Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for that past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,’’ “accelerated filer,’’ “smaller reporting company,’’ and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s Common Stock and Class A Common Stock as of ~~November 14, 2017~~May 23, 2022 were ~~16,298,173~~16,031,854 and ~~6,641,950,~~6,524,805 respectively.


	October 31,			January 31,			October 31,			April 30,			January 31,			April 30,
	2017			2017			2016			2022			2022			2021
ASSETS
Current assets:
Cash and cash equivalents	$	155,484		$	256,279		$	199,758		$	225,256		$	277,128		$	186,950
Trade receivables, net		132,941			66,847			130,076			92,744			91,558			78,584
Inventories		169,866			153,167			169,402			180,003			160,283			169,966
Other current assets		26,361			28,487			28,096			23,558			16,974			23,649
Income taxes receivable											3,421			7,941			24,305
Total current assets		484,652			504,780			527,332			524,982			553,884			483,454
Property, plant and equipment, net		24,637			34,173			34,867			18,434			19,470			20,599
Operating lease right-of-use assets											79,717			68,599			72,836
Deferred and non-current income taxes		23,610			24,837			20,614			42,854			42,596			41,528
Goodwill		56,316			—			—
Other intangibles, net		22,568			1,633			1,730			11,990			13,507			16,300
Other non-current assets		47,783			42,379			39,935			62,007			63,104			59,989
Total assets	$	659,566		$	607,802		$	624,478		$	739,984		$	761,160		$	694,706
LIABILITIES AND EQUITY
Current liabilities:
Loans payable to bank, current	$	5,000		$	5,000		$	3,000
Accounts payable		28,014			27,192			22,443		$	44,140		$	46,011		$	34,595
Accrued liabilities		62,666			35,061			52,895			54,698			48,522			45,687
Accrued payroll and benefits											7,822			25,117			9,727
Current operating lease liabilities											16,588			13,693			15,413
Income taxes payable		5,192			4,149			5,601			15,141			18,123			9,128
Total current liabilities		100,872			71,402			83,939			138,389			151,466			114,550
Loans payable to bank		25,000			25,000			35,000			0			0			10,000
Deferred and non-current income taxes payable		7,501			3,322			3,145			19,385			19,614			21,280
Non-current operating lease liabilities											70,440			62,730			65,568
Other non-current liabilities		38,752			34,085			32,297			47,301			50,264			51,528
Total liabilities		172,125			133,809			154,381			275,515			284,074			262,926
Commitments and contingencies (Note 9)
Redeemable noncontrolling interest											2,251			2,311			2,560
Equity:
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; no shares issued		—			—			—
Common Stock, $0.01 par value, 100,000,000 shares authorized; 27,324,319, 27,176,656 and 27,138,206 shares issued and outstanding, respectively		273			272			271
Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,641,950, 6,644,105 and 6,644,105 shares issued and outstanding, respectively		66			66			66
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; 0 shares issued											0			0			0
Common Stock, $0.01 par value, 100,000,000 shares authorized; 28,771,219, 28,633,025 and 28,372,938 shares issued and outstanding, respectively											287			286			284
Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,524,805, 6,524,805 and 6,560,509 shares issued and outstanding, respectively											65			65			65
Capital in excess of par value		189,332			185,354			182,834			224,708			222,615			215,890
Retained earnings		425,649			415,919			413,666			424,160			413,587			346,408
Accumulated other comprehensive income		80,388			76,780			77,057			75,032			85,295			89,406
Treasury Stock, 11,026,671, 10,869,321 and 10,849,321 shares, respectively, at cost		(208,267	)		(204,398	)		(203,797	)
Treasury Stock, 12,673,763, 12,266,978 and 11,558,546 shares, respectively, at cost											(264,602	)		(249,040	)		(225,276	)
Total Movado Group, Inc. shareholders' equity		487,441			473,993			470,097			459,650			472,808			426,777
Noncontrolling interests		—			—			—
Noncontrolling interest											2,568			1,967			2,443
Total equity		487,441			473,993			470,097			462,218			474,775			429,220
Total liabilities and equity	$	659,566		$	607,802		$	624,478
Total liabilities, redeemable noncontrolling interest and equity										$	739,984		$	761,160		$	694,706

NOTE 1 –BASIS OF PRESENTATION

The accompanying interim unaudited ~~consolidated financial statements~~Consolidated Financial Statements have been prepared by Movado Group, Inc. (the “Company”), in a manner consistent with that used in the preparation of the annual audited ~~consolidated financial statements~~Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2017~~2022 (the ~~“2017~~“2022 Annual Report on Form 10-K”). The unaudited ~~consolidated financial statements~~Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the unaudited ~~consolidated financial statements~~Consolidated Financial Statements and the reported amounts of revenues and expenses during the periods reported. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited ~~consolidated financial statements~~Consolidated Financial Statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and results of operations for the periods presented. The consolidated balance sheet data at January 31, ~~2017~~2022 is derived from the audited annual financial statements, which are included in the Company’s ~~2017~~2022 Annual Report on Form 10-K and should be read in connection with these interim unaudited financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. This guidance provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for the Company’s borrowing instruments, which use LIBOR as a reference rate, and is effective immediately, but is only available through December 31, 2022. The Company is evaluating the optional expedients and exceptions in the guidance and while transition from LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, derivatives or other financial instruments or extensions held by or due, the Company does not expect such nor the adoption of ~~ASU 2016-09, “Improvements~~this standard to ~~Employee Share-Based Payment Accounting,” excess tax benefits and deficiencies related to sharebased compensation are reported as operating activities in the statement of cash flows.~~have a material impact on its Consolidated Financial Statements.

NOTE 4 – EARNINGS PER SHARE AND CASH DIVIDENDS

~~NOTE 2 - CHANGES TO CRITICAL ACCOUNTING POLICIES~~

As a result of the acquisition of JLB Brands Ltd., the owner of the Olivia Burton brand, in the second quarter of fiscal 2018, the Company has made the following additions to its critical accounting policies related to intangible assets and goodwill (see Note 17 – Acquisitions).

~~Intangibles~~

In accordance with applicable guidance, the Company estimates and records the fair value of purchased intangible assets at the time of its acquisition, which in the acquisition of the Olivia Burton brand primarily consist of a trade name and customer relationships. The fair values of these intangible assets are estimated based on independent third-party appraisals. Finite-lived intangible assets are amortized over their respective estimated useful lives and are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. Estimates of fair value for finite-lived intangible assets are primarily determined using discounted cash flows, with consideration of market comparisons and recent transactions. This approach uses significant estimates and assumptions, including projected future cash flows, discount rates and growth rates.

~~Goodwill~~

At the time of acquisition, in accordance with applicable guidance, the Company records all acquired net assets at their estimated fair values. These estimated fair values are based on management’s assessments and independent third-party appraisals. The excess of the purchase consideration over the aggregate estimated fair values of the acquired net assets is recorded as goodwill.

Goodwill is not amortized but will be assessed for impairment at least annually. Under applicable guidance, the Company generally performs its annual goodwill impairment analysis using a qualitative approach to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. If, based on the results of the qualitative assessment, it is concluded that it is more likely than not that the fair value of goodwill is less than its carrying value, a quantitative test is performed. The Company ~~early adopted ASU 2017-04 “Intangibles - Goodwill and Other: Simplifying the Test~~presents net income attributable to Movado Group, Inc. after adjusting for ~~Goodwill Impairment” (see Note 14 – Accounting Changes and Recent Accounting Pronouncements)~~noncontrolling interests, as applicable, per share on a ~~prospective basis~~basic and diluted basis. Basic earnings per share is computed using weighted-average shares outstanding during the ~~second quarter~~period. Diluted earnings per share is computed using the weighted-average number of ~~fiscal 2018 in light~~shares outstanding adjusted for dilutive common stock equivalents.

The number of ~~goodwill in the period, associated with the acquisition of the Olivia Burton brand.~~

The quantitative impairment test is performed to measure the amount of impairment loss, if any. The quantitative impairment test identifies the existence of potential impairment by comparing the fair value of each reporting unit with its carrying value, including goodwill. If a reporting unit’s carrying amount exceeds its fair value, the Company will record an impairment charge, as an operating expense item, based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit.

Determination of the fair value of a reporting unit and the fair value of individual assets and liabilities of a reporting unit is based on management's assessment, including the consideration of independent third-party appraisals when necessary. Furthermore, this determination is subjective in nature and involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge. Estimates of fair value are primarily determined using discounted cash flows, market comparisons, and recent transactions. These approaches use significant estimates and assumptions, including projected future cash flows, discount rates, growth rates, and determination of appropriate market comparisons.

~~NOTE 3 – FAIR VALUE MEASUREMENTS~~

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputsshares used in ~~measuring fair value into three broad levels~~calculating basic and diluted earnings (loss) per share is as ~~follows:~~

~~Level 1 – Quoted prices in active markets for identical assets or liabilities.~~

~~Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.~~

~~Level 3 – Unobservable inputs based on the Company’s assumptions.~~

~~The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis~~follows (in thousands) ~~as of October 31, 2017 and 2016 and January 31, 2017:~~:

Fair Value at October 31, 2017


Balance Sheet Location

Level 1


Level 2


Level 3


Total

Assets:

Available-for-sale securities

Other current assets

$
291

$
—

$
—

$
291

Short-term investment

Other current assets

156

—

—

156

SERP assets - employer

Other non-current assets

1,538

—

—

1,538

SERP assets - employee

Other non-current assets

35,532

—

—

35,532

Hedge derivatives

Other current assets

—

67

—

67

Total

$
37,517

$
67

$
—

$
37,584

Liabilities:

SERP liabilities - employee

Other non-current liabilities

$
35,532

$
—

$
—

$
35,532

Hedge derivatives

Accrued liabilities

—

685

—

685

Total

$
35,532

$
685

$
—

$
36,217


	Three Months Ended April 30,
	2022		2021
Weighted average common shares outstanding:
Basic		22,840		23,320
Effect of dilutive securities:
Stock awards and options to purchase shares of common stock		557		421
Diluted		23,397		23,741

Fair Value at January 31, 2017


Balance Sheet Location

Level 1


Level 2


Level 3


Total

Assets:

Available-for-sale securities

Other current assets

$
309

$
—

$
—

$
309

Short-term investment

Other current assets

154

—

—

154

SERP assets - employer

Other non-current assets

1,091

—

—

1,091

SERP assets - employee

Other non-current assets

30,831

—

—

30,831

Hedge derivatives

Other current assets

—

145

—

145

Total

$
32,385

$
145

$
—

$
32,530

Liabilities:

SERP liabilities - employee

Other non-current liabilities

$
30,831

$
—

$
—

$
30,831

Hedge derivatives

Accrued liabilities

—

211

—

211

Total

$
30,831

$
211

$
—

$
31,042

Fair Value at October 31, 2016


Balance Sheet Location

Level 1


Level 2


Level 3


Total

Assets:

Available-for-sale securities

Other current assets

$
280

$
—

$
—

$
280

Short-term investment

Other current assets

150

—

—

150

SERP assets - employer

Other non-current assets

1,464

—

—

1,464

SERP assets - employee

Other non-current assets

28,495

—

—

28,495

Hedge derivatives

Other current assets

—

141

—

141

Total

$
30,389

$
141

$
—

$
30,530

Liabilities:

SERP liabilities - employee

Other non-current liabilities

$
28,495

$
—

$
—

$
28,495

Hedge derivatives

Accrued liabilities

—

391

—

391

Total

$
28,495

$
391

$
—

$
28,886

The fair values of the Company’s available-for-sale securities are based on quoted prices. The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of a percent calculated annually. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the Company’s liability to the employees in the plan for their vested balances. The hedge derivatives are entered into by the Company principally to reduce its exposure to Swiss franc and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates. The carrying amount of debt approximated fair value as of October 31, 2017.

