time of revenue recognition based on historical experience.
The Company permits the return of defective products and accepts limited amounts of non-defective product returns in certain instances. Accordingly, the Company provides allowances for the estimated amounts of these returns at the time of revenue recognition based on historical experience.
Starting in July 2018, the Trump Administration announced a series of lists covering thousands of categories of Chinese origin products subject to potential U.S. special tariffs in addition to the regular tariffs that have historically applied to such products.
Starting in July 2018, the U.S. government announced a series of lists covering thousands of categories of Chinese origin products subject to potential U.S. special tariffs in addition to the regular tariffs that have historically applied to such products.
To the extent the Company elects to launch or maintain smart watch offerings, important differences in the way smart watches are designed, sourced, marketed, distributed, and serviced as compared to traditional watches may make it more difficult to compete successfully in the smart watch market, particularly for competitors such as the Company that must rely on the expertise of third parties who are active in this market.
Although the Company is not currently manufacturing new smart watch models, to the extent the Company elects to launch or maintain smart watch offerings, important differences in the way smart watches are designed, sourced, marketed, distributed, and serviced as compared to traditional watches may make it more difficult to compete successfully in the smart watch market, particularly for competitors such as the Company that must rely on the expertise of third parties who are active in this market.
The Company is increasingly using social media and proprietary mobile applications to interact with the Company’s customers and as a means to enhance their shopping experience.
The Company is increasingly using social media and proprietary mobile applications to interact with the Company’s customers and to enhance their shopping experience.
As a responsible corporate citizen, the Company actively manages environmental, social and governance issues and makes statements about its environmental, social and governance policies and initiatives through its annual Corporate Responsibility Report and various other communications. The Company cannot guarantee that it will achieve its announced environmental, social and governance goals.
As a responsible corporate citizen, the Company actively manages ESG issues and makes statements about its ESG policies and initiatives through its annual Corporate Responsibility Report and various other communications; however, the Company cannot guarantee that it will achieve its announced goals.
The success of the Company’s retail outlet locations is, to a certain extent, dependent upon the amount of customer foot traffic generated by the outlet centers in which those stores are located.
Sales in the Company’s retail outlet locations are dependent upon customer foot traffic and average order size. The success of the Company’s retail outlet locations is, to a certain extent, dependent upon the amount of customer foot traffic generated by the outlet centers in which those stores are located.
Climate change exacerbates these risks by increasing the frequency and severity of natural disasters.
Climate change exacerbates these risks by increasing the frequency and severity of extreme weather events and natural disasters.
The Company contractually obligates its independent manufacturers to adhere to the Company’s vendor code of conduct and similar codes of conduct adopted by the Company’s trademark licensors, and the Company monitors compliance with those codes by conducting 19 periodic factory audits.
The Company contractually obligates its independent finished goods manufacturers to adhere to the Company’s vendor code of conduct and similar codes of conduct adopted by the Company’s trademark licensors, and the Company monitors for compliance by conducting periodic factory audits.
Additional risks which the Company does not presently consider material, or of which it is not currently aware, may also have an adverse impact on the business.
Additional risks which the Company does not presently consider material, or of which it is not currently aware, may also have an adverse impact on the business. Please also see “Forward-Looking Statements” on page 1.
Factors that can affect customer foot traffic include: • changes in consumer discretionary spending; • the location of the outlet center; • the location of the Company’s store within the outlet center; • the other tenants in the outlet center; • the occupancy rate of the outlet center; • the success of the outlet center and tenant advertising to attract customers; • changes in competition in areas surrounding the outlet center; • increased competition from shopping over the internet and other alternatives such as mail-order; and • desirability of the Company’s brands and products. 16 Additionally, since most of the Company’s retail outlets are located near vacation destinations, factors that affect travel could decrease outlet center traffic.
Factors that can affect customer foot traffic include: • changes in consumer discretionary spending; • the location of the outlet center; • the location of the Company’s store within the outlet center; • the other tenants in the outlet center; • the occupancy rate of the outlet center; • the success of the outlet center and tenant advertising to attract customers; • changes in competition in areas surrounding the outlet center; • increased competition from shopping over the internet and other alternatives such as mail-order; and • desirability of the Company’s brands and products.
Please also see “Forward-Looking Statements” on page 1. 11 Risks Related to Macroeconomic Conditions and our International Operations Adverse economic conditions in key markets, and the resulting declines in consumer confidence and spending, could have a material adverse effect on the Company’s operating results.
Risks Related to Macroeconomic Conditions and our International Operations Adverse economic conditions in key markets, and the resulting declines in consumer confidence and spending, could have a material adverse effect on the Company’s operating results.
Any failure on the Company’s part to provide attractive, effective, reliable, user-friendly e-commerce platforms that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of online shoppers could place the Company at a competitive disadvantage, result in the loss of e-commerce and other sales, harm the Company’s reputation with customers, and have a material adverse impact on the growth of the Company’s e-commerce business globally and its results of operations. 17 Furthermore, the Company’s e-commerce operations subject the Company to risks related to the computer systems that operate the Company’s websites and related support systems, such as system failures, viruses, computer hackers and similar disruptions.
Any failure on the Company’s part to provide attractive, effective, reliable, user-friendly e-commerce platforms that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of online shoppers could place the Company at a competitive disadvantage, result in the loss of e-commerce and other sales, harm the Company’s reputation with customers, and have a material adverse impact on the growth of the Company’s e-commerce business globally and its results of operations.
Under CBP's current position, most of the bands used in the production of the Company’s traditional watches imported into the U.S. became subject to the U.S. special 15% tariff effective September 1, 2019, although the tariff rate was decreased to 7.5% effective February 14, 2020.
In addition, most of the bands used in the production of the Company’s traditional watches are made in China and became subject to the U.S. special 15% tariff effective September 1, 2019, although the tariff rate was decreased to 7.5% effective February 14, 2020.
Current or future cost reduction, streamlining, restructuring or business optimization initiatives could result in the Company incurring significant charges. In adapting to changing economic and industry conditions, the Company may be required to incur severance and relocation expenses, write-offs or write-downs of assets, impairment charges, facilities closure costs or other business optimization costs.
In adapting to changing economic and industry conditions, the Company may be required to incur severance and relocation expenses, write-offs or write-downs of assets, impairment charges, facilities closure costs or other business optimization costs.
Risks Related to our Business The Company’s wholesale business could be negatively affected by the consumer shift toward online shopping, as well as by further changes of ownership, contraction and consolidation in the retail industry.
In addition, natural disasters may disrupt purchasing behaviors, negatively impacting revenue generation. Risks Related to our Business 12 The Company’s wholesale business could be negatively affected by the consumer shift toward online shopping, as well as by further changes of ownership, contraction and consolidation in the retail industry.
Failure to meet any of these requirements could result in the loss of the license. Additionally, after the term of any license agreement has concluded, the licensor may decide not to renew with the Company. For the fiscal year ended January 31, 2023, the Company's licensed brands represented 53.1% of the Company’s net sales.
Additionally, after the term of any license agreement has concluded, the licensor may decide not to renew with the Company. For the fiscal year ended January 31, 2024, the Company's licensed brands represented 53.9% of the Company’s net sales.
If the Company fails to meet consumers’ expectations regarding the long-term functioning of any smart watches that it sells, the Company may suffer reputational damage that could adversely affect its business, results of operations and financial condition. 14 Maintaining favorable brand recognition is essential to the Company’s success, and failure to do so could materially and adversely affect the Company’s results of operations.
If the Company fails to meet consumers’ expectations regarding the long-term functioning of any smart watches that it sells, the Company may suffer reputational damage that could adversely affect its business, results of operations and financial condition.
Many of these companies have significantly greater financial, distribution, advertising and marketing resources than does the Company. The sale of these new smart products could materially adversely impact the traditional watch market and the Company’s results of operations and financial condition unless the Company elects to compete in this new product area and is able to do so effectively.
Many of these companies have significantly greater financial, distribution, advertising and marketing resources than does the Company. The sale of these new smart products could materially adversely impact the traditional watch market and the Company’s results of operations and financial condition.
If that were to occur, the Company’s ability to fill orders for its U.S., Canadian, Latin American and Caribbean customers would be significantly impacted, which could have a material adverse effect on the Company’s results of operations and financial condition.
If that were to occur, the Company’s ability to fill orders for its U.S., Canadian, Latin American and Caribbean customers would be significantly impacted, which could have a material adverse effect on the Company’s results of operations and financial condition. Current or future cost reduction, streamlining, restructuring or business optimization initiatives could result in the Company incurring significant charges.
If the Company’s sales mix shifts unfavorably toward brands with lower gross profit margins than the Company’s historical consolidated gross profit margin or if a greater proportion of liquidation sales are made, it could have an adverse effect on the results of operations.
If the Company’s sales mix shifts unfavorably toward brands with lower gross profit margins than the Company’s historical consolidated gross profit margin or if a greater proportion of liquidation sales are made, it could have an adverse effect on the results of operations. 14 The Company’s business is seasonal, so events and circumstances that adversely affect holiday consumer spending will have a disproportionately adverse effect on the Company’s results of operations.
Certain of the Company’s packaging products became subject to a U.S. special 10% tariff in September 2018, which was increased to 25% effective May 10, 2019. In addition, smart watches became subject to a U.S. special 15% tariff on September 1, 2019. In addition, U.S.
Most of the Company’s packaging products are made in China and became subject to a U.S. special 10% tariff in September 2018, which was increased to 25% effective May 10, 2019.
