MOVADO GROUP, INC. ANNOUNCES FOURTH QUARTER
AND FISCAL YEAR 2020 RESULTS

~ Discontinues Quarterly Dividend Pending Clarity on COVID-19 ~

Paramus, NJ – March 26, 2020 -- Movado Group, Inc. (NYSE: MOV) today announced fourth quarter and fiscal year 2020 results for the periods ended January 31, 2020.

Efraim Grinberg, Chairman and Chief Executive Officer, stated, “In a period of unprecedented times where COVID-19 has affected communities around the world, we’re focused on the health of our associates, customers and business partners. We have temporarily closed all of our stores and asked office workers around the world to work from home, with the exception of Asia which recently reopened. Due to the increasing uncertainty related to the potential impacts of COVID-19, we are not providing an annual outlook at this time.”

Mr Grinberg continued, “In the near term, we are reducing costs and allocating our resources to maximize financial flexibility and allow us to navigate through a difficult environment. We’re fortunate to have balance sheet strength with approximately $190 million in cash as of March 25, 2020 after giving effect to a recent draw down of $30 million on our credit facility. We have decided to discontinue our regular quarterly dividend with an expectation to resume the dividend when business conditions warrant it. We believe that our powerful portfolio of brands, and talented and passionate team that is focused on bringing to market innovative assortments will serve us well when conditions stabilize. Overall, we believe we are well positioned to navigate these challenging times.”

Fourth quarter fiscal 2020 results of operations included the following charges and benefits:

Fourth quarter fiscal 2019 results of operations included the following charges and benefits:

Given the rapidly changing environment with COVID-19, the Company is refraining from providing fiscal 2021 guidance. The Company expects the COVID-19 pandemic to negatively impact its business, results of operations, and financial position; however, the related financial impact cannot be reasonably estimated at this time.

The Company is taking a number of proactive measures to increase its financial flexibility during this period of uncertainty, including strategic cost reductions across all functional areas and borrowing an additional $30 million on its revolving credit facility in March 2020. The Company’s strong balance sheet, with approximately $190 million of cash as of March 25, 2020, will help it navigate the current unprecedented situation. Additionally, the Company maintains strong, long-term relationships with its vendors, landlords and banking partners.

In light of the uncertainty caused by the COVID-19 pandemic, the Company’s Board of Directors discontinued the regular quarterly dividend until further notice. The Company remains committed to paying a dividend over the long-term and it would seek to resume a dividend when appropriate following stabilization in the environment.

During fiscal 2020 the Company repurchased approximately 131,000 shares under its share repurchase program. As of January 31, 2020, the Company had $36.4 million remaining under the $50.0 million share repurchase authorization. However, the Company’s Board of Directors has determined to suspend share repurchases until further notice.

Movado Group, Inc. designs, sources, and distributes MOVADO®, MVMT®, OLIVIA BURTON®, EBEL®, CONCORD®, COACH®, TOMMY HILFIGER®, HUGO BOSS®, LACOSTE®, SCUDERIA FERRARI®, REBECCA MINKOFF® and URI MINKOFF® watches worldwide, and operates Movado company stores in the United States and Canada.

In this release, the Company presents certain financial measures that are not calculated according to generally accepted accounting principles in the United States (“GAAP”). Specifically, the Company is presenting adjusted gross profit, adjusted gross margin, adjusted operating expenses and adjusted operating income, which are gross profit, gross margin, operating expenses and operating income, respectively, under GAAP, adjusted to eliminate the expenses and amortization of acquisition accounting adjustments related to the Olivia Burton acquisition, integration and acquisition costs as well as the amortization of acquisition accounting adjustments related to MVMT and charges for the Company’s cost savings initiatives. The Company is also presenting adjusted tax provision, which is the tax provision under GAAP, adjusted to eliminate the impact of tax benefits related to the 2017 Tax Act as well as other tax benefit of foreign tax items, charges for the Olivia Burton and MVMT acquisitions, and the Company’s cost savings initiatives. The Company believes these adjusted measures are useful because they give investors information about the Company’s financial performance without the effect of certain items that the Company believes are not characteristic of its usual operations. The Company is also presenting adjusted net income, adjusted earnings per share and adjusted effective tax rate, which are net income, earnings per share and effective tax rate, respectively, under GAAP, adjusted to eliminate the after-tax impact of tax benefits related to the 2017 Tax Act as well as other tax benefit of foreign tax items, amortization of acquisition accounting adjustments and other charges related to the Olivia Burton and MVMT acquisitions, and the Company’s cost savings initiatives. The Company believes that adjusted net income, adjusted earnings per share and adjusted effective tax rate are useful measures of performance because they give investors information about the Company’s financial performance without the effect of certain items that the Company believes are not characteristic of its usual operations. Additionally, the Company is presenting constant currency information to provide a framework to assess how its business performed excluding the effects of foreign currency exchange rate fluctuations in the current period. Comparisons of financial results on a constant dollar basis are calculated by translating each foreign currency at the same U.S. dollar exchange rate as in effect for the prior-year period for both periods being compared. The Company believes this information is useful to investors to facilitate comparisons of operating results. These non-GAAP financial measures are designed to complement the GAAP financial information presented in this release. The non-GAAP financial measures presented should not be considered in isolation from or as a substitute for the comparable GAAP financial measures, and the methods of their calculation may differ substantially from similarly titled measures used by other companies.