~~During~~For the three months ended ~~October 31, 2016,~~April 30, 2022 and 2021, approximately 170,000 and536,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

On March 24, 2022, the Company ~~determined~~declared a quarterly cash dividend of $0.35 per share payable on April 20, 2022, to shareholders of record on April 6, 2022. The total dividend of $7.9 million was paid on April 20, 2022. On March 25, 2021, the Company declared a quarterly cash dividend of $0.20 per share payable on April 21, 2021, to shareholders of record on April 7, 2021. The total dividend of $4.6 million was paid on April 21, 2021. In addition, the Company paid a cash dividend on February 5, 2021 in the amount of $2.3 million to shareholders of record on January 21, 2021 of $0.10 per share.

NOTE 5 – INVENTORIES

Inventories consisted of the following (in thousands):


	April 30, 2022		January 31, 2022		April 30, 2021
Finished goods	$	146,655	$	128,119	$	132,418
Component parts		30,896		29,759		33,292
Work-in-process		2,452		2,405		4,256
	$	180,003	$	160,283	$	169,966

The Company has corrected the previously disclosed April 30, 2021 balances of Finished goods and Component parts to increase Finished goods by $8.6 million and reduce Component parts by a corresponding amount.

NOTE 6 – DEBT AND LINES OF CREDIT

On October 12, 2018, the Company, together with Movado Group Delaware Holdings Corporation, Movado Retail Group, Inc. and Movado LLC (together with the Company, the “U.S. Borrowers”), each a wholly owned domestic subsidiary of the Company, and Movado Watch Company S.A. and MGI Luxury Group S.A. (collectively, the “Swiss Borrowers” and, together with the U.S. Borrowers, the “Borrowers”), each a wholly owned Swiss subsidiary of the Company, entered into an Amended and Restated Credit Agreement (as subsequently amended, the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”). The Credit Agreement provides for a $100.0 million senior secured revolving credit facility (the “Facility”) and has a maturity date of October 28, 2026. The Facility includes a $15.0 million letter of credit subfacility, a $25.0 million swingline subfacility and a $75.0 million sublimit for borrowings by the Swiss Borrowers, with provisions for uncommitted increases to the Facility of up to $50.0 million in the aggregate subject to customary terms and conditions. The Credit Agreement contains affirmative and negative covenants binding on the Company and its subsidiaries that ~~an investment~~are customary for credit facilities of this type, including, but not limited to, restrictions and limitations on the incurrence of debt and liens, dispositions of assets, capital expenditures, dividends and other payments in ~~a privately held company experienced an~~respect of equity interests, the making of loans and equity investments, mergers, consolidations, liquidations and dissolutions, and transactions with affiliates (in each case, subject to various exceptions).

The borrowings under the Facility are joint and several obligations of the Borrowers and are also cross-guaranteed by each Borrower, except that the Swiss Borrowers are not liable for, nor do they guarantee, the obligations of the U.S. Borrowers. In addition, the Borrowers’ obligations under the Facility are secured by first priority liens, subject to permitted liens, on substantially all of the U.S. Borrowers’ assets other than ~~temporary impairment~~certain excluded assets. The Swiss Borrowers do not provide collateral to secure the obligations under the Facility.

As of April 30, 2022, and ~~recorded~~April 30, 2021, there was 0 and $10.0 million (0 in Swiss Francs), respectively, in loans outstanding under the Facility. Availability under the Facility was reduced by the aggregate number of letters of credit outstanding, issued in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada, totaling approximately $0.3 million at both April 30, 2022 and April 30, 2021. At April 30, 2022, the letters of credit have expiration dates through May 31, 2022. As of April 30, 2022, and April 30, 2021, availability under the Facility was $99.7 million and $89.7 million, respectively.

The Company had weighted average borrowings under the Facility of 0 and $13.1 million during the three months ended April 30, 2022 and 2021, respectively, with a ~~charge~~weighted average interest rate of ~~$1.3~~3.21% during the three months ended April 30, 2021.

A Swiss subsidiary of the Company maintains unsecured lines of credit with an unspecified maturity with a Swiss bank. As of April 30, 2022, and 2021, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $6.7 million and $7.1 million, respectively. As of April 30, 2022, and 2021, there were 0 borrowings against these lines. As of April 30, 2022 and 2021, 2 European banks had guaranteed obligations to third parties on behalf of 2 of the Company’s foreign subsidiaries in the dollar equivalent of $1.2 million and $1.3million, respectively, in various foreign currencies, of which$0.6 million, in ~~other expenses in the Company’s Consolidated Statements of Operations,~~both periods, was a restricted deposit as it relates to ~~reduce the carrying value to zero in the United States location of the Wholesale segment.~~lease agreements.

~~NOTE 4 – EQUITY~~

~~The components of equity~~Cash paid for interest, including unused commitments fees, was $0.1 million and $0.2 million for the ~~nine months~~three-month periods ended ~~October 31, 2017~~April 30, 2022 and ~~2016 are as follows (in thousands):~~April 30, 2021, respectively.

Movado Group, Inc. Shareholders' Equity

Common
Stock (1)

Class A
Common
Stock (2)

Capital in
Excess of
Par Value

Retained
Earnings

Treasury
Stock

Accumulated
Other
Comprehensive
Income

Noncontrolling
Interests

Total

Balance, January 31, 2017

$
272

$
66

$
185,354

$
415,919

$
(204,398
)

$
76,780

$
—

$
473,993

Net income

18,683

18,683

Dividends

(8,953
)

(8,953
)
Stock repurchase

(3,004
)

(3,004
)
Stock options exercised

1

238

(865
)

(626
)
Supplemental executive
   retirement plan

96

96

Stock-based compensation
   expense

3,644

3,644

Net unrealized loss on
   investments, net of tax benefit
   of $6

(12
)

(12
)
Net change in effective
   portion of hedging contracts,
   net of tax of $9

37

37

Foreign currency translation
   adjustment (3)

3,583

3,583

Balance, October 31, 2017

$
273

$
66

$
189,332

$
425,649

$
(208,267
)

$
80,388

$
—

$
487,441

Common
Stock (1)

Class A
Common
Stock (2)

Capital in
Excess of
Par Value

Retained
Earnings

Treasury
Stock

Accumulated
Other
Comprehensive
Income

Noncontrolling
Interests

Total

Balance, January 31, 2016

$
270

$
66

$
178,118

$
392,788

$
(199,195
)

$
68,505

$
595

$
441,147

Net income

29,829

78

29,907

Dividends

(8,951
)

(8,951
)
Stock repurchase

(3,263
)

(3,263
)
Stock options exercised, net of
   tax of $167

1

(86
)

(1,339
)

(1,424
)
Supplemental executive
   retirement plan

150

150

Stock-based compensation
   expense

5,663

5,663

Net unrealized gain on
   investments, net of
   tax of $1

8

8

Net change in effective
   portion of hedging contracts,
   net of tax of $5

31

31

Joint venture incremental share
   purchase

(1,011
)

(649
)

(1,660
)
Foreign currency translation
   adjustment (3)

8,513

(24
)

8,489

Balance, October 31, 2016

$
271

$
66

$
182,834

$
413,666

$
(203,797
)

$
77,057

$
—

$
470,097

~~(1)~~

~~Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders.~~

~~(2)~~

Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation as amended. The class A common stock is not publicly traded, and consequently, there is currently no established public trading market for these shares.

~~(3)~~

~~The currency translation adjustment is not adjusted for income taxes to the extent that it relates to permanent investments of earnings in international subsidiaries.~~

~~NOTE 5 – SEGMENT AND GEOGRAPHIC INFORMATION~~

~~The Company follows accounting guidance which requires disclosure of segment data based on how management makes decisions about allocating resources to segments and measuring their performance.~~

The Company conducts its business in two operating segments: Wholesale and Retail. The Company’s Wholesale segment includes the designing, manufacturing and distribution of watches of quality owned brands and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Retail segment includes the Company’s retail outlet locations.

The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all non-U.S. Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 35.7%, 8.4%, 6.5% and 4.5%, respectively, of the Company’s total net sales for the three months ended October 31, 2017. For the three months ended October 31, 2016, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 23.5%, 7.3%, 7.2% and 5.4%, respectively, of the Company’s total net sales.

The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 31.7%, 9.4%, 7.8% and 5.2%, respectively, of the Company’s total net sales for the nine months ended October 31, 2017. For the nine months ended October 31, 2016, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 23.1%, 8.4%, 8.4% and 5.9%, respectively, of the Company’s total net sales. Substantially all of the Company’s tangible International assets are located in Switzerland and Hong Kong.

~~Operating Segment Data for the Three Months Ended October 31, 2017 and 2016 (in thousands):~~

Net Sales

2017

2016

Wholesale:

Owned brands category
$
75,138

$
73,749

Licensed brands category

95,015

86,818

After-sales service and all other

2,159

3,522

Total Wholesale

172,312

164,089

Retail

18,381

15,729

Consolidated total
$
190,693

$
179,818

Operating Income (3) (4)

2017

2016

Wholesale
$
22,250

$
28,697

Retail

2,935

2,374

Consolidated total
$
25,185

$
31,071

~~Operating Segment Data for the Nine Months Ended October 31, 2017 and 2016 (in thousands):~~

Net Sales

2017

2016

Wholesale:

Owned brands category
$
154,620

$
162,428

Licensed brands category

208,914

205,229

After-sales service and all other

6,956

9,601

Total Wholesale

370,490

377,258

Retail

48,249

44,709

Consolidated total
$
418,739

$
421,967

Operating Income (3) (4)

2017

2016

Wholesale
$
22,559

$
39,898

Retail

7,295

6,642

Consolidated total
$
29,854

$
46,540

Total Assets

October 31,
2017

January 31,
2017

October 31,
2016

Wholesale
$
633,101

$
584,518

$
600,885

Retail

26,465

23,284

23,593

Consolidated total
$
659,566

$
607,802

$
624,478

~~Geographic Location Data for the Three Months Ended October 31, 2017 and 2016 (in thousands):~~

Net Sales


Operating Income (3) (4)

2017


2016


2017


2016

United States (1)
$
85,685

$
101,854

$
2,971

$
14,626

International (2)

105,008

77,964

22,214

16,445

Consolidated total
$
190,693

$
179,818

$
25,185

$
31,071

~~United States and International net sales are net of intercompany sales of $87.2 million and $75.6 million for the three months ended October 31, 2017 and 2016, respectively.~~

~~Geographic Location Data for the Nine Months Ended October 31, 2017 and 2016 (in thousands):~~

Net Sales


Operating (Loss) / Income (3) (4)

2017


2016


2017


2016

United States (1)
$
192,325

$
228,734

$
(5,409)

$
12,841

International (2)

226,414

193,233

35,263

33,699

Consolidated total
$
418,739

$
421,967

$
29,854

$
46,540

~~United States and International net sales are net of intercompany sales of $211.8 million and $231.5 million for the nine months ended October 31, 2017 and 2016, respectively.~~

~~(1)~~

The United States operating income included $15.8 million and $14.3 million of unallocated corporate expenses for the three months ended October 31, 2017 and 2016, respectively. The United States operating income included $29.2 million and $33.0 million of unallocated corporate expenses for the nine months ended October 31, 2017 and 2016, respectively.

