CaratMovado first-half operating income rises 409% to $21.9 million
Net sales for the six months to 31 July reached $312.2 million, up 6.3%, on a gross margin of 58.4% against 54.1%. The figures come from Movado Group's quarterly filing with the SEC.
Operating income more than quintupled. Operating income for the six months to 31 July was $21.9 million against $4.3 million a year earlier. Net sales rose 6.3%.
If you sell licensed watch brands: the margin came from mix, not volume. Sales rose 6.3% while gross profit rose 14.8%.
If you price against Movado: 58.4% is the new comparison. Last year's 54.1% is 4.3 points behind.
What this is not: a demand story. Net sales rose 6.3%. The profit swing is mostly margin.
| Measure | 2026 | 2025 | Change |
|---|---|---|---|
| Net sales | $312.2m | $293.6m | +6.3% |
| Gross profit | $182.4m | $158.9m | +14.8% |
| Gross margin | 58.4% | 54.1% | +4.3pp |
| Operating income | $21.9m | $4.3m | +409% |
| Net income | $19.2m | $4.4m | +336% |
| Diluted EPS | $0.84 | $0.20 | +320% |
IMargin did most of the work
Gross margin expanded. Gross profit rose 14.8% on net sales up 6.3%. That gap is the whole shape of the half.
The level matters. Margin reached 58.4% of net sales against 54.1% a year earlier, a gain of 4.3 points.
IIThe base was low
Last year was weak. The prior half earned $4.3 million of operating income on $293.6 million of net sales. That is an operating margin of 1.5%.
This year is different. The current half earned $21.9 million on $312.2 million, an operating margin of 7.0%.
IIICosts rose with the profit
Operating expenses grew. Gross profit gained $23.5 million while operating income gained $17.6 million. The difference, $5.9 million, went to operating costs.
Earnings followed. Net income attributable to Movado Group reached $19.2 million against $4.4 million a year earlier.
Per share, too. Diluted earnings were $0.84 a share against $0.20 a year earlier.
01What would change this call+
A third quarter in which gross margin falls back toward 54% while net sales keep rising. That would make this half a pricing and mix window rather than a durable margin level, and the comparison advice above would be withdrawn.
02How the margin is read+
Gross margin here is gross profit divided by net sales, both taken from the same consolidated statement of operations in Movado Group's Form 10-Q. It is not adjusted and it takes no account of operating expenses. Operating margin is operating income over net sales on the same basis.
03Method · the desk’s arithmetic+
Every percentage in this article is Carat Capital's own division of figures printed in Movado Group's Form 10-Q for the six months to 31 July 2026, which states them in thousands of dollars. Operating income: 21,893 divided by 4,298 is 5.094, so +409%. Gross margin: 182,418 divided by 312,154 is 58.44%, against 158,915 divided by 293,598 at 54.13%, a gain of 4.31 points. Net sales: +6.32%. Gross profit: +14.79%. Net income: +336.4%. Of the $23.5 million gross-profit gain, $13.2 million is margin, being the difference between this half's gross profit and what last year's 54.13% would have produced on this year's sales, and $5.3 million is the extra volume. The archive check follows the period test: Carat Capital's 27 August piece covers the quarter to 31 July alone, net sales $169.8 million; this filing covers the six months that contain it. Same company, different period, so the story is advanced rather than repeated.
17 weeks in, Watches of Switzerland holds 5-10% guidance
The other watch retailer filing this week, and the one that sells what Movado makes.
The trade, filed before the New York open.
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