Favorable brand recognition is an important factor to the future success of the Company. The Company sells its products under a variety of owned and licensed brands.
Maintaining favorable brand recognition is essential to the Company’s success, and failure to do so could materially and adversely affect the Company’s results of operations. Favorable brand recognition is an important factor to the future success of the Company. The Company sells its products under a variety of owned and licensed brands.
Internationally, major selling seasons center on significant local holidays that occur in late winter or early spring. The amount of net sales and operating income generated during these seasons depends upon the general level of retail sales at such times, as well as economic conditions and other factors beyond the Company’s control.
The amount of net sales and operating income generated during these seasons depends upon the general level of retail sales at such times, as well as economic conditions and other factors beyond the Company’s control.
The Company reduces its exposure to the Swiss Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rate risks through a hedging program. Under the hedging program, the Company manages most of its foreign currency exposures on a consolidated basis, which allows it to net certain exposures and take advantage of natural offsets.
Under the hedging program, the Company manages most of its foreign currency exposures on a consolidated basis, which allows it to net certain exposures and take advantage of natural offsets.
The shift in our business toward e-commerce, and the expansion of our business in certain jurisdictions, and our greater reliance on cloud services may subject us to additional such laws and regulations. These U.S. federal and state and foreign laws and regulations are evolving, and the restrictions imposed thereby may increase and are not always clear.
The shift in our business toward e-commerce, and the expansion of our business in certain jurisdictions, and our greater reliance on cloud services may subject us to additional such laws and regulations.
The Company is in the process of updating its data map to comply with these requirements, a process that is complex and complicated by rapidly evolving and expanding cloud services and solutions.
The Company may need to update its data map or take other measures to comply with these requirements and interpretive guidance, a process that is complex, time consuming, and complicated by rapidly evolving and expanding cloud services and solutions.
The Company's inability to successfully recover from a natural disaster or other development impacting business continuity or sales opportunities could result in loss of human capital, revenue, reputational harm or legal liability, any of which could materially harm its financial condition and results or operations. The Company has a complex global supply chain and distribution network.
The Company's inability to successfully recover from extreme weather conditions, natural disasters or other catastrophic events or developments impacting business continuity or sales opportunities could result in loss of human capital, revenue, production capability, logistics efficiency, reputational harm or legal liability, any of which could materially harm its financial condition and results or operations.
Stay-at-home orders and social distancing practices resulting from the COVID-19 pandemic accelerated the trend toward online purchases. In addition, a large portion of the Company’s U.S. wholesale business is based on sales to major jewelry store chains and department stores. The retail industry has experienced changes in ownership, contraction and consolidations.
In addition, a large portion of the Company’s wholesale business is based on sales to major jewelry store chains and department stores. The retail industry has experienced changes in ownership, contraction and consolidations.
If the Company were to experience a local or regional natural disaster or other development impacting business continuity, such as an earthquake, tsunami, terrorist attack, disease outbreak or other natural or man-made disaster, its continued success will depend, in part, on the safety and availability of its personnel and office facilities and on the proper functioning of its computer, telecommunication and other systems.
If the Company or key participants in its value chain were to experience a local or regional natural disaster or other development impacting business continuity, such as an earthquake, hurricane, flood, wildfire, tsunami, other natural or man-made disaster, political crisis such as terrorist attacks, war, and other political instability, public health crisis including infectious disease outbreaks, pandemics, and endemics, or other catastrophic event, its continued success will depend, in part, on the safety and availability of personnel, facilities, and raw materials, and on the proper functioning of manufacturing, transportation, computer, telecommunication and other systems and services.
Such factors include the price and supply of fuel, travel concerns and restrictions (including those due to disease outbreaks such as COVID 19), international instability, terrorism and inclement weather.
Additionally, since many of the Company’s retail outlets are located near vacation destinations, factors that affect travel could decrease outlet center traffic. Such factors include the price and supply of fuel, travel concerns and restrictions (including those due to disease outbreaks such as COVID 19), international instability, terrorism and inclement weather.
The Company's failure or perceived failure to achieve such goals or to meet the environmental, social and governance expectations of other stakeholders could harm the Company's reputation, adversely impact its ability to attract and retain customers and talent, and expose it to legal and regulatory proceedings and increased scrutiny, thereby adversely affecting the Company’s business, results of operations and financial condition. 15 If the Company loses any of its license agreements, there may be significant loss of revenues and a negative effect on business.
The Company's failure or perceived failure to achieve such goals or to meet ESG expectations could harm the Company's reputation, adversely impact its ability to attract and retain customers and talent, impair its access to or cost of capital, and expose it to legal and regulatory proceedings and increased scrutiny, thereby adversely affecting the Company’s business, results of operations and financial condition.
Extreme weather events may cause shipping delays, result in property damage, and affect supply chains. As countries seek to address risks associated with climate change, laws and regulations may be adopted or strengthened.
As countries seek to address risks associated with climate change, laws and regulations may be adopted or strengthened.
Environmental factors, including climate change, and related regulatory action and consumer response, could substantially and negatively affect the Company's financial results. The intensifying effects of climate change present physical, liability, and transition risks with both macro and micro implications for companies and financial markets. Public sentiment is shifting, as more consumers expect the products they buy to be more sustainable.
Environmental factors, including climate change, and related regulatory action and consumer response, could substantially and negatively affect the Company's financial results. The intensifying effects of climate change present physical, liability, and transition risks with both macro and micro implications for companies and financial markets. Extreme weather events may cause shipping delays, result in property damage, and affect supply chains.
The Company’s revenue, results of operations and cash flows can be affected by several factors, some of which are not within its control. Those factors include, but are not limited to, those described as risk factors in this Item 1A. and under “Forward-Looking Statements” on page 1.
The Company’s revenue, results of operations and cash flows can be affected by several factors, some of which are not within its control.
There are currently a number of proposals pending before federal, state, and foreign legislative and regulatory bodies that may increase restrictions relating to the receipt, transfer and processing of personal data. In addition, foreign court decisions and regulatory actions could impact our ability to receive, transfer and process personal data relating to our employees and direct and indirect customers.
In addition, foreign court decisions and regulatory actions could impact our ability to receive, transfer and process personal data relating to our employees and direct and indirect customers.
This shift to a “cookieless future” is changing how the Company markets to and engages with consumers.
These shifts are changing how the Company markets to and engages with consumers.
Any or all of these factors could cause a decline in revenues or an increase in expenses, either of which would have an adverse effect on the results of operations. If the Company’s earnings failed to meet the expectations of the investing public in any given period, the Company’s stock price could fluctuate and decline.
If the Company’s earnings failed to meet the expectations of the investing public in any given period, the Company’s stock price could fluctuate and decline.
A significant portion of the Company’s inventory purchases are denominated in Swiss Francs and, to a lesser extent, the Japanese Yen. The Company also sells to third-party customers in a variety of foreign currencies, most notably the Euro and the British Pound.
The Company also sells to third-party customers in a variety of foreign currencies, most notably the Euro and the British Pound. The Company reduces its exposure to the Swiss Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rate risks through a hedging program.
If events or circumstances were to occur that negatively impact consumer spending during such holiday seasons, it could have a material adverse effect on the Company’s sales, profitability and results of operations. Sales in the Company’s retail outlet locations are dependent upon customer foot traffic and average order size.
The second half of each of the fiscal years ended January 31, 2024, 2023 and 2022 accounted for 54.6%, 54.0% and 57.9% of the Company’s net sales, respectively. If events or circumstances were to occur that negatively impact consumer spending during such holiday seasons, it could have a material adverse effect on the Company’s sales, profitability and results of operations.
For example, the Organization for Economic Cooperation and Development, which represents a coalition of western countries, is supporting changes to numerous long-standing tax principles through its base erosion and profit shifting project, which is focused on a number of issues, including the shifting of profits among affiliated entities located in different tax jurisdictions.
For example, the Organization for Economic Cooperation and Development, ("OECD"), which represents a coalition of western countries, including the U.S., is implementing changes to numerous long-standing tax principles, including enacting a global minimum tax and expanding the digital taxing rights of market countries.
In addition, events such as war, terrorism, natural disasters or outbreaks of disease may further suppress consumer spending on discretionary items. For example, Russia's invasion of Ukraine and the subsequent retaliatory measures taken by the U.S., NATO and other countries have negatively impacted our revenue derived from sales to this region.
In addition, events such as international hostilities (including the Russian invasion of Ukraine and war in the Middle East), terrorism, natural disasters or outbreaks of disease may further suppress consumer spending on discretionary items. If any of these events should occur or intensify, the Company’s future sales could decline and the Company’s results of operations could be materially adversely affected.
The Company’s business is seasonal, so events and circumstances that adversely affect holiday consumer spending will have a disproportionately adverse effect on the Company’s results of operations. The Company’s sales are seasonal by nature. The Company’s U.S. sales are traditionally greater during the Christmas and holiday season.
The Company’s sales are seasonal by nature. The Company’s U.S. sales are traditionally greater during the Christmas and holiday season. Internationally, major selling seasons center on significant local holidays that occur in late winter or early spring.
Removed
If any of these events should occur or intensify, the Company’s future sales could decline and the Company’s results of operations could be materially adversely affected. This could also result in the potential for impairment surrounding our long-lived assets. We depend on a variety of U.S. and multi-national financial institutions to provide us with banking services.
Added
Substantially all of the remaining products originate from Europe. The Company also generates approximately 56.8% of its revenue from international sources.