~~(2)~~

The International operating income included $15.7 million and $14.0 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended October 31, 2017 and 2016, respectively. The International operating income included $31.2 million and $30.5 million of certain intercompany profits related to the Company’s supply chain operations for the nine months ended October 31, 2017 and 2016, respectively.

~~(3)~~

In the United States and International locations of the Wholesale segment, for the three months ended October 31, 2017, operating income included a pre-tax charge of $0.1 million and $6.9 million, respectively, as a result of the Company’s cost savings initiatives. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included a pre-tax charge of $3.9 million and $9.5 million, respectively, as a result of the Company’s cost savings initiatives.

~~(4)~~

In the International location of the Wholesale segment, for the three months ended October 31, 2017, operating income included $1.4 million of expenses primarily related to the amortization of acquired assets, as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand.

Total Assets

October 31,
2017


January 31,
2017


October 31,
2016

United States
$
195,659

$
207,246

$
242,881

International

463,907

400,556

381,597

Consolidated total
$
659,566

$
607,802

$
624,478

Property, Plant and Equipment, Net

October 31,
2017

January 31,
2017

October 31,
2016

United States
$
16,762

$
19,197

$
20,307

International

7,875

14,976

14,560

Consolidated total
$
24,637

$
34,173

$
34,867

~~NOTE 6 – INVENTORIES~~

~~Inventories consisted of the following (in thousands):~~

October 31,
2017

January 31,
2017

October 31,
2016

Finished goods
$
129,981

$
112,297

$
122,721

Component parts

37,920

38,482

43,326

Work-in-process

1,965

2,388

3,355

$
169,866

$
153,167

$
169,402

NOTE 7 – ~~DEBT AND LINES OF CREDIT~~DERIVATIVE FINANCIAL INSTRUMENTS

~~On January~~The Company addresses certain financial exposures that include the use of derivative financial instruments. The Company enters into foreign currency forward contracts to reduce the effects of fluctuating foreign currency exchange rates. As of April 30, ~~2015,~~2022, the Company's net forward contracts hedging portfolio designated as qualified cash flow hedging instruments consisted of 38.0 million Euros equivalent with various expiry dates ranging through October 21, 2022. The net gain or loss on the derivatives is reported as a component of accumulated other comprehensive income/(loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings using the same revenue or expense category that the hedged item impacted. The Company ~~together~~also enters into foreign currency forward contracts not designated as qualified hedges in accordance with ~~Movado Group Delaware Holdings Corporation, Movado Retail Group, Inc.~~ASC 815, Derivatives and ~~Movado LLC (collectively,~~Hedging. As of April 30, 2022, the ~~“Borrowers”), each a wholly-owned domestic subsidiary~~Company’s net forward contracts hedging portfolio not designated as qualified hedges consisted of 9.4 million Chinese Yuan equivalent, 36.0 million Swiss Francs equivalent, 21.9 million US dollars equivalent, 15.2 million Euros equivalent and 1.0 million British Pounds equivalent with various expiry dates ranging through October 20, 2022. Changes in the fair value of these derivatives are recognized in earnings in the period they arise. Net gains or losses related to these forward contracts are included in cost of sales, selling and general and administrative expenses in the Consolidated Statements of Operations. The cash flows related to these foreign currency contracts are classified in operating activities.

The following table presents the fair values of the Company, entered into a Credit Agreement (the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”). The Credit Agreement provides for a $100.0 million senior secured revolving credit facility (the “Facility”) including a $15.0 million letter of credit sub-facility that matures on January 30, 2020, with provisions for uncommitted increases of up to $50.0 millionCompany's derivative financial instruments included in the ~~aggregate, subject to customary terms and conditions. In connection with the Credit Agreement, the Borrowers also entered into a Security and Pledge Agreement dated~~consolidated balance sheets as of April 30, 2022, January 31, 2022 and April 30, ~~2015 in favor of the Agent (the “Security Agreement”).~~2021 (in thousands):


	Asset Derivatives							Liability Derivatives
	Balance Sheet Location	April 30, 2022 Fair Value		January 31, 2022 Fair Value		April 30, 2021 Fair Value		Balance Sheet Location	April 30, 2022 Fair Value		January 31, 2022 Fair Value		April 30, 2021 Fair Value
Derivatives designated as hedging instruments:
Foreign Exchange Contracts	Other Current Assets	$	1,761	$	154	$	—	Accrued Liabilities	$	—	$	30	$	—
Total Derivative Instruments		$	1,761	$	154	$	—		$	—	$	30	$	—


	Asset Derivatives							Liability Derivatives
	Balance Sheet Location	April 30, 2022 Fair Value		January 31, 2022 Fair Value		April 30, 2021 Fair Value		Balance Sheet Location	April 30, 2022 Fair Value		January 31, 2022 Fair Value		April 30, 2021 Fair Value
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other Current Assets	$	—	$	43	$	130	Accrued Liabilities	$	1,327	$	140	$	74
Total Derivative Instruments		$	—	$	43	$	130		$	1,327	$	140	$	74

As of ~~October~~April 30, 2022, January 31, ~~2017, $30.0~~2022 and April 30, 2021, the balance of net deferred gains on derivative financial instruments designated as cash flow hedges included in accumulated other comprehensive income were $1.4 million, in loans were drawn under the Facility. Additionally, approximately $0.3 million in letters of credit, which were outstanding under the Borrower’s pre-existing asset-based revolving credit facility that was concurrently terminated when the Credit Agreement became effective, are deemed to be issued and outstanding under the Facility. As of October 31, 2017, availability under the Facility was approximately $69.7 million.

Borrowings under the Facility bear interest at rates selected periodically by the Company at LIBOR plus a spread ranging from 1.25% to 1.75% per annum, based on the Company’s consolidated leverage ratio, or at a base rate plus a spread ranging from 0.25% to 0.75% per annum based on the Company’s consolidated leverage ratio (as defined in the Credit Agreement). At October 31, 2017, the Company’s spreads were 1.25% over LIBOR and 0.25% over the base rate. The Company has also agreed to pay certain fees and expenses and to provide certain indemnities, all of which are customary for such financings.

The borrowings under the Facility are joint and several obligations of the Borrowers and are also cross-guaranteed by each Borrower. In addition, pursuant to the Security Agreement, the Borrowers’ obligations under the Facility are secured by first priority liens, subject to permitted liens, on substantially all of the Borrowers’ assets other than certain excluded assets. The Security Agreement contains representations, warranties and covenants, which are customary for pledge and security agreements of this type, relating to the creation and perfection of security interests in favor of the Agent over various categories of the Borrowers’ assets.

The Credit Agreement contains affirmative and negative covenants binding on the Borrowers and their subsidiaries that are customary for credit facilities of this type, including, but not limited to, restrictions and limitations on the incurrence of debt and liens, dispositions of assets, capital expenditures, dividends and other payments in respect of equity interests, the making of loans and equity investments, mergers, consolidations, liquidations and dissolutions, and transactions with affiliates (in each case, subject to various exceptions).

The Borrowers are also subject to a minimum consolidated EBITDA (as defined in the Credit Agreement) test of $50.0 million, measured at the end of each fiscal quarter based on the four most recent fiscal quarters and a consolidated leverage ratio (as defined in the Credit Agreement) covenant not to exceed 2.50 to 1.00, measured as of the last day of each fiscal quarter. As of October 31, 2017, the Company was in compliance with its covenants under the Credit Agreement.

The Credit Agreement contains events of default that are customary for facilities of this type, including, but not limited to, nonpayment of principal, interest, fees and other amounts when due, failure of any representation or warranty to be true in any material respect when made or deemed made, violation of covenants, cross default with material indebtedness, material judgments, material ERISA liability, bankruptcy events, asserted or actual revocation or invalidity of the loan documents, and change of control.

As of October 31, 2017, the Company classified $5.0 million of the outstanding balance under the Facility as current based on voluntary payments estimated to be made in the next twelve months, with the remainder classified as long-term debt based on the 2020 maturity date of the Facility and the Company’s intent and ability to refinance its obligations thereunder.

As of October 31, 2017, Bank of America, N.A. issued two irrevocable standby letters of credit in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada. As of October 31, 2017, the Company had outstanding letters of credit totaling $0.3 million with expiration dates through May 31, 2018.

A Swiss subsidiary of the Company maintains unsecured lines of credit with an unspecified maturity with a Swiss bank. As of October 31, 2017 and 2016, these lines of credit totaled 6.5 million Swiss francs and 6.5 million Swiss francs with a dollar equivalent of $6.5$0.2 million and $6.4 million, respectively. As of October 31, 2017 and 2016, there were no borrowings against these lines. As of October 31, 2017, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.1 million, in various foreign currencies, of which $0.5 million is a restricted deposit as it relates to lease agreements. As of October 31, 2016, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.2 million in various foreign currencies, of which $0.6 million is a restricted deposit as it relates to lease agreements.

~~NOTE 8 – EARNINGS PER SHARE~~

The Company presents net income per share on a basic and diluted basis. Basic earnings per share are computed using weighted-average shares outstanding during the period. Diluted earnings per share are computed using the weighted-average number of shares outstanding adjusted for dilutive common stock equivalents.

~~The weighted-average number of shares outstanding for basic earnings per share was approximately 23,079,000 and 23,055,000 for the three months ended October 31, 2017 and 2016,~~0, respectively. For the three months ended ~~October 31, 2017 and 2016,~~April 30, 2022, the ~~number~~Company reclassified $0.1 million from accumulated other comprehensive income to Net sales in the Consolidated Statements of shares outstanding for diluted earnings per share increased by approximately 194,000 and 175,000, respectively, due to potentially dilutive common stock equivalents issuable under the Company’s stock compensation plans and SERP.

Operations. For the three months ended ~~October 31, 2017 and 2016, approximately 798,000 and 862,000, respectively, of potentially dilutive common stock equivalents were excluded from~~April 30, 2021, the ~~computation of diluted earnings per share because their effect would~~Company did 0t have any cash flow hedges. NaN ineffectiveness has been ~~antidilutive.~~

~~The weighted-average number of shares outstanding for basic earnings per share was approximately 23,080,000 and 23,074,000~~recorded for the ~~nine~~three months ended ~~October~~April 30, 2022.

See Note 8 - Fair Value Measurements for fair value and presentation in the Consolidated Balance Sheets for derivatives.

NOTE 8 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•

Level 1 – Quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

•

Level 3 – Unobservable inputs based on the Company’s assumptions.

