Movado Group Inc.

Good day, everybody, and welcome to the Movado Group third quarter fiscal 2026 earnings call. As a reminder, today's call is being recorded and may not be reproduced in full or in part without permission from the company. At this time, I would like to turn the conference over to Allison Melkin of ICR. Please go ahead.

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

Thank you, Alison. Good morning and welcome to Movado Group's third quarter conference call. Joining me today is our Executive Vice President and CFO, Sally DeMarcellis. After I review the highlights of our quarterly results and the progress we're making against our strategic initiatives, Sally will discuss our financial results for the quarter and year to date in greater detail. We'll then be glad to take your questions. We're pleased with our results for the third quarter. And more importantly, with the progress we're making in building our brands and business in a sustainable way. In a globally challenging retail environment, we delivered revenue growth of 3.1% to $186.1 million. Excluding the Middle East, where we have rebuilt our team and are refining our strategy, growth was 5.9%. We plan to return to growth in that region next year. For the quarter, gross margin improved by 80 basis points to 54.3% compared to 53.5% last year, despite a $4.5 million and 230 basis point impact from incremental U.S. tariffs. After quarter end, the U.S. and Switzerland announced a framework agreement that we expect will lower our overall U.S. tariff rate on Swiss watches to 15%, roughly one-third of the rate we've paid since August. This positive development will allow us to plan effectively for next year and reduce the level of price-based mitigation, benefiting both American consumers and the company. Adjusted operating income grew more than 40% to $12.6 million. For the first nine months, we generated positive operating cash flow of $1.3 million versus the use of cash of $40.6 million last year. We ended the quarter with a strong balance sheet, $183.9 million in cash and no debt. And our board has approved a quarterly dividend of 35 cents per share. This quarter reflects continued progress on our strategic priorities, strengthening our brands, driving innovation, and delivering improving financial results. Our results are a direct reflection of our team's effort, dedication, and commitment. Despite ongoing global economic and political uncertainty, we're increasingly optimistic about the improving dynamics in the fashion and accessible luxury watch categories, driven by innovation in new shapes and sizes and growing interest from women and younger consumers. We're also seeing a strong momentum in fashion jewelry, supported by the growing adoption of jewelry for men. Regionally, we're pleased that the United States returned to 6.9% growth, led by our fashion brand business and our direct-to-consumer business. 11.9% growth in Movado Company stores and 12.4% growth on movado.com. Internationally, our business in Europe and Latin America continue to perform strongly, partially offset by softer results in the Middle East. From a branding standpoint, we're very pleased with the progress we're making on the Movado brand. Our product innovation this year has resonated strongly. The museum collection performed well, particularly our new bangle collection, and we're introducing a new style set with lab-grown diamonds for the holiday season. This collection will be featured prominently in holiday marketing with Jessica Alba and Julianne Moore. For men, we launched the Automatic Museum Imperial, a new hero collection inspired by an iconic design from the late 1970s. Holiday marketing will feature the collection in videos with star running back Christian McCaffrey. In bold, our limited edition collaboration with brand ambassador Ludacris, celebrating the 25th anniversary of his debut album, has been a standout. The MVP collection is already sold out. We're also seeing strong growth in Movado heritage, inspired by our rich archives. The new 1917 collection, based on a square vintage design from that year, has launched successfully, supported by a digital campaign featuring basketball superstar Tyrese Halliburton, who is an avid vintage watch collector. Sell-through is strong across both men's and women's styles. Our holiday campaign is designed to deepen engagement between our products, ambassadors, and consumers, while driving performance at the point of sale through enhanced displays, training, and retail partner support to ensure an elevated in-store experience. The Movado brand helped drive double-digit growth in both sales and contribution margin in our company's stores. Overall sales in Movado Company stores grew 9.4% on a comparable store basis, with Movado brand sales up 17.7%. Over the past year, we've refreshed all Movado displays and visuals in our stores, improved assortments, leading to strong results from these initiatives. Among our licensed brands, we saw strong performance in both jewelry and watches, delivering a 6.4% growth overall and a 2.9% on a constant currency basis. Leading the way to Gen Z consumers has been Coach, which continues to drive double-digit growth led by the SAMI collection, inspired by Coach's iconic turn lock. We've expanded this hero family with SAMI stretch bracelets and a mini ring watch, which is trending strongly. Other successes include the Catty, Cass, and Reese families, all featuring shaped cases. Hugo Boss continues to perform well, led by hero families such as Sky Traveler, the Grand Prix, and the Principal Tank Watch. We're also excited about the potential in Hugo Boss jewelry, particularly for men, led by the watch-inspired Kandor bracelet. For Tommy Hilfiger, the new TH Oxford family, with a dial inspired by the classic Oxford shirt, is gaining traction, with new case shapes rolling out this fall. On the women's side, we are increasing our penetration with our best-selling Mia collection, already sold out in many markets. Lacoste continues to set trends in jewelry with the best-selling Metropole collection and strong results in the rugged LC33 Annie Digi line, which is truly aligned with the Lacoste brand. The new black and gold version introduced this fall is expected to sell out over the holidays. In Calvin Klein, we're building leadership in women's watches, complemented by a strong jewelry offering. The Mini Pulse has quickly become a bestseller, and the new micro contemporary is performing very well. For Olivia Burton, we're seeing healthy growth in our two key markets, the US and the United Kingdom, led by the Mini Grove Collection and our Mini to the Max campaign, which will continue through the spring. We're very proud of our team's execution this year, especially following a challenging fiscal 2025. We're making strong progress against our strategic initiatives and capturing opportunities across global markets. We're also encouraged by the renewed interest among younger consumers embracing analog watches for their design, innovation, quality, and value. With our strong portfolio of brands, we're well positioned to capture this momentum. At the same time, we've made meaningful strides in improving gross margin and controlling expenses as we return to sales growth. Looking ahead, our focus remains on driving improved profitability across every aspect of the business. We're looking forward to a strong holiday season and to building on this momentum as we plan for the next year. I'll now turn the call over to Sally.