Removed
The default or failure of one or more of the financial institutions that we rely on may adversely affect our business and financial condition. The Company maintains the majority of its cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits.
Added
Any of these factors could result in a material adverse effect on the Company's results of operations and financial condition. 11 The Company’s business is subject to foreign currency exchange rate risk. A significant portion of the Company’s inventory purchases are denominated in Swiss Francs and, to a lesser extent, the Japanese Yen.
Removed
Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all.
Added
The Company has a complex global operations, supply chain and distribution network.
Removed
Any inability to access or delay in accessing these funds could adversely affect our business and financial condition.
Added
In response to privacy regulations and consumer preferences, technology companies have begun moving toward a “cookieless future,” web browsers are implementing certain cookie-blocking measures, and ecommerce sites are offering various privacy settings options. Scrutiny of consumer marketing practices is increasing, and regulatory expectations and oversight are expanding, especially around product sustainability claims.
Removed
Moreover, any default or failure of any U.S. or multi-national financial institutions may cause an impact on wholesale and retail customers' actual or perceived wealth and could reduce actual or perceived disposable income, which may cause a material adverse effect on our business and financial condition. A significant portion of the Company’s business is conducted outside of the United States.
Added
In addition to the rapidly developing legal obligations imposed by governmental and self-regulatory organizations, a variety of third-party bodies and institutional investors evaluate the performance of companies on ESG topics.
Removed
For example, Russia’s invasion of Ukraine in 2022 and the subsequent retaliatory measures taken by the U.S., NATO and other countries have negatively impacted our revenue to the extent the conflict and the sanctions impacted economic conditions and our ability to sell products to customers in the affected region.
Added
Understanding, developing, and acting on ESG matters, complying with legal obligations, and collecting, measuring, validating, and reporting ESG-related information and metrics can be costly, difficult, and time-consuming, especially as requirements and expectations continue to evolve.

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Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed3 unchanged
Biggest changeAs of January 31, 2023, the Company’s leased facilities individually comprising more than 20,000 square feet were as follows: Location Function Square Footage Lease Expiration Moonachie, New Jersey Watch distribution and repair 100,000 February 2025 Paramus, New Jersey Executive offices 90,100 June 2030 Bienne, Switzerland Corporate and sales functions and watch distribution, assembly and repair 56,700 December 2032 Hong Kong Watch distribution 44,800 April 2024 The foregoing facilities, as well as 12 additional leased facilities worldwide averaging approximately 5,000 square feet, are used exclusively in connection with the Watch and Accessory Brands segment of the Company’s business except that a portion of the Company’s executive office space in Paramus, New Jersey is used in connection with management of its retail business.
Biggest changeAs of January 31, 2024, the Company’s leased facilities individually comprising more than 20,000 square feet were as follows: Location Function Square Footage Lease Expiration Moonachie, New Jersey Watch distribution and repair 100,000 August 2035 Paramus, New Jersey Executive offices 90,100 June 2030 Bienne, Switzerland Corporate and sales functions and watch distribution, assembly and repair 56,700 December 2032 Hong Kong Watch distribution 44,800 April 2024 The foregoing facilities, as well as 12 additional leased facilities worldwide averaging approximately 5,000 square feet, are used exclusively in connection with the Watch and Accessory Brands segment of the Company’s business except that a portion of the Company’s executive office space in Paramus, New Jersey is used in connection with management of its retail business.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+1 added−4 removed5 unchanged
Biggest changePending greater clarity on the retroactive effect of this ruling, for the time being the Company continues to maintain an accrual for Chinese watch case imports prior to August 1, 2021. 25 In addition to the above matters, the Company is involved in other legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations, or cash flows.
Biggest changeIn addition to the above matters, the Company is involved in other legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations, or cash flows.
The report disputes the reasonableness of the Company’s historical allocation formulas and proposes an alternative methodology that would imply $5.1 million in underpaid duties over the five-year period covered by the statute of limitations, plus possible penalties and interest. The Company believes that U.S.
The report disputed the reasonableness of the Company’s historical allocation formulas and proposed an alternative methodology that would imply $5.1 million in underpaid duties for all imports that entered the United States during the audit period which extended from August 1, 2011 through July 15, 2016, plus possible penalties and interest. Although the Company believes that U.S.
Customs’ alternative duty methodology and estimate are not consistent with the Company’s facts and circumstances and is disputing U.S. Customs’ position. Since February 2017, the Company has been providing U.S. Customs with supplemental analyses and information in response to U.S. Customs’ information requests. Most recently, the Company received summonses from U.S.
Customs’ alternative duty methodology and estimate are not consistent with the Company’s facts and circumstances and has consistently disputed U.S. Customs’ position, the Company established reserves for a portion of the alleged underpayment indicated in the audit report. Between February 2017 and January 2021, the Company made numerous submissions to U.S.
Removed
Customs in December 2020 requesting additional information regarding component parts costs and the Company’s procedures for allocating the value of imported watches among the component parts. The Company responded to these summonses in January 2021. Although the Company disagrees with U.S.
Added
Customs containing supplemental analyses and information in response to U.S. Customs’ information requests. On May 1, 2023, the statute of limitations lapsed with respect to all entries encompassed by the audit period. As a result, during the second quarter of fiscal 2024, the Company released the reserves that it had established in respect of those entries.
Removed
Customs’ position and believes that the information it has provided supports the reasonableness of its historical allocation formulas, it cannot predict with any certainty the outcome of this matter. The Company intends to continue to work with U.S. Customs to reach a mutually satisfactory resolution.
Removed
Starting in July 2018, the Trump administration announced a series of lists covering thousands of categories of Chinese origin products subject to potential U.S. special tariffs, including watches. U.S. Customs subsequently issued various rulings regarding, among other things, the application of the special tariffs to China-sourced components of watches containing non-Chinese movements. A U.S.
Removed
Customs ruling effective August 1, 2021 holds that while the special tariff applies to all China-sourced watch bands, the special tariff does not apply to China-sourced watch cases imported as part of such a watch containing a non-Chinese movement.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−2 removed6 unchanged
Biggest changeIssuer Repurchase of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Amount that May Yet Be Purchased Under the Plans or Programs November 1, 2022 – November 30, 2022 30,000 $ 31.36 30,000 $ 23,309,638 December 1, 2022 – December 31, 2022 73,500 31.58 73,500 20,988,241 January 1, 2023 – January 31, 2023 — — — 20,988,241 Total 103,500 $ 31.52 103,500 $ 20,988,241 27 PERFORMANCE GRAPH The performance graph set forth below compares the cumulative total shareholder return of the Company’s shares of common stock for the last five fiscal years through the fiscal year ended January 31, 2023 with that of the S&P SmallCap 600 Index, the Broad Market (NYSE Stock Market – U.S.
Biggest changeIssuer Repurchase of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Amount that May Yet Be Purchased Under the Plans or Programs November 1, 2023 – November 30, 2023 — — — $ 18,639,162 December 1, 2023 – December 31, 2023 25,576 $ 27.39 7,000 $ 18,423,900 January 1, 2024 – January 31, 2024 19,659 $ 29.04 19,000 $ 17,872,716 Total 45,235 $ 28.10 26,000 $ 17,872,716 25 PERFORMANCE GRAPH The performance graph set forth below compares the cumulative total shareholder return of the Company’s shares of common stock for the last five fiscal years through the fiscal year ended January 31, 2024 with that of the S&P SmallCap 600 Index, the Broad Market (NYSE Stock Market – U.S.
Companies) and the Russell 2000 Index. Each index assumes an initial investment of $100 on January 31, 2018 and the reinvestment of dividends (where applicable). Comparison of Cumulative Five Year Total Return $250 $200 $150 $100 $50 $0 01/31/16 01/31/17 01/31/18 01/31/19 01/31/20 01/31/21 Movado Group, Inc.
Companies) and the Russell 2000 Index. Each index assumes an initial investment of $100 on January 31, 2019 and the reinvestment of dividends (where applicable). Comparison of Cumulative Five Year Total Return $250 $200 $150 $100 $50 $0 01/31/16 01/31/17 01/31/18 01/31/19 01/31/20 01/31/21 Movado Group, Inc.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities As of March 20, 2023, there were 43 holders of record of the Company’s class A common stock and 302 holders of record of the Company’s common stock (including nominee holders such as banks and brokerage firms who hold shares for beneficial owners), although we believe that the number of beneficial owners is much higher.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities As of March 20, 2024, there were 40 holders of record of the Company’s class A common stock and 295 holders of record of the Company’s common stock (including nominee holders such as banks and brokerage firms who hold shares for beneficial owners), although we believe that the number of beneficial owners is much higher.
For dividends declared and paid during fiscal 2023, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources." On March 25, 2021, the Board approved a share repurchase program under which the Company was authorized to purchase up to $25.0 million of its outstanding common stock from time to time through September 30, 2022, depending on market conditions, share price and other factors.
For dividends declared and paid during fiscal 2024, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources." On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to $50.0 million of its outstanding common stock from time to time through November 23, 2024, depending on market conditions, share price and other factors.
The Company’s common stock is traded on the New York Stock Exchange under the symbol “MOV” and on March 20, 2023, the closing price of the Company’s common stock was $32.59.
The Company’s common stock is traded on the New York Stock Exchange under the symbol “MOV” and on March 20, 2024, the closing price of the Company’s common stock was $26.85.