The guidance requires the use of observable market data if such data is available without undue cost and effort.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of April 30, 2022 and 2021 and January 31, ~~2017~~2022 (in thousands):


		Fair Value at April 30, 2022
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	242	$	0	$	0	$	242
Short-term investment	Other current assets		162		0		0		162
SERP assets - employer	Other non-current assets		802		0		0		802
SERP assets - employee	Other non-current assets		44,283		0		0		44,283
Defined benefit plan assets	Other non-current assets		0		0		26,174		26,174
Hedge derivatives	Other current assets		0		1,761		0		1,761
Total		$	45,489	$	1,761	$	26,174	$	73,424
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	44,283	$	0	$	0	$	44,283
Hedge derivatives	Accrued liabilities		0		1,327		0		1,327
Total		$	44,283	$	1,327	$	0	$	45,610


		Fair Value at January 31, 2022
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	249	$	0	$	0	$	249
Short-term investment	Other current assets		164		0		0		164
SERP assets - employer	Other non-current assets		772		0		0		772
SERP assets - employee	Other non-current assets		47,261		0		0		47,261
Defined benefit plan assets	Other non-current assets		0		0		29,096		29,096
Hedge derivatives	Other current assets		0		197		0		197
Total		$	48,446	$	197	$	29,096	$	77,739
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	47,261	$	0	$	0	$	47,261
Hedge derivatives	Accrued liabilities		0		170		0		170
Total		$	47,261	$	170	$	0	$	47,431


		Fair Value at April 30, 2021
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	240	$	0	$	0	$	240
Short-term investment	Other current assets		169		0		0		169
SERP assets - employer	Other non-current assets		740		0		0		740
SERP assets - employee	Other non-current assets		47,346		0		0		47,346
Defined benefit plan assets	Other non-current liabilities		0		0		25,723		25,723
Hedge derivatives	Other current assets		0		130		0		130
Total		$	48,495	$	130	$	25,723	$	74,348
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	47,346	$	0	$	0	$	47,346
Hedge derivatives	Accrued liabilities		0		74		0		74
Total		$	47,346	$	74	$	0	$	47,420

The fair values of the Company’s available-for-sale securities are based on quoted market prices. The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of a percent calculated annually. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and ~~2016, respectively. For~~employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the ~~nine~~Company’s liability to the employees in the plan for their vested balances. The hedge derivatives consist of cash flow hedging instruments and forward contracts (see Note 7 for further discussion) and are entered into by the Company principally to reduce its exposure to Swiss Franc and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates. The carrying amount of debt approximated fair value as of April 30, 2021, due to the availability and floating rate for similar instruments.

The Company sponsors a defined benefit pension plan in Switzerland. The plan covers certain international employees and is based on years of service and compensation on a career-average pay basis. The assets within the plan are classified as a Level 3 asset within the fair value hierarchy and consist of an investment in pooled assets and include separate employee accounts that are invested in equity securities, debt securities and real estate. The values of the separate accounts invested are based on values provided by the administrator of the funds that cannot be readily derived from or corroborated by observable market data. The value of the assets is part of the funded status of the defined benefit plan and included in other non-current assets at April 30, 2022 and January 31, 2022 and other non-current liabilities in the consolidated balance sheets at April 30, 2021.

There were 0 transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

Investments Without Readily Determinable Fair Values

From time to time the Company may make minority investments in growth companies in the consumer products sector and other sectors relevant to its business, including certain of the Company's suppliers and customers, as well as in venture capital funds that invest in companies in media, entertainment, information technology and technology-related fields and in digital assets. During fiscal 2022, the Company invested approximately $2.0 million and during the first quarter of fiscal 2023, the Company invested an additional $1.8 million in venture capital funds (see Note 9 - Commitments and Contingencies for discussion of commitments made related to venture capital funds). The Company will regularly evaluate the carrying value of its investments. There were no adjustments to the original cost value during the three months ended ~~October~~April 30, 2023. The carrying value of the investments are recorded in Other non-current assets in the Consolidated Balance Sheets at April 30, 2022 and January 31, 2017 and 2016, the number of shares outstanding for diluted earnings per share increased by approximately 181,000 and 185,000, respectively, due to potentially dilutive common stock equivalents issuable under the Company’s stock compensation plans and SERP.2022.

For the nine months ended October 31, 2017 and 2016, approximately 803,000 and 790,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

The Company has minimum commitments related to the Company’s license agreements and endorsement agreements with brand ambassadors. The Company sources, distributes, advertises and sells watches and jewelry pursuant to its exclusive license agreements with unaffiliated licensors. Royalty amounts under the license agreements are generally based on a stipulated percentage of revenues, although most of these agreements contain provisions for the payment of minimum annual royalty amounts. The license agreements have various terms, and some have ~~additional~~ renewal options, provided that minimum sales levels are achieved. Additionally, the license agreements require the Company to pay minimum annual advertising amounts.

The Company believes that income tax reserves are adequate; however, amounts asserted by taxing authorities could be greater or less than amounts accrued and reflected in the consolidated balance ~~sheets.~~sheet. Accordingly, the Company could record adjustments to the amounts for federal, state, and foreign liabilities in the future as the Company revises estimates or settles or otherwise resolves the underlying matters. In the ordinary course of business, the Company may take new positions that could increase or decrease unrecognized tax benefits in future periods.

During the second quarter of fiscal 2018, the Company released to cash $1.0 million in restricted cash deposits that were previously recorded in other current assets on the Company’s Consolidated Balance Sheet, related to a certain vendor agreement.

limitations, plus possible penalties and interest. The Company believes that U.S. Customs’ alternative duty methodology and estimate are not consistent with the Company’s facts and circumstances and is disputing U.S. Customs’ position. OnSince February ~~24,~~ 2017, the Company ~~provided~~has been providing U.S. Customs with supplemental analyses and information ~~supporting~~in response to U.S. Customs’ information requests. Most recently, the Company received summonses from U.S. Customs in December 2020 requesting additional information regarding component part costs and the Company’s ~~historical allocation formulas and is~~procedures for allocating the value of imported watches among the component parts. The Company responded to these summonses in ~~the process of providing additional information for U.S. Customs’ review.~~January 2021. Although the Company disagrees with U.S. Customs’ position and believes that the information it has provided supports the reasonableness of its historical allocation formulas, it cannot predict with any certainty the outcome of this matter. The Company intends to continue to work with U.S. Customs to reach a ~~mutually-satisfactory~~mutually satisfactory resolution.

Starting in July 2018, the Trump administration announced a series of lists covering thousands of categories of Chinese origin products subject to potential U.S. special tariffs, including watches. U.S. Customs subsequently issued various rulings regarding, among other things, the application of the special tariffs to China-sourced components of watches containing non-Chinese movements. A U.S. Customs ruling effective August 1, 2021 holds that the special tariff does not apply to China-sourced watch cases that are imported as part of a watch containing a non-Chinese movement. Pending greater clarity on the retroactive effect of this ruling, for the time being the Company continues to maintain an accrual for Chinese watch case imports prior to August 1, 2021.

The acquisition of MVMT Watches, Inc in October 2018, included 2 future contingent payments based on the MVMT brand achieving certain revenue and EBITDA (as defined in the acquisition agreement) targets that combined could total up to $100 million. In connection therewith, the Company had recorded a non-current liability of $16.5 million as of the date of acquisition to reflect the estimated fair value of the contingent purchase price. $14.5 million was allocated to the purchase price and $2.0 million to deferred compensation expense based on future employee service requirements. Based on updated revenue and EBITDA (as defined in the acquisition agreement) performance expectations during the earn-out period for MVMT, the Company remeasured the contingent consideration to 0 at January 31, 2020.

calls in respect of the remaining $17.7 million in such commitments at any time during a period generally ending ten years after the first capital call in respect of a given commitment.

The Company is involved in legal proceedings and claims from time to time, in the ordinary course of its business. Legal reserves are recorded in accordance with the accounting guidance for contingencies. Contingencies are inherently unpredictable and it is possible that results of operations, balance sheets or cash flows could be materially and adversely affected in any particular period by unfavorable developments in, or resolution or disposition of, such matters. For those legal proceedings and claims for which the Company believes that it is probable that a reasonably estimable loss may result, the Company records a reserve for the potential loss. For proceedings and claims where the Company believes it is reasonably possible that a loss may result that is materially in excess of amounts accrued for the matter, the Company either discloses an estimate of such possible loss or range of loss or includes a statement that such an estimate cannot be made. As of ~~October 31, 2017,~~April 30, 2022, the Company is party to legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations beyond the amounts accrued, or cash flows.

NOTE 11 – EQUITY

The ~~effective tax rate~~components of equity for the three ~~and nine~~ months ended ~~October 31, 2017 differs~~April 30, 2022 and 2021 are as follows (in thousands):


			Movado Group, Inc. Shareholders' Equity
	Preferred Stock		Common Stock (1)		Class A Common Stock (2)		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest			Total Movado Group, Inc. Shareholders' Equity			Redeemable Noncontrolling Interest
Balance, January 31, 2022	$	—	$	286	$	65	$	222,615	$	413,587		$	85,295		$	(249,040	)	$	1,967		$	474,775		$	2,311
Net income attributable to Movado Group, Inc.										18,513									622			19,135			119
Dividends ($0.35 per share)										(7,940	)											(7,940	)
Stock options exercised				1				717								(1,123	)					(405	)
Stock repurchase																(14,439	)					(14,439	)
Supplemental executive retirement plan								33														33
Stock-based compensation expense								1,343														1,343
Net unrealized loss on investments, net of tax benefit of ($2)													(5	)								(5	)
Net change in effective portion of hedging contracts, net of tax provision of $243													1,228									1,228
Amortization of prior service cost, net of tax provision of $4													14									14
Foreign currency translation adjustment (3)													(11,500	)					(21	)		(11,521	)		(179	)
Balance, April 30, 2022	$	—	$	287	$	65	$	224,708	$	424,160		$	75,032		$	(264,602	)	$	2,568		$	462,218		$	2,251

	Preferred Stock		Common Stock (1)		Class A Common Stock (2)		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest			Total Movado Group, Inc. Shareholders' Equity			Redeemable Noncontrolling Interest
Balance, January 31, 2021	$	—	$	281	$	65	$	214,043	$	341,641		$	92,540		$	(223,306	)	$	2,070		$	427,334		$	2,600
Net income/(loss) attributable to Movado Group, Inc.										9,409									353			9,762			(11	)
Dividends ($0.20 per share)										(4,642	)											(4,642	)
Stock options exercised				3				266								(1,654	)					(1,385	)
Stock repurchase																(316	)					(316	)
Supplemental executive retirement plan								27														27
Stock-based compensation expense								1,554														1,554
Net unrealized gain on investments, net of tax provision of $14													41									41
Amortization of prior service cost, net of tax provision of $4													14									14
Foreign currency translation adjustment (3)													(3,189	)					20			(3,169	)		(29	)
Balance, April 30, 2021	$	—	$	284	$	65	$	215,890	$	346,408		$	89,406		$	(225,276	)	$	2,443		$	429,220		$	2,560

(1)

Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders.

(2)

Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation, as amended. The class A common stock is not publicly traded, and consequently, there is currently no established public trading market for these shares.

(3)

The currency translation adjustment is not adjusted for income taxes to the extent that it relates to permanent investments of earnings in international subsidiaries.