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, whenever possible, to identify these forward-looking statements using words such as “expects,” “anticipates,” “believes,” “targets,” “goals,” “projects,” “intends,” “plans,” “seeks,” “estimates,” “may,” “will,” “should” and variations of such words and similar expressions. Similarly, statements in this press release that describe the Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual results, performance or achievements and levels of future dividends to differ materially from those expressed in, or implied by, these statements. These risks and uncertainties may include, but are not limited to general economic and business conditions which may impact disposable income of consumers in the United States and the other significant markets (including Europe) where the Company’s products are sold, uncertainty regarding such economic and business conditions, trends in consumer debt levels and bad debt write-offs, general uncertainty related to possible terrorist attacks, natural disasters, pandemics, including the effect of COVID-19 and other diseases on travel and traffic in our retail stores and wholesale business, the stability of the European Union (including the impact of the United Kingdom’s process to exit from the European Union), the stability of the United Kingdom after its exit from the European Union, and defaults on or downgrades of sovereign debt and the impact of any of those events on consumer spending, changes in consumer preferences and popularity of particular designs, new product development and introduction, decrease in mall traffic and increase in e-commerce, the ability of the Company to successfully implement its business strategies, competitive products and pricing, the impact of “smart” watches and other wearable tech products on the traditional watch market, seasonality, availability of alternative sources of supply in the case of the loss of any significant supplier or any supplier’s inability to fulfill the Company’s orders, the loss of or curtailed sales to significant customers, the Company’s dependence on key employees and officers, the ability to successfully integrate the operations of acquired businesses without disruption to other business activities, the possible impairment of acquired intangible assets including goodwill if the carrying value of any reporting unit were to exceed its fair value, volatility in reported earnings resulting from changes in the estimated fair value of contingent acquisition consideration, the continuation of the company’s major warehouse and distribution centers, the continuation of licensing arrangements with third parties, losses possible from pending or future litigation, the ability to secure and protect trademarks, patents and other intellectual property rights, the ability to lease new stores on suitable terms in desired markets and to complete construction on a timely basis, the ability of the Company to successfully manage its expenses on a continuing basis, information systems failure or breaches of network security, the continued availability to the Company of financing and credit on favorable terms, business disruptions, and general risks associated with doing business outside the United States including, without limitation, import duties, tariffs (including retaliatory tariffs), quotas, political and economic stability, changes to existing laws or regulations, and success of hedging strategies with respect to currency exchange rate fluctuations, and the other factors discussed in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time. The Company assumes no duty to update its forward looking statements and this release shall not be construed to indicate the assumption by the Company of any duty to update its outlook in the future.

(Tables to follow)

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

MOVADO GROUP, INC.

GAAP AND NON-GAAP MEASURES

(In thousands, except for percentage data)

(Unaudited)

MOVADO GROUP, INC.

GAAP AND NON-GAAP MEASURES

(In thousands, except per share data)

(Unaudited)

(1)	Related to the amortization of acquired intangible assets for Olivia Burton.

(2)	Related to the amortization of acquired intangible assets, accounting adjustments and deferred compensation of MVMT.

(3)	Remeasurement of contingent consideration liability.

(4)	Change in estimate in Fiscal 2020 and Fiscal 2019 for severance and occupancy expenses.

(5)	Related to acquisition costs, amortization of acquired intangible assets and accounting adjustments of MVMT.

(6)	Related to the impact of the 2017 Tax Act as well as tax benefit of other foreign tax items.

MOVADO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)