The class A common stock is not publicly traded and, consequently, there is currently no established public trading market for these shares. During each quarter of fiscal 2023, the Company declared cash dividends on its common stock and class A common stock.
There is currently no established public trading market for the class A common stock. During each quarter of fiscal 2024, the Company declared cash dividends on its common stock and class A common stock.
Under both share repurchase programs, the Company is permitted to purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. During the fiscal year ended January 31, 2023, the Company repurchased a total of 898,956 shares of its common stock at a total cost of $31.4 million, or an average of $34.94 per share.
Under the share repurchase program, the Company is permitted to purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. During the fiscal year ended January 31, 2024, the Company repurchased a total of 111,722 shares of its common stock at a total cost of $3.1 million, or an average of $27.89 per share.
An aggregate of 28,405 shares were repurchased during the fiscal year ended January 31, 2023 as a result of the surrender of shares of common stock in connection with the vesting of certain restricted stock awards and stock options.
An aggregate of 22,034 shares were repurchased during the fiscal year ended January 31, 2024 as a result of the surrender of shares of common stock in connection with the vesting of restricted stock awards or stock options. The following table summarizes information about the Company’s purchases of shares of its common stock in the fourth quarter of fiscal 2024.
S&P SmallCap 600 Index NYSE Composite Index Russell 2000 Index Company Name / Index 1/31/18 1/31/19 1/31/20 1/31/21 1/31/22 1/31/23 Movado Group, Inc. 100.00 106.47 59.30 71.49 131.60 130.78 S&P SmallCap 600 Index 100.00 98.75 105.24 129.63 143.44 142.10 NYSE (U.S. Companies) 100.00 94.38 107.18 116.13 137.22 135.37 Russell 2000 Index 100.00 96.48 105.36 137.15 135.50 130.92
S&P SmallCap 600 Index NYSE Composite Index Russell 2000 Index Company Name / Index 1/31/19 1/31/20 1/31/21 1/31/22 1/31/23 1/31/24 Movado Group, Inc. 100.00 55.70 67.14 123.61 122.84 104.56 S&P SmallCap 600 Index 100.00 106.57 131.27 145.25 143.89 146.49 NYSE (U.S. Companies) 100.00 113.57 123.05 145.40 143.43 155.04 Russell 2000 Index 100.00 109.21 142.16 140.45 135.70 138.96
Removed
On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to an additional $50.0 million of its outstanding common stock from time to time through November 23, 2024, depending on market conditions, share price and other factors.
Removed
The following table summarizes information about the Company’s purchases of shares of its common stock in the fourth quarter of fiscal 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

89 edited+12 added−30 removed51 unchanged
Biggest changeCash provided by operating activities in fiscal 2022 was impacted by an increase in accounts payable of $18.3 million primarily as a result of timing of payments, a decrease in income taxes receivable of $17.1 million due to a receipt of a U.S. federal income tax refund and an increase in accrued payroll and benefits of $7.3 million primarily due to an increase in performance-based compensation, partially offset by an increase in trade receivable of $18.6 million and inventories of $15.4 million.
Biggest changeCash provided by operating activities for fiscal 2024 included a $37.7 million decrease in investment in inventories primarily due to timing of receipts to align with sales levels, partially offset by a change in payments related to income taxes of $16.7 million primarily due to timing, a decrease in accrued payroll and benefits of $9.9 million primarily as a result of payments of fiscal year 2023 performance-based compensation and an increase of $9.1 million in trade receivables as a result of timing of receipts and change in sales mix.
Changes in useful lives are made on a prospective basis unless factors indicate the carrying amounts of the assets may not be recoverable and an impairment is necessary. The Company performs an impairment review of its long-lived assets once events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable.
Changes in useful lives are made on a prospective basis unless factors indicate the carrying amounts of the assets may not be recoverable and an impairment is necessary. 29 The Company performs an impairment review of its long-lived assets once events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable.
Cash used in operating activities for fiscal 2023 was impacted by a $28.9 million increase in investment in inventories primarily due to timing of receipts, a decrease of $13.7 million in accounts payable primarily due to timing of payments and a decrease in accrued payroll of $7.7 million primarily as a result of payments of fiscal year 2022 performance-based compensation, net of current year accrual.
Cash used in operating activities for fiscal 2023 was impacted by a $28.9 million increase in investment in inventories primarily due to timing of receipts, a decrease of $13.7 million in accounts payable primarily due to timing of payments and a decrease in accrued payroll of $7.7 million primarily as a result of payments of fiscal year 2022 performance-based compensation, net of fiscal year 2023 accrual.
Additionally, interest expense includes the amortization of deferred financing costs, and unused commitment fees associated with the Company’s revolving credit facility. 30 Income Taxes The Company follows the asset and liability method of accounting for income taxes as prescribed under the Accounting Standards Codification guidance for Income Taxes (“ASC Topic 740”).
Additionally, interest expense includes the amortization of deferred financing costs, and unused commitment fees associated with the Company’s revolving credit facility. Income Taxes The Company follows the asset and liability method of accounting for income taxes as prescribed under the Accounting Standards Codification guidance for Income Taxes (“ASC Topic 740”).
The excess of the carrying value over the fair value, if any, is recognized as a loss during that period. The impairment is calculated as the difference between asset carrying values and their estimated fair values. No impairment charge was recorded in fiscal 2023 or in fiscal 2022.
The excess of the carrying value over the fair value, if any, is recognized as a loss during that period. The impairment is calculated as the difference between asset carrying values and their estimated fair values. No impairment charge was recorded in fiscal 2024, fiscal 2023 or fiscal 2022.
The Company retains adequate levels of component parts to 31 facilitate both the manufacturing of its watches as well as the after-sales service of its watches for an extended period of time after the discontinuance of the manufacturing of such watches.
The Company retains adequate levels of component parts to facilitate both the manufacturing of its watches as well as the after-sales service of its watches for an extended period of time after the discontinuance of the manufacturing of such watches.
The Company’s ability to improve margins through price increases is therefore, to some extent, constrained by competitors’ actions. 29 Cost of sales of the Company’s products consists primarily of costs for raw materials, component costs, royalties, depreciation, amortization, assembly costs, shipping to customers, design costs and unit overhead costs associated with the Company’s supply chain operations predominately in Switzerland and Asia.
The Company’s ability to improve margins through price increases is therefore, to some extent, constrained by competitors’ actions. 27 Cost of sales of the Company’s products consists primarily of costs for raw materials, component costs, royalties, depreciation, amortization, assembly costs, shipping to customers, design costs and unit overhead costs associated with the Company’s supply chain operations predominately in Switzerland and Asia.
The Credit Agreement provides for a $100.0 million senior secured revolving credit facility (the “Facility”) and has a maturity date of October 28, 2026.
The Credit Agreement provides for a $100.0 million 34 senior secured revolving credit facility (the “Facility”) and has a maturity date of October 28, 2026.
Availability under the Facility was reduced by the aggregate amount of letters of credit outstanding, issued in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada, totaling approximately $0.3 million at both January 31, 2023 and January 31, 2022.
Availability under the Facility was reduced by the aggregate amount of letters of credit outstanding, issued in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada, totaling approximately $0.3 million at both January 31, 2024, and January 31, 2023.
International Watch and Accessory Brands Operating Income In the International locations of the Watch and Accessory Brands segment, for the twelve months ended January 31, 2023, the Company recorded operating income of $98.1 million, which includes $81.0 million of certain intercompany profits related to the Company’s International supply chain operations.
For the twelve months ended January 31, 2023 the Company recorded operating income of $98.1 million in the International locations of the Watch and Accessory Brands segment which included $81.0 million of certain intercompany profits related to the Company’s supply chain operations.
On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to an additional $50.0 million of its outstanding common stock through November 23, 2024, depending on market conditions, share price and other factors.
On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to $50.0 million of its outstanding common stock through November 23, 2024, depending on market conditions, share price and other factors.
Among other things, the IR Act introduces a 1% excise tax on the fair market stock repurchases by covered corporations, a 15% minimum tax based on adjusted financial statement income of certain large corporations, and several tax incentives to promote clean energy.
Among other things, the IR Act implemented a 1% excise tax on the fair market stock repurchases by covered corporations, a 15% minimum tax based on adjusted financial statement income of certain large corporations, and several tax incentives to promote clean energy.
The Company’s hedging program mitigated the impact of the exchange rate fluctuations on product costs and gross margins for fiscal years 2023 and 2022. Selling, General and Administrative (“SG&A”) Expenses The Company’s SG&A expenses consist primarily of marketing, selling, distribution, general and administrative expenses.
The Company’s hedging program mitigated the impact of the exchange rate fluctuations on product costs and gross margins for fiscal years 2024 and 2023. Selling, General and Administrative (“SG&A”) Expenses The Company’s SG&A expenses consist primarily of marketing, selling, distribution, general and administrative expenses.
The fair values of these intangible assets are estimated based on independent third-party appraisals. Finite-lived intangible assets are amortized over their respective estimated useful lives, which range from three to ten years, and are evaluated for impairment periodically and whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable.
The fair values of these intangible assets are estimated at the time of acquisition based on independent third-party appraisals. Finite-lived intangible assets are amortized over their respective estimated useful lives, which range from three to ten years, and are evaluated for impairment whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable.
Watch and Accessory Brands Operating Income For fiscal 2023, the Company recorded operating income of $95.1 million in the Watch and Accessory Brands segment which includes $37.0 million of unallocated corporate expenses as well as $81.0 million of certain intercompany profits related to the Company’s supply chain operations.