NOTE 14 – REVENUE

Disaggregation of Revenue

The following table presents the Company’s net sales disaggregated by customer type. Sales and usage-based taxes are excluded from net sales (in thousands):


	For the Three Months Ended April 30,
Customer Type	2022		2021
Wholesale	$	128,617	$	99,403
Direct to consumer		33,748		34,686
After-sales service		1,059		709
Net Sales	$	163,424	$	134,798

The Company’s revenue from contracts with customers is recognized at a point in time. The Company’s net sales disaggregated by geography are based on the location of the Company’s customer (see Note 16 – Segment and Geographic Information).

Wholesale Revenue

The Company’s wholesale revenue consists primarily of revenues from independent distributors, department stores, chain stores, independent jewelry stores and third-party e-commerce retailers. The Company ~~uses forward~~recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied, and control is transferred to the customer. Transfer of control passes to wholesale customers upon shipment or upon receipt depending on the agreement with the customer and shipping terms. Wholesale revenue is measured as the amount of consideration the Company ultimately expects to receive in exchange ~~contracts,~~for transferring goods. Wholesale revenue is included entirely within the Watch and Accessory Brands segment (see Note 16 – Segment and Geographic Information), consistent with how management makes decisions regarding the allocation of resources and performance measurement.

Direct to Consumer Revenue

The Company’s direct to consumer revenue primarily consists of revenues from the Company’s outlet stores, the Company’s owned e-commerce websites and concession stores, and consumer repairs. The Company recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied, and control is transferred to the customer. Control passes to outlet store customers at the time of sale and to substantially all e-commerce upon shipment. Direct to Consumer revenue is included in either the Watch and Accessory Brands segment or Company Stores Segment based on how the Company makes decisions about the allocation of resources and performance measurement. Revenue derived from outlet stores and related e-commerce is included within the Company Stores Segment. Other Direct to Consumer revenue (i.e., revenue derived from other Company-owned e-commerce websites, concession stores and consumer repairs) is included within the Watch and Accessory Brands segment. (See Note 16 – Segment and Geographic Information).

After-Sales Service

All watches sold by the Company come with limited warranties covering the movement against defects in materials and workmanship.

The Company’s after-sales service revenues consists of out of warranty service provided to customers and authorized third party repair centers, and sale of watch parts. The Company recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied and control is transferred to the customer. After-sales service revenue is measured as the amount of consideration the Company ultimately expects to receive in exchange for transferring goods. Revenue from after sales service, including consumer repairs, is included entirely within the Watch and Accessory Brands segment, consistent with how management makes decisions about the allocation of resources and performance measurement.

NOTE 15 – STOCK-BASED COMPENSATION

Under the Company’s Employee Stock Option Plan, as amended and restated as of April 4, 2013 (the “Plan”), the Compensation Committee of the Board of Directors, which ~~do not meet~~consists of three of the ~~requirements~~Company’s non-employee directors, has the authority to grant participants incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights and stock awards, for up to 11,000,000 shares of ~~qualified hedges,~~common stock.

Stock Options:

Stock options granted to ~~offset its exposure~~participants under the plan generally become exercisableafter three years and remain exercisable until the tenth anniversary of the date of grant. All stock options granted under the Plan have an exercise price equal to ~~certain foreign currency receivables and liabilities. These forward contracts are not designated as qualified hedges and, therefore, changes in~~or greater than the fair market value of the Company’s common stock on the grant date.

The table below presents the weighted average assumptions used with the Black-Scholes option-pricing model for the calculation of the fair value of ~~these derivatives are recognized in earnings in~~stock options granted during the ~~period they arise, thereby offsetting the current earnings effect resulting from the revaluation~~three months ended April 30, 2022 and April 30, 2021.


	Three Months Ended April 30, 2022			Three Months Ended April 30, 2021
Expected volatility		51.66	%		51.61	%
Expected life in years		6.0			6.0
Risk-free interest rates		2.57	%		0.89	%
Dividend rate		3.00	%		2.90	%
Weighted average fair value per option at date of grant	$	14.81		$	10.23

The fair value of the ~~related foreign currency receivables~~stock options, less expected forfeitures, is amortized on a straight-line basis over the vesting term. Total compensation expense for stock option grants recognized during the three months ended April 30, 2022 and ~~liabilities.~~

~~All of the Company’s derivative instruments have liquid markets to assess fair value. The Company does not enter into any derivative instruments for trading purposes.~~

2021 was $0.4 million and $0.3 million,respectively. As of ~~October 31, 2017,~~April 30, 2022, there was $4.4 million of unrecognized compensation cost related to unvested stock options. These costs are expected to be recognized over a weighted-average period of 2.3 years. Total cash consideration received for stock option exercises during the ~~Company’s entire net forward contracts hedging portfolio consisted of 23.0~~three months ended April 30, 2022 and 2021 was $0.7 million ~~Swiss francs equivalent, 12.8~~and $0.3 million, ~~Euros equivalent and 11.3 million British Pounds equivalent~~, ~~with various expiry dates ranging through April 10, 2018.~~respectively.

The following table summarizes the Company’s stock options activity during the first quarter of fiscal 2023:


	Outstanding Options			Weighted Average Exercise Price per Option		Option Price Per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value $(000)
Options outstanding at January 31, 2022 (242,959 options exercisable)		982,834		$	21.69	$12.42-$42.12			7.5	$	15,441
Granted		162,053		$	38.04	$	38.04
Exercised		(26,228	)	$	27.41	$23.35-$30.36
Cancelled		0
Options outstanding at April 30, 2022		1,118,659		$	23.93	$12.42-$42.12			7.7	$	14,207
Exercisable at April 30, 2022		216,731		$	31.55				3.2	$	1,355
Expected to vest at April 30, 2022		839,653		$	21.67				8.8	$	12,288

The fair value of stock options exercised during the first quarter of fiscal 2023 was $0.3 million and ~~presentation in~~ the ~~Consolidated Balance Sheets for derivatives (in thousands):~~intrinsic value was $0.3 million.

Asset Derivatives

Liability Derivatives

Balance
Sheet
Location

October 31,
2017
Fair
Value

January 31,
2017
Fair
Value

October 31,
2016
Fair
Value

Balance
Sheet
Location

October 31,
2017
Fair
Value

January 31,
2017
Fair
Value

October 31,
2016
Fair
Value

Derivatives not
   designated as
   hedging
   instruments:

Foreign Exchange
   Contracts
Other Current
Assets

$
—

$
145

$
31

Accrued
Liabilities

$
685

$
211

$
391

Total Derivative
   Instruments

$
—

$
145

$
31

$
685

$
211

$
391

Stock Awards:

Asset Derivatives

Liability Derivatives

Balance
Sheet
Location

October 31,
2017
Fair
Value

January 31,
2017
Fair
Value

October 31,
2016
Fair
Value

Balance
Sheet
Location

October 31,
2017
Fair
Value

January 31,
2017
Fair
Value

October 31,
2016
Fair
Value

Derivatives
   designated as
   hedging
   instruments:

Foreign Exchange
   Contracts
Other Current
Assets

$
67

$
—

$
110

Accrued
Liabilities

$
—

$
—

$
—

Total Derivative
   Instruments

$
67

$
—

$
110

$
—

$
—

$
—

~~As of October 31, 2017 and 2016,~~Under the balance of deferred net gains on derivative financial instruments documented as cash flow hedges included in accumulated other comprehensive income (“AOCI”) were immaterial for both periods. The maximum length of timePlan, the Company ~~hedges its exposure~~can also grant stock awards to ~~the fluctuation in future cash flows for forecasted transactions is 24 months.~~employees and directors. For the three months ended ~~October 31, 2017,~~April 30, 2022 and 2021, compensation expense for stock awards was $0.9 millionand $1.3 million, respectively. As of April 30, 2022, there was $5.9 million of unrecognized compensation cost related to unvested stock awards. These costs are expected to be recognized over a weighted-average period of 2.3 years.

The following table summarizes the Company’s stock awards activity during the first quarter of fiscal 2023:


	Number of Stock Award Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value $(000's)
Units outstanding at January 31, 2022		296,283		$	26.39
Units granted		112,767		$	38.04
Units vested		(111,584	)	$	31.84
Units forfeited		0		$	0
Units outstanding at April 30, 2022		297,466		$	28.76	2.5	$	10,700

Outstanding stock awards can be classified as either time-based stock awards or performance-based stock awards. Time-based stock awards vest over time subject to continued employment. Performance-based stock awards vest over time subject both to continued employment and to the achievement of corporate financial performance goals. Upon the vesting of a stock award, shares are issued from the pool of authorized shares. The number of shares issued related to the performance-based stock awards historically awarded by the Company ~~reclassified~~have typically varied from ~~AOCI~~0% to ~~earnings $0.4~~150% of the target number of underlying stock award units, depending on the extent of the achievement of predetermined financial goals. There were 28,405 and 54,720 shares of common stock of the Company tendered by the employee for the payment of the employee's withholding tax obligation totaling $1.1 million ~~of net loss, net of tax benefit of $0.1 million. For~~and $1.7 million for the ~~nine~~three months ended ~~October 31, 2017,~~April 30, 2022 and 2021, respectively. The total fair value of stock award units that vested during the ~~Company reclassified from AOCI~~first three months of fiscal 2023 was $3.6 million. The number of shares issued related to ~~earnings $0.9 million of net loss, net of tax benefit of $0.2 million. For~~ the ~~three and nine months ended October 31, 2016, the Company reclassified amounts from AOCI to earnings that were immaterial for both periods.~~ remaining stock awards are established at grant date.

NOTE 16 – SEGMENT AND GEOGRAPHIC INFORMATION

~~NOTE 12- ACCUMULATED OTHER COMPREHENSIVE INCOME~~

The ~~components~~Company conducts its business in 2 operating segments: Watch and Accessory Brands and Company Stores. The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of ~~accumulated~~watches and, to a lesser extent, jewelry and other ~~comprehensive income consisted~~accessories, of owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Company Stores segment includes the ~~following (in thousands):~~

Currency
Translation
Adjustments


Available-for-sale securities


Hedging
Contracts


Total

Balance, January 31, 2017
$
76,569

$
197

$
14

$
76,780

Other comprehensive income / (loss) before
   reclassifications

3,583

(12
)

931

4,502

Amounts reclassified from accumulated other
   comprehensive income (1)

—

—

(894
)

(894)

Net current-period other comprehensive income / (loss)

3,583

(12
)

37

3,608

As of October 31, 2017
$
80,152

$
185

$
51

$
80,388

Currency
Translation
Adjustments


Available-for-sale securities


Hedging
Contracts


Total

Balance, January 31, 2016
$
68,265

$
189

$
51

$
68,505

Other comprehensive income / (loss) before
   reclassifications

8,513

8

(15
)

8,506

Amounts reclassified from accumulated other
   comprehensive loss (1)

—

—

46

46

Net current-period other comprehensive income

8,513

8

31

8,552

As of October 31, 2016
$
76,778

$
197

$
82

$
77,057

~~(1)~~

~~Amounts reclassified to earnings in the Consolidated Statements~~Company’s retail outlet business. The Chief Executive Officer of ~~Operations.~~

~~NOTE 13 – TREASURY STOCK~~

~~On August 29, 2017, the Board approved a share repurchase program under which~~ the Company is ~~authorized~~the chief operating decision maker (“CODM”) and regularly reviews operating results for each of the 2 operating segments to ~~purchase up to $50.0 million~~assess performance and makes operating decisions about the allocation of ~~its outstanding common stock from time to time, depending on market conditions, share price and other factors.~~ the Company’s resources.

