Movado's sales rose 4.9%, the exact figure by which Fossil's fell

§1The same number, two companies, opposite signs.

Movado Group filed its quarterly report on 26 August for the three months to 31 July, and net sales rose $7.9 million or 4.9% on the prior-year period. This paper reported on 26 August that Fossil Group's net sales fell 4.9% in its own most recent quarter. The symmetry is exact and the periods are not: Fossil's quarter ended 4 July and Movado's ended 31 July, twenty-seven days apart, so these are neighbouring quarters rather than the same one. With that stated, two US-listed watch groups reporting within a fortnight of each other moved the same distance in opposite directions.

§2Licensed brands grew thirteen times faster than the company's own name.

The composition. Watch and Accessory Brands, the larger segment, made $142.9 million, up $7.2 million or 5.3%, and Company Stores made $26.9 million, up $0.7 million or 2.8%. The two sum to $169.8 million, which puts the watch and accessory segment at 84.2% of the company on this desk's arithmetic. Inside the larger segment the growth is not evenly spread: licensed brands added $8.3 million or 9.0% while owned brands added $0.3 million or 0.7%. Geographically, United States locations made $47.5 million, up 5.9%, and international $95.4 million, up 5.0%, of which $0.7 million was favourable currency. Excluding that currency effect the company says net sales would have risen 4.4% rather than 4.9%.

§3A quarter of the profit is a tariff refund.

The profit line moved much further than the sales line. Net income attributable to Movado Group was $12.3 million against $3.0 million a year earlier, which is 4.10 times, and across six months $19.2 million against $4.4 million, or 4.36 times.

Gross profit rose $13.3 million on sales that rose $7.9 million, and gross margin expanded by approximately 530 basis points. The company attributes roughly 380 of those basis points to favourable sales mix. It also records $3.2 million of duty refunds received under the IEEPA tariff regime inside gross profit for the quarter.

That refund line is worth separating from the operating result. Against net income of $12.3 million, $3.2 million of duty refunds is a little over a quarter of the quarter's profit, and it is a recovery of duties previously paid rather than a trading gain.

This paper covered a watch retailer taking the same tariff regime to court on 28 July. A reader comparing this quarter with the next should expect the refund not to repeat, and should note the company operated 57 retail outlet locations at both period ends, so the store estate did not contribute growth by expansion.