For fiscal 2023, the Company recorded operating income of $95.0 million in the Watch and Accessory Brands segment which included $37.0 million of unallocated corporate expenses as well as $81.0 million of certain intercompany profits related to the Company’s supply chain operations.
RESULTS OF OPERATIONS The following is a discussion of the results of operations for fiscal 2023 compared to fiscal 2022 along with a discussion of the changes in financial condition during fiscal 2023.
RESULTS OF OPERATIONS The following is a discussion of the results of operations for fiscal 2024 compared to fiscal 2023 along with a discussion of the changes in financial condition during fiscal 2024.
As of January 31, 2023, and 2022, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.1 million and $7.0 million, respectively. As of January 31, 2023, and 2022, there were no borrowings against these lines.
As of January 31, 2024, and 2023, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.5 million and $7.1 million, respectively. As of January 31, 2024, and 2023, there were no borrowings against these lines.
For a discussion of our results of operations in fiscal year 2022 compared to fiscal year 2021, please see “Results of Operations” in Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K for the fiscal year ended January 31, 2022, filed with the SEC on March 24, 2022.
For a discussion of our results of operations in fiscal year 2023 compared to fiscal year 2022, please see “Results of Operations” in Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on March 23, 2023.
At January 31, 2023, the letters of credit have expiration dates through May 31, 2023. As of January 31, 2023, and January 31, 2022, availability under the Facility was $99.7 million for both periods. For additional information regarding the Facility, see Note 9 – Debt and Lines of Credit to the Consolidated Financial Statements.
At January 31, 2024, the letters of credit have expiration dates through May 31, 2024. As of both January 31, 2024, and January 31, 2023, availability under the Facility was $99.7 million. For additional information regarding the Facility, see Note 7 – Debt and Lines of Credit to the Consolidated Financial Statements.
The effective tax rate for fiscal 2023 was 20.4% and differed from the U.S. statutory tax rate of 21.0% primarily due to foreign profits being taxed in lower taxing jurisdictions and the release of certain foreign valuation allowances, partially offset by U.S. state and local taxes, net of the federal benefit.
The effective tax rate for fiscal 2023 was 20.4% and differed from the U.S. statutory tax rate of 21.0% primarily due to foreign profits being taxed in lower taxing jurisdictions and the release of certain foreign valuation allowances, partially offset by U.S. state and local taxes, net of the federal benefit. Net Income Attributable to Movado Group, Inc.
Cost is determined using the average cost method. The Company performs reviews of its on-hand inventory to determine amounts, if any, of inventory that is deemed discontinued, excess, or unsaleable. Inventory classified as discontinued, together with the related component parts that can be assembled into saleable finished goods, is sold primarily through the Company’s retail outlet locations.
The Company performs reviews of its on-hand inventory to determine amounts, if any, of inventory that is deemed discontinued, excess, or unsaleable. Inventory classified as discontinued, together with the related component parts that can be assembled into saleable finished goods, is sold primarily through the Company’s retail outlet locations.
Accounting Changes and Recent Accounting Pronouncements See Note 3 to the accompanying audited consolidated financial statements for a description of recent accounting pronouncements which may impact the consolidated financial statements in future reporting periods.
Accounting Changes and Recent Accounting Pronouncements See Note 2 to the accompanying audited Consolidated Financial Statements for a description of recent accounting pronouncements which may impact the Company's Consolidated Financial Statements in future reporting periods.
The primary factors that influence annual sales are general economic conditions in the Company’s U.S. and international markets, new product introductions, the level and effectiveness of advertising and marketing expenditures and product pricing decisions. 55.6% of the Company’s total sales are from international markets (see Note 20 to the Consolidated Financial Statements), and therefore reported sales made in those markets are affected by foreign exchange rates.
The primary factors that influence annual sales are general economic conditions in the Company’s U.S. and international markets, new product introductions, the level and effectiveness of advertising and marketing expenditures and product pricing decisions. 56.8% of the Company’s total sales are from international markets (see Note 18 to the Consolidated Financial Statements), and therefore reported sales made in those markets are affected by foreign exchange rates.
The Company’s net sales historically have been higher during the second half of the fiscal year. The second half of each fiscal year accounted for 54.0% and 57.9% of the Company’s net sales for the fiscal years ended January 31, 2023 and 2022, respectively.
The Company’s net sales historically have been higher during the second half of the fiscal year. The second half of each fiscal year accounted for 54.6% and 54.0% of the Company’s net sales for the fiscal years ended January 31, 2024 and 2023, respectively.
As of January 31, 2023 and 2022, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.2 million for both periods, in various foreign currencies, of which $0.6 million for both periods was a restricted deposit as it relates to lease agreements.
As of January 31, 2024, and 2023, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.4 million and $1.2 million, respectively, in various foreign currencies, of which $0.8 million and $0.6 million, respectively, was a restricted deposit as it relates to lease agreements.
The Company paid cash dividends of $0.35 per share, or $7.9 million, during the three months ended April 30, 2022; $0.35 per share, or $7.9 million, during the three months ended July 31, 2022; $0.35 per share, or $7.8 million, during the three months ended October 31, 2022; and $0.35 per share, or $7.8 million, during the three months ended January 31, 2023.
The Company paid cash dividends of $0.35 per share, or $7.7 million, during the three months ended July 31, 2023; $0.35 per share, or $7.8 million, during the three months ended October 31, 2023; and $0.35 per share, or $7.7 million, during the three months ended January 31, 2024.
The Company funded approximately $2.0 million of these commitments in fiscal 2022 and an additional $3.3 million in fiscal 2023 and may be called upon to satisfy capital calls in respect of the remaining $16.2 million in such commitments at any time during a period generally ending ten years after the first capital call in respect of a given commitment.
The Company funded approximately $5.3 million of these commitments through fiscal 2023 and an additional $3.1 million during fiscal 2024 and may be called upon to satisfy capital calls in respect of the remaining $13.1 million in such commitments at any time during a period generally ending ten years after the first capital call in respect of a given commitment.
Net Income Attributable to Movado Group, Inc. The Company recorded net income attributable to Movado Group, Inc. of $94.5 million and $91.6 million for fiscal 2023 and 2022, respectively. LIQUIDITY AND CAPITAL RESOURCES At January 31, 2023 and January 31, 2022, the Company had $251.6 million and $277.1 million, respectively, of cash and cash equivalents.
The Company recorded net income attributable to Movado Group, Inc. of $46.7 million and $94.5 million for fiscal 2024 and 2023, respectively. LIQUIDITY AND CAPITAL RESOURCES At January 31, 2024 and January 31, 2023, the Company had $262.1 million and $251.6 million, respectively, of cash and cash equivalents.
The net sales decrease recorded in the owned brands category was $0.4 million, or 0.7%, due to net 34 sales decreases in Europe and Asia, partially offset by increases in the Middle East and the Americas (excluding the United States).
The net sales decrease recorded in the owned brands category was $4.5 million, or 7.7%, primarily due to net sales decreases in Europe, the Americas (excluding the United States) and the Middle East, partially offset by a net sales increase in Asia.
As of January 31, 2023 and 2022, the Company operated 55 and 51 retail outlet locations, respectively. Gross Profit Gross profit for fiscal 2023 was $433.9 million or 57.7% of net sales as compared to $419.1 million or 57.2% of net sales in the prior year.
As of January 31, 2024 and 2023, the Company operated 55 retail outlet locations. Gross Profit Gross profit for fiscal 2024 was $370.4 million or 55.1% of net sales as compared to $433.9 million or 57.7% of net sales in the prior year.
The Company’s International operations in Europe, the Middle East, the Americas (excluding the United States), and Asia account for 32.8%, 10.3%, 7.8% and 4.7%, respectively, of the Company’s total net sales for fiscal 2023. A vast majority of the Company’s tangible International assets are owned by the Company’s Swiss and Hong Kong subsidiaries. The Company’s business is seasonal.
The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia account for 30.5%, 9.3%, 9.0% and 8.0%, respectively, of the Company’s total net sales for fiscal 2024. A vast majority of the Company’s tangible International assets are owned by the Company’s Swiss and Hong Kong subsidiaries. The Company’s business is seasonal.
During fiscal 2023, the Company repurchased a total of 898,956 shares of its common stock under the March 25, 2021 share repurchase program and November 23, 2021 share repurchase program at a total cost of $31.4 million, or an average of $34.94 per share.
During fiscal 2023, the Company repurchased a total of 898,956 shares of its common stock under the November 23, 2021 share repurchase program and a prior share repurchase program that expired on September 30, 2022 at a total cost of $31.4 million, or an average of $34.94 per share.
The Company defines working capital as the difference between current assets and current liabilities. The Company had $54.3 million of cash provided by operating activities for fiscal 2023 as compared to $130.8 million for fiscal 2022. Cash provided by operating activities for fiscal 2023 included net income of $97.0 million, positively adjusted by $20.3 million related to non-cash items.
The Company defines working capital as the difference between current assets and current liabilities. The Company had $76.8 million of cash provided by operating activities for fiscal 2024 as compared to $54.3 million for fiscal 2023. Cash provided by operating activities for fiscal 2024 included net income of $47.5 million, positively adjusted by $24.6 million related to non-cash items.
Of this total, $114.0 million and $197.4 million, respectively, consisted of cash and cash equivalents at the Company’s foreign subsidiaries. 36 The Company believes that based on the Company’s current expectations, cash flows from operations and its credit lines and cash on-hand, the Company has adequate funds to support its operating, capital and debt service requirements and expects to maintain compliance with its debt covenants for the next twelve months subsequent to the issuance of the accompanying Consolidated Financial Statements.