The Company ~~may purchase shares~~divides its business into 2 major geographic locations: United States operations and International, which includes the results of ~~its common stock through open market purchases, repurchase plans, block trades or otherwise. This authorization expires on August 29, 2020.~~

~~On March 31, 2016, the Board approved a share repurchase program under which the~~all non-U.S. Company ~~was authorized to purchase up to $50.0 million~~operations. The allocation of its outstanding common stock from time to time, depending on market conditions, share price and other factors. This program authorized the Company to purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. As of August 29, 2017, this program was canceled and a new share repurchase program was simultaneously approved. During the nine months ended October 31, 2017, under both the new and previously authorized repurchase plans, the Company repurchased a total of 120,507 shares of its common stock at a total cost of approximately $3.0 million or an average cost of $24.93 per share, which included 20,000 shares repurchased from the Movado Group Foundation at a total cost of approximately $0.5 million or $22.90 average per share. During the nine months ended October 31, 2016, under the previously authorized repurchase plan, the Company repurchased a total of 137,499 shares of its common stock at a total cost of approximately $3.3 million or an average cost of $23.73 per share, which included 15,000 shares repurchased from the Movado Group Foundation at a total cost of approximately $0.4 million or $27.67 average per share.

There were 36,843 and 47,310 shares of common stock repurchased during the nine months ended October 31, 2017 and 2016, respectively, as a result of the surrender of shares in connection with the vesting of certain stock awards. At the election of an employee, shares having an aggregate value on the vesting date equal to the employee’s withholding tax obligation may be surrendered to the Company to fund the payment of such taxes.

~~NOTE 14 – ACCOUNTING CHANGES AND RECENT ACCOUNTING PRONOUNCEMENTS~~

On January 26, 2017, FASB issued ASU 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value when calculating goodwill, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to begeographic revenue is based upon the ~~results of step one~~location of the ~~impairment test, which evaluates~~customer. The Company’s International operations in Europe, the ~~extent, if any, by which~~Middle East, the ~~carrying value of a reporting unit exceeds its fair value, with any resulting impairment not exceeding~~Americas (excluding the carrying amount of goodwill. The Company early adopted ASU 2017-04 on a prospective basis during the second quarter of fiscal 2018 in light of goodwill in the period, associated with the acquisition of the Olivia Burton brand (see Note 17 – Acquisitions). If the Company's goodwill becomes impaired, the adoption of ASU 2017-04 could make the impairment recorded materially different from what would have been recorded under the previous standard.

On January 5, 2017, FASB issued ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business,” which clarifies the definition of a business. The objective of this ASU is to assist entities in determining whether transactions should beUnited States) and Asia accounted for as acquisitions (or disposals) of assets or businesses. The Company early adopted ASU 2017-01 on a prospective basis during the second quarter of fiscal 2018, in connection with the acquisition of the Olivia Burton brand (see Note 17 – Acquisitions). The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial position.

On March 30, 2016, FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which amends the accounting for certain aspects of share-based payments to employees. The new guidance requires, among its other provisions, that excess tax benefits (which represent the excess of actual tax benefits received at the date of vesting or settlement over the benefits recognized over the vesting period or upon issuance of share-based payments)34.0%, 10.1%, 8.4% and tax deficiencies (which represent the amount by which actual tax benefits received at the date of vesting or settlement is lower than the benefits recognized over the vesting period or upon issuance of share-based payments) be recorded in the income statement as an increase or decrease in income taxes when the awards vest or are settled. This is in comparison to the prior requirement that these excess tax benefits be recognized in additional paid-in capital and these tax deficiencies be recognized either as an offset to accumulated excess tax benefits, if any, or in the income statement. The new guidance also requires excess tax benefits to be classified along with other income tax cash flows as an operating activity in the statement of cash flows rather than, as previously required, a financing activity. The Company adopted the provisions of ASU 2016-09 during the first quarter of fiscal 2018. The Company applied the change in the presentation on the cash flow statement retrospectively, which did not have a material impact on the Company’s consolidated financial statements. In addition, the guidance allows for a policy election to account for forfeitures as they occur, however, the Company continues to apply its policy of estimating forfeiture rates.

On August 28, 2017, FASB issued ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” which expands an entity’s ability to apply hedge accounting for nonfinancial and financial risk components and allows for a simplified approach for fair value hedging of interest rate risk. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The new guidance also simplifies the hedge documentation and effectiveness assessment requirements. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, with early adoption permitted. The new standard must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company is evaluating the impact of the adoption of this guidance on the Company’s consolidated financial statements.

On February 25, 2016, FASB issued ASU 2016-02, “Leases,” which requires lessees to recognize most leases on the balance sheet. This change is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures and will result in a material increase to the company’s total assets and liabilities through recognition of right-of-use assets and related lease liabilities. The Company is analyzing the impact of the adoption of this guidance on the Company’s consolidated financial statements, including assessing changes that might be necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting.

On May 28, 2014, FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This pronouncement affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, FASB deferred the effective date of the guidance. The new revenue standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and allows either a full retrospective adoption to all periods presented or a modified retrospective adoption approach with the cumulative effect of initial application of the revised guidance recognized at the date of initial application. Early adoption is permitted for periods beginning after December 15, 2016. On March 30, 2016, FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Principal versus Agent Considerations),” to clarify the implementation guidance on principal versus agent considerations. On April 14, 2016, FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Identifying Performance Obligations and Licensing),” to clarify the implementation guidance on identifying performance obligations and accounting for licenses of intellectual property. On May 9, 2016, FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Narrow-Scope Improvements and Practical Expedients),” to clarify the implementation guidance on assessing collectability, presentation of sales taxes, noncash consideration and completed contracts and contract modifications at transition. The Company is assessing the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences, if any, that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. The Company has elected to adopt the new standard under the Modified Retrospective approach and is considering whether it will apply certain of the practical expedients available under the new standard. The Company will continue evaluating the impact, if any, on changes to its business processes, systems and controls to support recognition and disclosure under the new guidance. The Company expects to adopt the new guidance in the beginning of fiscal 2019.

~~NOTE 15 – OPERATING EFFICIENCY INITIATIVES AND OTHER ITEMS~~

In fiscal 2016, the Company commenced an initiative to achieve greater operating efficiencies and streamline its operations, primarily at certain of its foreign subsidiaries. The Company recorded a total of $4.0 million of pre-tax expenses during fiscal 2016 and substantially completed the actions under the initiative as of January 31, 2016.

~~A summary rollforward of costs related to the operating efficiency initiatives and other items is as follows (in thousands):~~

Balance at
January 31, 2017

Cash
payments

Foreign
exchange

Accrued
balance at
October 31, 2017
Severance
$
78

$
(1
)

$
1

$
78
Occupancy charges

330

(99
)

2

233
Total
$
408

$
(100
)

$
3

$
311

~~NOTE 16 – COST SAVINGS INITIATIVES~~

As a result of actions taken by the Company in the first quarter of fiscal 2018 to better align its global infrastructure with the current business environment by consolidating certain operations and streamlining functions to reduce costs and improve profitability, the Company recorded $6.3 million of pre-tax expenses primarily for severance and payroll related, other and occupancy charges, predominantly impacting the Company’s North American and Swiss operations. The Company recorded an additional $0.1 million of pre-tax expenses in the second quarter of fiscal 2018 related to Other. In light of the changing retail landscape and the growing importance of digital marketing and online sales, the Company also decided in the third quarter of fiscal 2018, to cease its participation in the Baselworld Watch and Jewelry Show. As a result, the Company recorded charges for the write-off of certain fixed assets and other contract termination costs. The Company also wrote-off certain fixed assets related to the reduction of leased space in the Company’s Swiss operations. In the third quarter of fiscal 2018, the Company recorded an additional $7.0 million of pre-tax expenses related to fixed assets, severance and payroll related and other. The Company expects the cost savings initiatives to be substantially completed by the end of fiscal 2018.

~~A summary roll forward of costs related to the cost savings initiatives is as follows (in thousands):~~

Fiscal 2018
Charges (2)

Cash
payments

Non-cash
adjustments

Foreign
exchange

Balance in
Accrued Liabilities at
October 31, 2017
Severance and payroll related (1)
$
6,061

$
(5,276
)

$
(401
)

$
67

$
451
Fixed assets (1)

5,105

—

(5,105
)

—

—
Other (1)

2,172

(73
)

(71
)

(6
)

2,022
Occupancy charges (1)

99

(22
)

—

6

83
Total
$
13,437

$
(5,371
)

$
(5,577
)

$
67

$
2,556

~~(1)~~

The total severance and payroll related charges of $0.1 million, fixed assets charges of $5.1 million and other charges of $1.8 million are included in SG&A in the Consolidated Statement of Operations for the three months ended October 31, 2017. The total severance and payroll related charges of $6.1 million include $4.7 million in SG&A and $1.4 million in Cost of Sales in the Consolidated Statement of Operations for the nine months ended October 31, 2017. The fixed assets charges of $5.1 million, other charges of $2.2 million and occupancy charges of $0.1 million are included in SG&A in the Consolidated Statement of Operations for the nine months ended October 31, 2017.

~~(2)~~

The United States and International locations of the Wholesale segment include a pre-tax charge of $0.1 million and $6.9 million, respectively, for the three months ended October 31, 2017. The United States and International locations of the Wholesale segment include a pre-tax charge of $3.9 million and $9.5 million, respectively, for the nine months ended October 31, 2017.

~~NOTE 17 – ACQUISITIONS~~

~~On July 3, 2017, the Company, through a wholly-owned U.K. subsidiary, acquired JLB Brands Ltd.~~4.5%, the owner of the Olivia Burton brand, one of the United Kingdom’s fastest growing fashion watch and jewelry brands, for $78.2 million, or £60.0 million in cash, subject to working capital and other closing adjustments. After giving effect to the closing adjustments, the purchase price was $79.0 million, or £60.7 million, net of cash acquired of approximately $5.9 million, or £4.5 million. The acquisition was funded with cash on handrespectively, of the Company’s ~~non-U.S. subsidiaries, and no debt was assumed in the acquisition. The acquisition adds a new brand with significant global growth potential to the Company’s portfolio.~~

The results of the Olivia Burton brand’s operations have been included in the consolidated financial statements since the date of acquisition within the International location of the Wholesale segment. In the International location of the Wholesale segment,total net sales for the three months ended ~~October 31, 2017,~~April 30, 2022. For the three months ended April 30, 2021, the Company’s International operations in Europe, the Middle East, the Americas (excluding the United States) and Asia accounted for 28.9%, 8.5%, 8.5% and 5.2%, respectively, of the Company’s total net sales.

