Movado Group Inc.

I would like to turn the conference over to Rachel Schachter of ICR. Please go ahead.

Thank you. Good morning, everyone. With me on the call is Ephraim Grimberg, Chairman and Chief Executive Officer, and Sally DeMarcilla, Executive Vice President, Chief Operating Officer, and Chief Financial Officer. Before we get started, I would like to remind you of the company's Safe Harbor language, which I'm sure you're all familiar with. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release. If any non-GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release. Now I'd like to turn the call over to Ephraim Grimberg, Chairman and Chief Executive Officer of Movado Group.

Thank you, Rachel. Good morning and welcome to Movado Group's third quarter conference call. This morning, I will review the highlights of the quarter, current operating environment, and progress on our strategic initiatives. And then Sally DeMarcellis, our COO and CFO, We'll review our financial results in greater detail as well as our outlook. In an ongoing challenging environment for discretionary products in our largest markets in Europe and the United States, our company continued to report strong profitability, maintain a durable balance sheet, and generate strong cash flow while investing behind our brands, people, and product innovation to position the company to accelerate growth in the future. For the third quarter, our sales declined 11.2% to $187.7 million, or 13.5% on a constant dollar basis. Our operating profit was $20.7 million versus $38.3 million last year. Our adjusted earnings per share were 78 cents against $1.31 in the third quarter last year. While the environment was challenging, we achieved noteworthy accomplishments. We continue to maintain a strong balance sheet with $201 million in cash and no debt, and we returned $47.7 million in dividends and stock repurchases to our shareholders during the first nine months of this fiscal year. As the year has progressed, we've seen the challenging retail environment advance into more categories and retailers. As we proceed through the important holiday quarter, we are taking a cautious view while supporting important marketing initiatives to ensure that our brands get stronger while we navigate the uncertain retail climate and steer clear of the excessive promotional environment. The continued strength of our balance sheet allows us to build a strong foundation for the next period of growth from Avado Group. While we remain cautious for the holiday season, we are confident in our ability to navigate the current global challenges and emerge stronger as we have throughout our history. We believe that now is the time to drive change, drive innovation in both products and marketing, and support our most important markets while continuing to grow emerging markets like India and newer brands like Calvin Klein. Turning to the review of the quarter. For the third quarter, our U.S. business declined by 12.3% and our international business declined by 10.4% as the retail environment remained challenging and retailers around the world focused on bringing down inventories as they entered the fourth quarter. Despite this backdrop, we're excited about the key products that we're featuring in each of our brands and the marketing initiatives that we have in place to help drive holiday sales. As we have talked about on previous calls, we are pleased with the rollout of our Movado brand refresh, which began in September and will hit critical mass during the important holiday quarter. Iconic brands need to continue to evolve while staying true to their heritage and DNA. Having been founded in 1881 and with a rich history, Movado is one of those brands. In September, we rolled out new brand imaging inspired by a Movado logo from the 1920s. In October and November, our new Movado brand advertising campaign began to appear in magazines, digital venues, and out of home. We have already received very encouraging feedback from customers, and we expect to see the positive impact of both these new creative efforts as well as increased investments during the important holiday quarter. During the holiday season, consumers will see our new TV commercials on cable networks and on YouTube TV, an increasingly popular venue for consumers. We're also introducing new product families, and we're already seeing strong demand for our new Movado Bold Evolution 2.0, which was introduced during the third quarter. In addition, our continued emphasis on automatic watches saw Movado sales in this category increase by over 65% in the third quarter. As we had discussed during our second quarter conference call, we anticipated the fashion watch and jewelry category would remain challenging in Europe. For the quarter, our licensed brands declined by 12.6% as middle-class consumers were pressured by increasing inflation. Our team has worked diligently to update our fashion watch and jewelry strategy to succeed in an evolving landscape, and we expect this effort to begin to gain traction next year. In each of our brands, we are focused on introducing longer-lasting, iconic families supported by comprehensive marketing campaigns and compelling storytelling. This holiday season, we are seeing a strong response from our retailers to our new product introductions in each of our brands. In Tommy Hilfiger, we are introducing the new TH85 automatic watch that we believe will be an icon for the Tommy Hilfiger brand. We will be featuring this family in our billboard campaigns and in-store through a special feature display. In BOSS, we're introducing a new range of modern sport luxe watches in the Kander collection. Kander features an integrated bracelet and will be available both in automatic and quartz. Kander is right on trend, and we will continue to expand this collection and feature it in our seasonal marketing programs. In addition, we have introduced Troper, an aggressively priced chronograph collection in both bracelets and straps. In the jewelry arena, we are featuring our Heavy Link Olympia collection and ads with British actress Suki Waterhouse. In our Coach brand, we have seen a strong response from consumers to our Elliott collection, which was introduced earlier this year. We're also introducing a new small squared shaped collection which is right on the current trend of smaller-shaped watches. We're also expanding the iconic 1212 family in Lacoste into automatics and introducing a new diver-inspired collection for Lacoste fin. We'll be featuring both our new 1212 automatic and fin in our holiday marketing programs. A little more than 18 months into our launch of our Calvin Klein brand, we're building our distribution and fine-tuning the product assortment. We are seeing success in our iconic twisted bezel collection and our charming bangle watch collections, in addition to our iconic jewelry families. For the holiday season, we're launching the new elated bangle family, which has received a strong response from retailers around the world. On the marketing front, we're featuring Lila Moss in our advertising campaign. For Olivia Burton, we're seeing a strong response from consumers to two new leading families. our shaped Grosvenor watch, and our new Hex collection, a boyfriend-sized family. Both of these new collections are driving strong performance on our OB website. In addition, we're encouraged by the positive response we've gotten to our new honeycomb jewelry collection. We saw a brick-and-mortar Movado Company stores business decline by approximately 6% for both the third quarter and the first nine months of fiscal 2024. We're already seeing improvements during the fourth quarter. As it relates to our outlook, while we have seen some trend improvement in recent weeks and are beginning to see the impact of our new Movado marketing initiatives, we felt that it was prudent to modify our outlook given the uncertain retail environment and the challenges that retailers are experiencing in the US and even to a greater extent in Europe, our two largest markets. We remain excited about the opportunities that lie ahead And our teams are energized as they develop innovation on the product and marketing front for the balance of this year, and most importantly, as we prepare for next year. As a company, we have a long history of overcoming significant changes both in the watch and jewelry categories and in the retail marketplace and are confident that we will continue to do so. We have a healthy balance sheet with a strong cash position and no debt, which allows us to invest for the future while ensuring that we execute to support our brands and our businesses. I would now like to turn the call over to Sally.