The Company believes that based on the Company’s current expectations, cash flows from operations and its credit lines and cash on-hand, the Company has adequate funds to support its operating, capital and debt service requirements and expects to maintain compliance with its debt covenants for the next twelve months subsequent to the issuance of the accompanying Consolidated Financial Statements.
Borrowings under the Credit Agreement bear interest at rates generally based on either the Term Secured Overnight Financing Rate ("SOFR") as administered by the Federal Reserve Bank of New York or a specified base rate, as selected periodically by the Company.
The Company had weighted average borrowings under the Facility of zero during both fiscal 2024 and fiscal 2023, respectively. Borrowings under the Credit Agreement bear interest at rates generally based on either the Term Secured Overnight Financing Rate ("SOFR") as administered by the Federal Reserve Bank of New York or a specified base rate, as selected periodically by the Company.
For the twelve months ended January 31, 2022, the Company recorded an operating income of $76.0 million in the International locations of the Watch and Accessory Brands segment which included $80.5 million of certain intercompany profits related to the Company’s supply chain operations.
International Watch and Accessory Brands Operating Income In the International locations of the Watch and Accessory Brands segment, for the twelve months ended January 31, 2024, the Company recorded operating income of $67.6 million which includes $71.5 million of certain intercompany profits related to the Company’s International supply chain operations.
The effective tax rate for fiscal 2022 was 21.1% and differed from the U.S. statutory tax rate of 21.0% primarily due to U.S. state and local taxes, net of the federal benefit, partially offset by the CARES Act NOL Carryback Provision and related tax effects and foreign profits being taxed in lower taxing jurisdictions.
The effective tax rate for fiscal 2024 was 21.0% and was essentially equivalent to the U.S. statutory tax rate of 21.0% primarily due to foreign profits being taxed in lower taxing jurisdictions, partially offset by U.S. state and local taxes, net of the federal benefit.
Cash paid for interest, including unused commitments fees, was $0.3 million and $0.4 million during fiscal 2023 and 2022, respectively.
Cash paid for interest, including unused commitments fees and amortization of debt fees, was $0.3 million during both fiscal 2024 and 2023, respectively.
Cash used in investing was $10.6 million for fiscal 2023 as compared to $7.9 million for fiscal 2022. The cash used in fiscal 2023 was primarily related to capital expenditures of $7.1 million primarily due to the Company’s opening of new stores and new computer software and $3.3 million of long-term investments.
Cash used in investing was $11.5 million for fiscal 2024 as compared to $10.6 million for fiscal 2023. The cash used in fiscal 2024 was primarily related to capital expenditures of $8.2 million primarily due to new computer software and leasehold improvements and $3.1 million of long-term investments.
For fiscal 2022, the Company recorded operating income of $85.6 million in the Watch and Accessory Brands segment which included $38.7 million of unallocated corporate expenses as well as $80.5 million of certain intercompany profits related to the Company’s supply chain operations.
Watch and Accessory Brands Operating Income 32 For fiscal 2024, the Company recorded operating income of $37.5 million in the Watch and Accessory Brands segment which includes $30.8 million of unallocated corporate expenses as well as $71.5 million of certain intercompany profits related to the Company’s supply chain operations.
At January 31, 2023 the Company had working capital of $424.8 million as compared to $402.4 million at January 31, 2022. The increase in working capital was primarily the result of an increase in inventories and a decrease in accounts payable, partially offset by a decrease in cash.
At January 31, 2024 the Company had working capital of $430.8 million as compared to $424.8 million at January 31, 2023. The increase in working capital was primarily the result of an increase in cash and trade receivables and a decrease in income taxes payable, accrued liabilities and accrued payroll and benefits, partially offset by a decrease in inventories.
The following are net sales by business segment and geographic location (in thousands): Fiscal Year Ended January 31, 2023 2022 Watch and Accessory Brands: United States $ 227,268 $ 244,204 International 413,071 382,019 Total Watch and Accessory Brands 640,339 626,223 Company Stores United States 106,645 101,888 International 4,914 4,282 Total Company Stores 111,559 106,170 Net sales $ 751,898 $ 732,393 33 The following are net sales by category (in thousands): Fiscal Year Ended January 31, 2023 2022 Watch and Accessory Brands: Owned brands category $ 230,277 $ 249,940 Licensed brands category 399,556 368,354 After-sales service and all other 10,506 7,929 Total Watch and Accessory Brands 640,339 626,223 Company Stores 111,559 106,170 Consolidated total $ 751,898 $ 732,393 The following table presents the Company’s results of operations expressed as a percentage of net sales for the fiscal years indicated: Fiscal Year Ended January 31, 2023 2022 Net sales 100.0 % 100.0 % Gross margin 57.7 % 57.2 % Selling, general and administrative expenses 41.7 % 41.2 % Operating income 16.0 % 16.0 % Other income 0.3 % 0.1 % Interest expense 0.1 % 0.1 % Provision for income taxes 3.3 % 3.4 % Noncontrolling interests 0.3 % 0.1 % Net income attributable to Movado Group, Inc. 12.6 % 12.5 % Fiscal 2023 Compared to Fiscal 2022 Net Sales Net sales in fiscal 2023 were $751.9 million, representing a $19.5 million or 2.7% increase above the prior year.
The following are net sales by business segment and geographic location (in thousands): Fiscal Year Ended January 31, 2024 2023 Watch and Accessory Brands: United States $ 191,266 $ 227,268 International 377,400 413,071 Total Watch and Accessory Brands 568,666 640,339 Company Stores United States 98,990 106,645 International 4,945 4,914 Total Company Stores 103,935 111,559 Net sales $ 672,601 $ 751,898 The following are net sales by category (in thousands): Fiscal Year Ended January 31, 2024 2023 Watch and Accessory Brands: Owned brands category $ 198,612 $ 230,277 Licensed brands category 362,311 399,556 After-sales service and all other 7,743 10,506 Total Watch and Accessory Brands 568,666 640,339 Company Stores 103,935 111,559 Consolidated total $ 672,601 $ 751,898 The following table presents the Company’s results of operations expressed as a percentage of net sales for the fiscal years indicated: Fiscal Year Ended January 31, 2024 2023 Net sales 100.0 % 100.0 % Gross margin 55.1 % 57.7 % Selling, general and administrative expenses 46.9 % 41.7 % Operating income 8.1 % 16.0 % Other income, net 0.9 % 0.3 % Interest expense 0.1 % 0.1 % Provision for income taxes 1.9 % 3.3 % Noncontrolling interests 0.1 % 0.3 % Net income attributable to Movado Group, Inc. 6.9 % 12.6 % 31 Fiscal 2024 Compared to Fiscal 2023 Net Sales Net sales for fiscal 2024 were $672.6 million, representing a $79.3 million or 10.5% decrease from the prior year.
For the twelve months ended January 31, 2022, the Company recorded operating income of $9.6 million in the United States locations of the Watch and Accessory Brands segment which included unallocated corporate expenses of $38.7 million.
For the twelve months ended January 31, 2023 the Company recorded an operating loss of $3.0 million in the United States locations of the Watch and Accessory Brands segment which included unallocated corporate expenses of $37.0 million.
International Watch and Accessory Brands Net Sales Net sales in fiscal 2023 in the International locations of the Watch and Accessory Brands segment were $413.1 million, above the prior year by $31.1 million, or 8.1%, which included fluctuations in foreign currency exchange rates that negatively impacted net sales by $31.8 million when compared to the prior year.
International Watch and Accessory Brands Net Sales Net sales for fiscal 2024 in the International locations of the Watch and Accessory Brands segment were $377.4 million, below the prior year by $35.7 million, or 8.6%, which included fluctuations in foreign currency exchange rates that positively impacted net sales by $8.6 million when compared to the prior year.
The increase in gross profit of $14.8 million was primarily due to higher net sales combined with a higher gross margin percentage.
The decrease in gross profit of $63.5 million was primarily due to lower net sales combined with a lower gross margin percentage.
Through productivity improvement efforts, the Company has controlled the level of overhead costs and maintained flexibility in its cost structure by outsourcing a significant portion of its component and assembly requirements.
The Company’s supply chain operations consist of logistics management of assembly operations and product sourcing predominately in Switzerland and Asia and minor assembly in Switzerland. Through productivity improvement efforts, the Company has controlled the level of overhead costs and maintained flexibility in its cost structure by outsourcing a significant portion of its component and assembly requirements.
The increase in gross profit of $14.9 million was primarily the result of higher net sales, combined with a higher gross margin percentage primarily due to a favorable change of sales mix, partially offset by a negative impact of fluctuations in foreign exchange rates and increased shipping costs.
The decrease in gross profit was primarily the result of lower net sales combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of higher fixed costs over lower sales and a negative impact of fluctuations in foreign exchange rates, partially offset by lower shipping costs.
Factors considered in the transfer of control include the right to payment, transfer of legal title, physical possession and customer acceptance of the goods and whether the significant risks and rewards for the goods belong with the customer.
Control passes to outlet store customers at the time of sale and to substantially all e-commerce customers upon shipment. Factors considered in the transfer of control include the right to payment, transfer of legal title, physical possession and customer acceptance of the goods and whether the significant risks and rewards for the goods belong with the customer.