Operating Segment Data as of and for the Three Months Ended April 30, 2022 and 2021 (in thousands):


	Net Sales
	2022		2021
Watch and Accessory Brands:
Owned brands category	$	53,170	$	48,371
Licensed brands category		88,840		67,626
After-sales service and all other		1,358		282
Total Watch and Accessory Brands		143,368		116,279
Company Stores		20,056		18,519
Consolidated total	$	163,424	$	134,798


	Operating Income (3)
	2022		2021
Watch and Accessory Brands	$	21,547	$	8,785
Company Stores		3,747		4,471
Consolidated total	$	25,294	$	13,256


	Total Assets
	April 30, 2022		January 31, 2022		April 30, 2021
Watch and Accessory Brands	$	670,531	$	701,986	$	636,755
Company Stores		69,453		59,174		57,951
Consolidated total	$	739,984	$	761,160	$	694,706

Geographic Location Data as of and for the Three Months Ended April 30, 2022 and 2021 (in thousands):


	Net Sales				Operating Income (3)
	2022		2021		2022		2021
United States (1)	$	70,223	$	65,893	$	548	$	759
International (2)		93,201		68,905		24,746		12,497
Consolidated total	$	163,424	$	134,798	$	25,294	$	13,256

United States and International net sales are net of intercompany sales of $96.2 million and $69.7 million for the three months ended April 30, 2022 and 2021, respectively.

(1)

The United States operating income included ~~$1.4~~$13.5 million and $8.9 million of unallocated corporate expenses ~~primarily~~for the three months ended April 30, 2022 and 2021, respectively.

(2)

The International operating income included $19.1 million and $13.9 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended April 30, 2022 and 2021, respectively.

(3)

For both the three months ended April 30, 2022 and 2021, in the United States locations of the Watch and Accessory Brands segment, operating income included a charge of $0.1 million of expenses related to the amortization of intangible assets and deferred compensation associated with the MVMT brand. In addition, in the International locations of the Watch and Accessory Brands segment for both the three months ended April 30, 2022 and 2021, operating income included a charge of $0.7 million of expenses related to the amortization of acquired intangible assets as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand.


	Total Assets
	April 30, 2022		January 31, 2022		April 30, 2021
United States	$	314,738	$	352,806	$	345,094
International		425,246		408,354		349,612
Consolidated total	$	739,984	$	761,160	$	694,706

The acquisition was accounted for in accordance with FASB Topic ASC 805 (“Business Combinations”), which requires that the total cost of an acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition.


	Property, Plant and Equipment, Net
	April 30, 2022		January 31, 2022		April 30, 2021
United States	$	12,876	$	13,246	$	13,778
International		5,558		6,224		6,821
Consolidated total	$	18,434	$	19,470	$	20,599

~~The following table summarizes the fair value of the assets acquired and liabilities assumed as of the July 3, 2017 acquisition date (in thousands):~~

Assets Acquired and Liabilities Assumed

Fair Value
Cash and cash equivalents

$
5,909
Trade receivables, net

3,106
Inventories

4,164
Prepaid expenses and other current assets

913
Property, plant and equipment, net

131
Goodwill

55,322
Trade name and other intangibles

21,415
Total assets acquired

90,960
Accounts payable

608
Accrued liabilities

844
Income taxes payable

643
Deferred and non-current income taxes payable

3,965
Total liabilities assumed

6,060
Total purchase price

$
84,900

Inventories include a step-up adjustment of approximately $0.8 million, which was expensed over the sell-through cycle of three months. The components of Trade name and other intangibles include a trade name of approximately $12.8 million (amortized over 10 years), and customer relationships of $8.6 million (amortized over 6 years).

~~The Company recorded goodwill of $55.3 million based on the amount by which the purchase price exceeded the fair value of the net assets acquired. Goodwill is not deductible for income tax purposes.~~

The operating results of the Olivia Burton brand have been included in the Company’s Consolidated Financial Statements beginning July 3, 2017. Net sales of the acquired Olivia Burton brand since the date of acquisition through October 31, 2017 were $12.1 million. The Olivia Burton brand’s operating income since the date of acquisition was $4.4 million, which excludes unallocated corporate expenses and expenses incurred in non-UK geographies to support the brand.

The following table provides the Company’s unaudited pro forma net sales, net income and net income per basic and diluted common share as if the results of operations of the Olivia Burton brand had been included in the Company’s operations commencing on February 1, 2016, based on available information relating to operations of the Olivia Burton brand. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the Olivia Burton brand acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results.

Three Months Ended
October 31,

Nine Months Ended
October 31,

2017

2016

2017

2016
(In thousands, except per share data)

(Unaudited)

(Unaudited)
Net sales

$
190,693

$
184,749

$
430,002

$
432,885
Net income

$
18,479

$
21,146

$
24,885

$
30,814

Basic income per share:

Net income per share attributed to Movado Group, Inc.

$
0.80

$
0.92

$
1.08

$
1.34

Diluted income per share:

Net income per share attributed to Movado Group, Inc.

$
0.79

$
0.91

$
1.07

$
1.32

~~The change in the carrying amount of the Company’s goodwill, which is included in the International location of the Wholesale segment, is as follows (in thousands):~~

Total
Balance at January 31, 2017

$
—
Acquisition of the Olivia Burton brand

55,322
Foreign exchange impact

994
Balance at October 31, 2017

$
56,316

~~Trade name and other intangible assets consist of the following (in thousands):~~

As of

October 31, 2017

Gross carrying
amount

Accumulated
amortization

Foreign
exchange

Net
Intangible assets subject to amortization:

Trade name

$
12,766

$
(433)

$
251

$
12,584
Customer relationships

8,598

(486)

168

8,280
Total intangible assets

$
21,364

$
(919)

$
419

$
20,864

Estimated amortization expense for the next five years is: $0.7 million for the remaining three months of fiscal 2018, $2.7 million in fiscal years 2019, through 2023 and $6.3 million in total in the years thereafter.

~~NOTE 18 – NET INCOME ATTRIBUTED TO MOVADO GROUP, INC. AND TRANSFERS TO NONCONTROLLING INTEREST~~

~~The following table summarizes the change from net income attributed to Movado Group, Inc. and transfers to noncontrolling interest (in thousands):~~

Three Months Ended October 31,

Nine Months Ended October 31,

2017

2016

2017

2016

Net income attributed to Movado Group, Inc.
$
17,360

$
20,215

$
18,683

$
29,829

Transfers to the noncontrolling interest

Decrease in Movado Group, Inc.’s paid in capital for
   purchase of 10% of MGS common shares

—

(1,011
)

—

(1,011
)
Net transfers to noncontrolling interest

—

(1,011
)

—

(1,011
)
Change from net income attributed to Movado Group, Inc. and
   transfers to noncontrolling interest
$

17,360

$
19,204

$
18,683


$
28,818

On August 4, 2016, Movado Group, Inc. and Majorelle Limited, an English company (“Majorelle”), voluntarily terminated the joint venture agreement they had entered into on January 30, 2013 (the “JV Agreement”) relating to MGS Distribution Limited, an English company (“MGS”). Under the JV Agreement, the Company and Majorelle owned 90% and 10%, respectively, of the issued and outstanding shares of MGS which was formed to distribute the Company’s licensed watch brands in the United Kingdom. The mutual agreement to terminate the JV Agreement was the result of the Company acquiring the remaining shares in MGS from Majorelle, for the purchase price of $1.7 million, thereby increasing its ownership interest in MGS to 100%. Since August 4, 2016, the Company has accounted for MGS (renamed Movado Group UK Limited in September 2017) as a wholly-owned entity.

~~NOTE 19 – SUBSEQUENT EVENT~~

On November 6, 2017, the Company announced that it and MGI Luxury Group S.A., a wholly-owned subsidiary of the Company, had entered into an agreement with Hugo Boss Trade Mark Management GmbH & Co. KG pursuant to which the expiration of the existing license agreement for the Hugo Boss brand was extended through December 31, 2023. The agreement also amends certain provisions including minimum sales commitments, royalty rates, marketing and advertising expenditures and other Company obligations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Statements in this Quarterly Report on Form 10-Q, including, without limitation, statements under Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report, as well as statements in future filings by the Company with the Securities and Exchange Commission (the “SEC”), in the Company’s press releases and oral statements made by or with the approval of an authorized executive officer of the Company, which are not historical in nature, are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, forecasts and projections about the Company, its future performance, the industry in which the Company operates and management’s assumptions. Words such as “expects”, “anticipates”, “targets”, “goals”, “projects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “will”, “should” and variations of such words and similar expressions are also intended to identify such forward-looking statements. The Company cautions readers that forward-looking statements include, without limitation, those relating to the Company’s future business prospects, projected operating or financial results, revenues, working capital, liquidity, capital needs, inventory levels, plans for future operations, expectations regarding capital expenditures, operating efficiency initiatives and other items, cost savings initiatives, and operating expenses, effective tax rates, margins, interest costs, and income as well as assumptions relating to the foregoing. Forward-looking statements are subject to certain risks and uncertainties, some of which cannot be predicted or quantified. Actual results and future events could differ materially from those indicated in the forward-looking statements, due to several important factors herein identified, among others, and other risks and factors identified from time to time in the Company’s reports filed with the SEC, including, without limitation, the following: 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,~~sold; uncertainty regarding such economic and business conditions, including inflation, increased commodity prices and tightness in the labor market; trends in consumer debt levels and bad debt ~~write-offs,~~write-offs; general uncertainty related to possible terrorist attacks, natural disasters and pandemics, including the ~~stability~~effect of the ~~European Union (including~~COVID-19 pandemic and other diseases on travel and traffic in the Company’s retail stores and the stores of its wholesale customers; supply disruptions, delivery delays and increased shipping costs; adverse impact on the Company’s wholesale customers and customer traffic in the Company’s stores as a result of increased uncertainty and economic disruption caused by the COVID-19 pandemic; the impact of international hostilities, including the ~~June 23, 2016 referendum advising that~~Russian invasion of Ukraine, on global markets, economies and consumer spending, on energy and shipping costs and on the ~~United Kingdom exit from the European Union)~~Company's supply chain and suppliers; defaults on or downgrades of sovereign debt and the impact of any of those events on consumer ~~spending,~~spending; changes in consumer preferences and popularity of particular designs, new product development and ~~introduction,~~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, including price increases to offset increased costs; the impact of “smart” watches and other wearable tech products on the traditional watch ~~market, seasonality,~~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,~~orders; the loss of or curtailed sales to significant ~~customers,~~customers; the Company’s dependence on key employees and ~~officers,~~officers; the ability to successfully integrate the operations of acquired businesses ~~(including the Olivia Burton brand)~~ without disruption to other business ~~activities,~~activities; the possible impairment of acquired intangible ~~assets including goodwill if~~assets; risks associated with the ~~carrying value of any reporting unit were to exceed its fair value,~~Company's minority investments in early-stage growth companies and venture capital funds that invest in such companies; the continuation of the ~~company’s~~Company’s major warehouse and distribution ~~centers,~~centers; the continuation of licensing arrangements with third ~~parties,~~parties; losses possible from pending or future litigation and administrative proceedings; the ability to secure and protect trademarks, patents and other intellectual property ~~rights,~~rights; the ability to lease new stores on suitable terms in desired markets and to complete construction on a timely ~~basis,~~basis; the ability of the Company to successfully manage its expenses on a continuing ~~basis,~~basis; information systems failure or breaches of network ~~security,~~security; complex and quickly-evolving regulations regarding privacy and data protection; the continued availability to the Company of financing and credit on favorable ~~terms,~~terms; business ~~disruptions, disease,~~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.