The increase in net sales in the licensed brand category was $28.7 million, or 9.0%, due to net sales increases across the Middle East, Asia, and the Americas (excluding the United States), partially offset by a decrease in Europe.
The net sales decrease in the licensed brands category was $28.5 million, or 8.2%, primarily due to net sales decreases in Europe and the Americas (excluding the United States), partially offset by net sales increases in the Middle East and Asia.
The increase in operating income was the result of an increase in gross profit of $14.9 million, partially offset by an increase in SG&A expenses of $5.4 million when compared to the prior year.
The increase in operating loss was the result of lower gross profit of $29.9 million, partially offset by a decrease in SG&A expenses of $2.9 million when compared to the prior year period.
Increased SG&A expenses were partially offset by a decrease in performance-based compensation of $7.8 million. For the year ended January 31, 2023, fluctuations in foreign currency rates related to the foreign subsidiaries favorably impacted SG&A expenses by $9.1 million when compared to the prior year.
These increases in SG&A expenses were partially offset by a decrease in performance-based compensation of $10.9 million and a decrease in professional service fees of $0.4 million. For the year ended January 31, 2024, fluctuations in foreign currency rates related to the foreign subsidiaries unfavorably impacted SG&A expenses by $3.7 million when compared to the prior year.
The increase in net sales was primarily due to the addition of the Calvin Klein brand, increased volumes resulting from higher demand with growth from the Company's wholesale customers in the International locations and, to a lesser extent, the impact of pricing increases, partially offset by the negative impact of fluctuations in foreign exchange rates, a decrease in online retail and a decrease in the United States locations.
The decrease in net sales was primarily due to decreased volumes resulting from lower demand in the Company's wholesale customers in both the United States and International locations and a decrease in online retail, partially offset by the positive impact of fluctuations in foreign exchange rates.
Selling, General and Administrative (“SG&A”) SG&A expenses in fiscal 2023 were $313.5 million, representing an increase from the prior year of $12.0 million, or 4.0%.
Selling, General and Administrative (“SG&A”) SG&A expenses for fiscal 2024 were $315.7 million, representing an increase from the prior year of $2.1 million, or 0.7%.
In addition, on March 23, 2023, the Company declared a special cash dividend of $1.00 per share as well as a regular cash dividend of $0.35 per share, in each case payable on April 19, 2023, to shareholders of record on April 5, 2023.
On March 23, 2023, the Company declared a special cash dividend of $1.00 per share, as well as a quarterly cash dividend of $0.35 per share, both paid on April 19, 2023, to shareholders of record on April 5, 2023. The total dividends of $29.9 million were paid on April 19, 2023.
Although the Company currently expects to continue to declare cash dividends in the future, the decision of whether to declare any future cash dividend, including the amount of any such dividend and the establishment of record and payment dates, will be determined, in each quarter, by the Board of Directors, in its sole discretion.
The Company paid cash dividends of $0.35 per share, or $7.9 million, during the three months ended April 30, 2022; $0.35 per share, or $7.9 million, during the three months ended July 31, 2022; $0.35 per share, or $7.8 million, during the three months ended October 31, 2022; and $0.35 per share, or $7.8 million, during the three months ended January 31, 2023. 35 Although the Company currently expects to continue to declare cash dividends in the future, the decision of whether to declare any future cash dividend, including the amount of any such dividend and the establishment of record and payment dates, will be determined, in each quarter, by the Board of Directors, in its sole discretion.
The net sales recorded in the owned brands category decreased $19.3 million, or 10.1%, and net sales recorded in the licensed brand category increased $2.5 million, or 5.2%.
The net sales recorded in the owned brands category decreased $27.2 million, or 15.8%, and net sales recorded in the licensed brand category decreased $8.7 million, or 17.1%.
The Company expects that capital expenditures in fiscal 2024 will be approximately $10.0 million as compared to $7.1 million in fiscal 2023. The capital spending will be primarily for projects in the ordinary course of business including facilities improvements, shop-in-shops, website development, computer hardware and software and tooling costs.
The capital spending will be primarily for projects in the ordinary course of business including facilities improvements, shop-in-shops, website development, computer hardware and software and tooling costs. The Company has the ability to manage its capital expenditures on discretionary projects. Cash used in financing activities was $57.6 million for fiscal 2024 as compared to $65.3 million for fiscal 2023.
The decrease in operating income of $6.6 million was primarily related to a $6.5 million increase in SG&A expenses and a $0.1 million decrease in gross profit mainly due to a lower gross margin percentage.
The decrease in operating income of $8.1 million was primarily related to a decrease in gross profit of $7.5 million, mainly due to lower net sales combined with a lower gross margin percentage, and higher SG&A expenses of $0.6 million, reflecting a $1.2 million increase in payroll related expenses, partially offset by a decrease of $0.4 million in professional service fees.
United States Watch and Accessory Brands Net Sales Net sales in fiscal 2023 in the United States locations of the Watch and Accessory Brands segment were $227.3 million, below the prior year period by $16.9 million, or 6.9%, resulting primarily from decreased volumes resulting from lower demand in the Company's wholesale customers in the owned brand category and a decrease in online retail, partially offset by the impact of pricing increases.
United States Watch and Accessory Brands Net Sales Net sales for fiscal 2024 in the United States locations of the Watch and Accessory Brands segment were $191.3 million, below the prior year by $36.0 million, or 15.8%, resulting primarily from decreased volumes due to lower demand in the Company's wholesale customers in both the owned and licensed brand categories and a decrease in online retail.
At January 31, 2023, zero remains available for purchase under the Company’s March 25, 2021 repurchase program and $21.0 million remains available for purchase under the Company's 38 November 23, 2021 repurchase program.
At January 31, 2024, $17.9 million remains available for purchase under the Company's November 23, 2021 repurchase program.
Other Non-Operating Income Other non-operating income consist primarily of interest income and the non-service components of the Company's Swiss pension plan. In addition, for the fiscal year ended January 31, 2022, the Company recorded other non-operating income due to the final settlement related to a sale of a building in an international location in the prior year period.
Also, for the fiscal year ended January 31, 2022, the Company recorded other non-operating income due to the final settlement related to a sale of a building in an international location in the prior year period. Interest Expense To the extent it borrows, the Company records interest expense on its revolving credit facility.
This increase is attributable to growth in both the Watch and Accessory Brands segment and Company Stores segment. For fiscal 2023, fluctuations in foreign currency exchange rates negatively impacted net sales by $31.8 million when compared to the prior year. On a constant dollar basis net sales increased 7.0% as compared to the prior year.
This decrease is attributable to the Watch and Accessory Brands segment and, to a lesser extent, the Company Stores segment. For fiscal 2024, fluctuations in foreign currency exchange rates positively impacted net sales by $8.6 million when compared to the prior year. Excluding this $8.6 million impact, net sales would have decreased by 11.7% as compared to the prior year.
Increased SG&A expenses were partially offset by a decrease in performance-based compensation of $7.6 million. U.S. Watch and Accessory Brands Operating (Loss)/Income In the United States locations of the Watch and Accessory Brands segment, for the twelve months ended January 31, 2023, the Company recorded an operating loss of $3.0 million, which includes unallocated corporate expenses of $37.0 million.
Watch and Accessory Brands Operating Loss In the United States locations of the Watch and Accessory Brands segment, for the twelve months ended January 31, 2024, the Company recorded an operating loss of $30.0 million which includes unallocated corporate expenses of $30.8 million.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and those significant policies are more fully described in Note 1 to the Company’s consolidated financial statements.
ASC Topic 740 requires the Company to recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts and tax bases of existing assets and liabilities. 28 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Company’s Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and those significant policies are more fully described in Note 1 to the Company’s Consolidated Financial Statements.
Products in the licensed brands category include the following brands manufactured and distributed under license agreements with the respective brand owners: Coach®, Tommy Hilfiger®, Hugo Boss®, Lacoste® and Calvin Klein®. The Company's collaboration with Scuderia Ferrari ended on June 30, 2022, although the Company had the right to sell remaining inventory through December 31, 2022.
Products in the licensed brands category include the following brands manufactured and distributed under license agreements with the respective brand owners: Coach®, Tommy Hilfiger®, Hugo Boss®, Lacoste® and Calvin Klein®.
Although the Company is continuing to evaluate the IR Act and its potential impact on future periods, at this time the Company does not expect the IR Act to have a material impact on its consolidated financial statements.
Although the Company is continuing to evaluate the IR Act and its potential impact on future periods, at this time the Company does not expect the IR Act to have a material impact on its Consolidated Financial Statements. 30 The OECD has issued Pillar Two model rules implementing a new global minimum tax of 15%, which is intended to be effective on January 1, 2024.
The change to operating loss from operating income was the result of lower gross profit of $9.2 million, combined with an increase in SG&A expenses of $3.4 million when compared to the prior year.
The decrease in operating income was the result of a decrease in gross profit of $56.0 million combined with higher SG&A expenses of $1.5 million when compared to the prior year.
Excluding the reversal in corporate initiative charges in the prior year SG&A expenses would have increased $1.1 million primarily due to the following factors: an increase in payroll related expense of $1.8 million; higher marketing expenses of $1.0 million; and an increase in sales commissions of $0.4 million.
The increase in SG&A expenses was primarily due to the following factors: an increase in payroll related expenses of $11.0 million; higher marketing expenses of $1.4 million; and an increase in travel and entertainment expenses of $1.1 million.
The Company's obligations include operating lease obligations (see Note 13- Leases), licensing agreements (see Note 12 - Commitments and Contingencies), purchase obligations (see Note 12 - Commitments and Contingencies) and transition tax obligation (see Note 12 - Commitments and Contingencies).
The Company has various contractual obligations as part of its ordinary course of business. The Company's obligations include operating lease obligations (see Note 11- Leases), licensing agreements (see Note 10 - Commitments and Contingencies), purchase obligations (see Note 10 - Commitments and Contingencies) and transition tax obligation (see Note 10 - Commitments and Contingencies).
The decrease was due to no borrowings under the Company’s revolving credit facility during fiscal 2023, partially offset by higher unused credit line fees during fiscal 2023 as compared to fiscal 2022. Income Taxes The Company recorded an income tax provision of $24.9 million and $24.8 million for fiscal 2023 and 2022, respectively.
There were no borrowings under the Company's revolving credit facility during fiscal 2024 and 2023. 33 Income Taxes The Company recorded an income tax provision of $12.7 million and $24.9 million for fiscal 2024 and 2023, respectively.
Under both share repurchase programs, the Company is permitted to purchase shares of its common stock from time to time through open market purchases, repurchase plans, block trades or otherwise.
Under the share repurchase program, the Company is permitted to purchase shares of its common stock from time to time through open market purchases, repurchase plans, block trades or otherwise. During fiscal 2024, the Company repurchased a total of 111,722 shares of its common stock at a total cost of $3.1 million, or an average of $27.89 per share.
The increase in operating income was the result of an increase in gross profit of $24.2 million, partially offset by higher SG&A expenses of $2.1 million. The increase in gross profit of $24.2 million was primarily the result of higher net sales, combined with a higher gross margin percentage primarily due to a favorable sales mix.
The decrease in gross profit of $29.9 million was primarily the result of lower net sales, combined with a lower gross margin percentage primarily due to an unfavorable impact of sales mix, the decreased leveraging of higher fixed costs over lower sales, partially offset by lower shipping costs.
Borrowers”), each a wholly owned domestic subsidiary of the Company, and Movado Watch Company S.A. and MGI Luxury Group S.A., each a wholly owned Swiss subsidiary of the Company, entered into an Amended and Restated Credit Agreement (as subsequently amended, the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”).
The Company and its U.S. and Swiss subsidiaries (collectively, the "Borrowers") are parties to an Amended and Restated Credit Agreement originally dated October 12, 2018 (as subsequently amended, the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”).
The decrease is primarily due to fluctuations in foreign currency exchange rates and online retail, partially offset from higher demand with growth in the Company's wholesale customers, and to a lesser extent, the impact of pricing increases.
The decrease in net sales was in both the owned and licensed brand categories primarily due to decreased volumes resulting from lower demand in the Company's wholesale customers and a decrease in online retail, partially offset by the positive impact of fluctuations in foreign exchange rates.
The increase in SG&A expenses were partially offset by a decrease in performance-based compensation of $6.2 million.
The decrease in SG&A expenses of $2.9 million was primarily due to a decrease in performance-based compensation of $8.1 million. This decrease in SG&A expenses was partially offset by an increase in payroll related expenses of $5.5 million and an increase in travel and entertainment expenses of $0.6 million.
The increase in gross margin percentage of approximately 50 basis points for fiscal 2023 resulted primarily from a favorable impact of sales mix of approximately 120 basis points, partially offset by a negative impact of fluctuations in foreign exchange rates of approximately 70 basis points and approximately 20 basis points impact due to increased shipping costs.
The decrease in the gross margin percentage of approximately 260 basis points for fiscal 2024 reflected an unfavorable impact of sales mix of approximately 180 basis points, the decreased leveraging of higher fixed costs over lower sales of approximately 90 basis points and a negative impact of fluctuations in foreign exchange rates of approximately 30 basis points, partially offset by decreased shipping costs of approximately 40 basis points.
The Inflation Reduction Act of 2022 In August 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law by President Biden.
This guidance also provides guidance for de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transitions. RECENT DEVELOPMENTS AND INITIATIVES The Inflation Reduction Act of 2022 In August 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law by President Biden.
Watch and Accessory Brands Net Sales Net sales in fiscal 2023 in the Watch and Accessory Brands segment were $640.3 million, an increase above the prior year period of $14.1 million, or 2.3%.
Watch and Accessory Brands Net Sales Net sales for fiscal 2024 in the Watch and Accessory Brands segment were $568.7 million, below the prior year by $71.7 million, or 11.2%.
Company Stores Net Sales Net sales in fiscal 2023 in the Company Stores segment were $111.6 million, $5.4 million or 5.1% above the prior year period. The net sales increase was primarily the result of the growth of the Company's online outlet store at www.movadocompanystore.com and the opening of new retail outlet stores.
Company Stores Net Sales Net sales for fiscal 2024 in the Company Stores segment were $103.9 million, $7.6 million or 6.8% below the prior year. The net sales decrease was primarily due to sales mix in the Company stores and a decrease in sales from the Company's online outlet store at www.movadocompanystore.com, partially offset by new store openings.
The cash used in fiscal 2023 included $31.4 million in stock repurchased in the open market, $31.4 million in dividends paid and $1.1 million in shares repurchased as a result of the surrender of shares in connection with the vesting of certain stock awards, offset by $1.6 million received in connection with stock options exercised.
Cash used in financing activities in fiscal 2023 included $31.4 million in stock repurchased in the open market and $31.4 million in dividends paid.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+2 added−1 removed9 unchanged
Biggest changeAs of January 31, 2023, the Company’s entire net forward contracts hedging portfolio consisted of 14.7 million Chinese Yuan equivalent, 30.0 million Swiss Francs equivalent, 15.7 million US Dollars equivalent, 22.8 million Euros equivalent (including 3.0 million Euros designated as cash flow hedges) and 0.6 million British Pounds equivalent with various expiry dates ranging through June 1, 2023, compared to a portfolio of 7.4 million Chinese Yuan equivalent, 28.0 million Swiss Francs equivalent, 16.2 million US Dollars equivalent, 37.5 million Euros equivalent (including 18.0 million Euros designated as cash flow hedges) and 1.5 million British Pounds equivalent with various expiry dates ranging through July 13, 2022, as of January 31, 2022.
Biggest changeDollars equivalent, 26.2 million Euros equivalent (including 9.0 million Euros designated as cash flow hedges) and 1.4 million British Pounds equivalent with various expiry dates ranging through June 13, 2024, compared to a portfolio of 14.7 million Chinese Yuan equivalent, 30.0 million Swiss Francs equivalent, 15.7 million U.S.
The Company did not hold any future contracts in its gold hedge portfolio as of January 31, 2023 and 2022; thus, any changes in the gold purchase price will have an equal effect on the Company’s cost of sales. Debt and Interest Rate Risk Floating rate debt at January 31, 2023 and 2022 was zero for both periods.
The Company did not hold any future contracts in its gold hedge portfolio as of January 31, 2024 and 2023; thus, any changes in the gold purchase price will have an equal effect on the Company’s cost of sales. Debt and Interest Rate Risk Floating rate debt at January 31, 2024 and 2023 was zero for both periods.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk Foreign Currency Exchange Rate Risk The Company’s primary market risk exposure relates to foreign currency exchange risk (see Note 10 – Derivative Financial Instruments to the Consolidated Financial Statements). A significant portion of the Company’s purchases are denominated in Swiss Francs and, to a lesser extent, the Japanese Yen.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk Foreign Currency Exchange Rate Risk The Company’s primary market risk exposure relates to foreign currency exchange risk (see Note 8 – Derivative Financial Instruments to the Consolidated Financial Statements). A significant portion of the Company’s purchases are denominated in Swiss Francs and, to a lesser extent, the Japanese Yen.
During fiscal 2023, the Company had no borrowings. The Company does not hedge these interest rate risks. 40
During fiscal 2024, the Company had no borrowings. The Company does not hedge these interest rate risks. 37
As of January 31, 2023, the Company’s British Pound, Chinese Yuan and US Dollar forward contracts had no gain or loss. 39 Commodity Risk The Company considers its exposure to fluctuations in commodity prices to be primarily related to gold used in the manufacturing of the Company’s watches.
Dollar forward contracts had no gain or loss. 36 Commodity Risk The Company considers its exposure to fluctuations in commodity prices to be primarily related to gold used in the manufacturing of the Company’s watches. Under its hedging program, the Company can purchase various commodity derivative instruments, primarily futures contracts.
If the Company were to settle its Swiss Franc forward contracts at January 31, 2023, the result would be a $1.1 million gain. If the Company were to settle its Euro forward contracts at January 31, 2023, the result would be a $0.2 loss million.
Dollars equivalent, 22.8 million Euros equivalent (including 3.0 million Euros designated as cash flow hedges) and 0.6 million British Pounds equivalent with various expiry dates ranging through June 1, 2023, as of January 31, 2023. If the Company were to settle its Swiss Franc forward contracts at January 31, 2024, the result would be a $0.5 million gain.
Removed
Under its hedging program, the Company can purchase various commodity derivative instruments, primarily futures contracts.
Added
As of January 31, 2024, the Company’s entire net forward contracts hedging portfolio consisted of 8.3 million Chinese Yuan equivalent, 20.0 million Swiss Francs equivalent, 18.7 million U.S.
Added
If the Company were to settle its Euro forward contracts at January 31, 2024, the result would be an immaterial gain. As of January 31, 2024, the Company’s British Pound, Chinese Yuan and U.S.

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