These risks and uncertainties, along with the risk factors discussed under Item 1A. “Risk Factors” in the Company’s ~~2017~~2022 Annual Report on Form 10-K, should be considered in evaluating any forward-looking statements contained in this report or incorporated by reference herein. All forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are qualified by the cautionary statements in this section. The Company undertakes no obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report.

Critical Accounting Policies and Estimates

The ~~preparation of financial statements~~Company’s Consolidated Financial Statements have been prepared in ~~conformity~~accordance with accounting principles generally accepted ~~accounting principles~~ in the United States ~~requires~~and those significant policies are more fully described in Note 1 to the Company’s consolidated financial statements and contained in the Company's 2022 Annual Report on Form 10-K and are incorporated by reference herein. The preparation of these financial statements and the application of certain critical accounting policies require management to make judgments based on estimates and assumptions that affect the ~~reported amounts~~information reported. On an on-going basis, management evaluates its estimates and judgments, including those related to sales discounts and markdowns, product returns, bad debt, inventories, income taxes, warranty obligations, useful lives of property, plant and equipment, impairments, stock-based compensation and contingencies and litigation. Management bases its estimates and judgments about the carrying values of assets and liabilities that are not readily apparent from other sources on historical experience, contractual commitments and ~~disclosure of contingent assets and liabilities at~~on various other factors that are believed to be reasonable under the dates of the consolidated financial statements. These estimates and assumptions also affect the reported amounts of revenues and expenses. Estimates by their nature are based on judgments and available information. Therefore, actualcircumstances. Actual results could ~~materially~~ differ from ~~those estimates under different assumptions and conditions.~~these estimates.

Critical accounting policies are those that are most important to the portrayal of the Company’s financial condition and the results of operations and require management’s most difficult, subjective and complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. The ~~Company’s~~Company's most critical accounting policies have been discussed in the ~~Company’s 2017~~Company's 2022 Annual Report on Form 10-K and are incorporated by reference herein.

~~See Note 2 – Changes~~ As of April 30, 2022, there have been no material changes to ~~Critical Accounting Policies for updates to the critical accounting policies disclosed in the Company’s 2017 Annual Report on Form 10-K.~~

~~Recent Developments~~

~~On November 21, 2017, the Board of Directors approved the payment of a cash dividend in the amount of $0.13 for each share~~any of the Company’s outstanding common stock and class A common stock. The dividend will be paid on December 15, 2017 to all shareholders of record as of the close of business on December 1, 2017. The decision of whether to declare any future cash dividend, including the amount of any such dividend and the establishment of record and payment dates, will be determined, in each quarter, by the Board, in its sole discretion.critical accounting policies.

On October 24, 2017, the Company entered into an amendment to its lease agreement dated December 21, 2000 (as previously amended, the “Lease”) with Mack-Cali Realty L.P. (“Lessor”) pursuant to which the Company leases its corporate headquarters from Lessor at 650 From Road, Paramus, New Jersey. The amendment extends the term of the Lease through June 30, 2030, and provides the Company with an option to renew the term of the Lease for one additional extension period of five years through June 30, 2035.

~~On August 29, 2017, the Board of Directors approved the payment of a cash dividend in the amount of $0.13 for each share of the Company’s outstanding common stock and class A common stock.~~

On August 29, 2017, the Board of Directors approved a share repurchase program under which the Company is authorized to purchase up to $50.0 million of its outstanding common stock from time to time, depending on market conditions, share price and other factors. The Company may purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. This authorization expires on August 29, 2020. Concurrent with this approval, the Board of Directors cancelled the previously authorized $50 million share buyback program which would have expired on September 30, 2017.

On July 3, 2017, the Company, through a wholly-owned U.K. subsidiary, acquired JLB Brands Ltd., the owner of the Olivia Burton brand, one of the United Kingdom’s fastest growing fashion watch and jewelry brands, for $78.2 million, or £60.0 million in cash, subject to working capital and other closing adjustments. After giving effect to the closing adjustments, the purchase price was $79.0 million, or £60.7 million, net of cash acquired of approximately $5.9 million, or £4.5 million. The acquisition was funded with cash on hand of the Company’s non-U.S. subsidiaries, and no debt was assumed in the acquisition. The acquisition adds a new brand with significant global growth potential to the Company’s portfolio. The results of the Olivia Burton brand’s operations have been included in the consolidated financial statements since the date of acquisition within the International location of the Wholesale segment.

~~On May 25, 2017, the Board of Directors approved the payment of a cash dividend in the amount of $0.13 for each share of the Company’s outstanding common stock and class A common stock.~~

On March 20, 2017, the Company announced cost savings initiatives to better align its global infrastructure with the current business environment by consolidating certain operations and streamlining functions to reduce costs and improve profitability. The cost savings initiatives include a reduction in the Company’s workforce in its North American and Swiss operations as well as charges for fixed assets, occupancy, and other expenses. In light of the changing retail landscape and the growing importance of digital marketing and online sales, the Company also decided in the third quarter of fiscal 2018, to cease its participation in the Baselworld Watch and Jewelry Show. As a result, the Company recorded charges for the write-off of certain fixed assets and other contract termination costs. The Company expects these actions to yield approximately $12.0 million of pre-tax savings in fiscal 2018, which will be reinvested in marketing and other areas of its operations. For the nine months ended October 31, 2017, the Company recorded a total of $13.4 million of pre-tax expenses in connection with these actions and expects the cost savings initiatives to be substantially completed by the end of fiscal 2018.

~~Overview~~

The Company conducts its business ~~primarily~~ in two operating segments: ~~Wholesale~~Watch and ~~Retail.~~Accessory Brands and Company Stores. The Company’s ~~Wholesale~~Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, of ~~quality~~ owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The ~~Retail~~Company Stores segment includes the Company’s retail outlet ~~locations.~~business in the United States and Canada. The Company also operates in two major geographic locations: United States ~~operations~~ and International, the latter of which includes the results of all non-U.S. Company operations.

~~As of July 31, 2017, the~~The Company divides its watch and accessory business into two principal categories: the owned brands category and the licensed brands category. The owned brands category consists of the Movado®, ~~Olivia Burton®~~Concord®, Ebel®, ~~Concord®~~Olivia Burton® and ~~ESQ® Movado~~MVMT® brands. ~~Previously, the Company classified the Movado®, Ebel®, Concord® and ESQ® Movado brands together as a category referred to as luxury brands. Watches~~Products in the licensed brands category include the following brands manufactured and distributed under license agreements with the respective brand owners: Coach®, ~~HUGO BOSS®~~Tommy Hilfiger®, ~~Juicy Couture®~~Hugo Boss®, Lacoste®, ~~Tommy Hilfiger®, SCUDERIA FERRARI®~~Calvin Klein® and ~~Rebecca Minkoff® and Uri Minkoff®~~Scuderia Ferrari®. ~~These changes to the Company’s watch brand categories did not change the Company’s operating segments.~~

Gross margins vary among the brands included in the Company’s portfolio and also among watch models within each brand. Watches in the Company’s owned brands category generally earn higher gross margin percentages than watches in the licensed brands category. The difference in gross margin percentages within the licensed brands category is primarily due to the impact of royalty payments made on the licensed brands. Gross margins in the Company’s e-commerce business generally earn higher gross margin percentages than those of the traditional wholesale business. Gross margins in the Company’s outlet business are affected by the mix of product sold and may exceed those of the wholesale business since the Company earns margins on its outlet store sales from manufacture to point of sale to the consumer.

Recent Developments and Initiatives

COVID-19

The COVID-19 pandemic and related public health measures materially impacted the Company’s operating results for the fiscal year ended January 31, 2021 and continue to affect how the Company and its customers and suppliers operate their businesses. Various containment and mitigation measures that have at times been imposed by governmental and other authorities around the world have adversely affected sales of our products and our supply chain.

Although the COVID-19 pandemic's adverse impact on the Company has significantly diminished in recent quarters, the pandemic is expected to continue to affect the Company’s results of operations for the foreseeable future due to impacts on supply chains, shipping operations, consumer behavior, spending levels, shopping preferences and tourism.

Russia's invasion of Ukraine

On February 24, 2022, Russia launched a comprehensive invasion of Ukraine. The invasion and the subsequent economic sanctions imposed by some countries may negatively impact the Company’s revenue to the extent the conflict and the sanctions significantly impact the economic conditions in or our ability to sell products to customers in the affected region. In response to the invasion, the Company decided in March 2022 to suspend all sales to Russia and Belarus. Sales and assets in these two countries are immaterial to

the Company’s results of operations, financial condition and cash flows. However, the conflict could have broader implications on economies outside the region, such as the global inflationary impact of a potential boycott of Russian oil and gas by other countries.

Results of Operations Overview

The following is a discussion of the results of operations for the three months ended ~~October 31, 2017 as~~April 30, 2022 compared to the three months ended ~~October~~April 30, 2021, along with a discussion of the changes in financial condition during the first three months of fiscal 2023. The Company’s results of operations for the first three months of fiscal 2023 should not be deemed indicative of the results that the Company will experience for the full year of fiscal 2023. See “Recent Developments and Initiatives” above. See also “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2016~~2022 filed with the Securities and Exchange Commission on March 24, 2022.

Net Sales: Comparative net sales by business segment were as follows (in thousands):

	Three Months Ended October 31,
	2017		2016		Three Months Ended April 30,
Wholesale:
					2022		2021
Watch and Accessory Brands:
United States	$	67,304	$	86,125	$	51,062	$	47,867
International		105,008		77,964		92,306		68,412
Total Wholesale		172,312		164,089
Retail		18,381		15,729
Total Watch and Accessory Brands						143,368		116,279
Company Stores:
United States						19,161		18,026
International						895		493
Total Company Stores						20,056		18,519
Net Sales	$	190,693	$	179,818	$	163,424	$	134,798

Comparative net sales by categories were as follows (in thousands):

Three Months Ended
October 31,

2017

2016

Wholesale:

Owned brands category

$
75,138

$
73,749

Licensed brands category

95,015

86,818

After-sales service and all other

2,159

3,522

Total Wholesale

172,312

164,089

Retail

18,381

15,729

Consolidated total

$
190,693

$
179,818


	Three Months Ended April 30,
	2022		2021
Watch and Accessory Brands:
Owned brands category	$	53,170	$	48,371
Licensed brands category		88,840		67,626
After-sales service and all other		1,358		282
Total Watch and Accessory Brands		143,368		116,279
Company Stores		20,056		18,519
Net Sales	$	163,424	$	134,798

Net Sales

Net sales for the three months ended ~~October 31, 2017~~April 30, 2022 were ~~$190.7~~$163.4 million, representing a $28.6 million or 21.2% above the prior year ~~period by $10.9 million or 6.0%.~~period. This increase is primarily as a result of increased volumes resulting from higher demand. For the three months ended ~~October 31, 2017,~~April 30, 2022, fluctuations in foreign currency exchange rates ~~favorably~~ negatively impacted net sales by ~~$1.1~~$4.2 million when compared to the prior year period.

Watch and Accessory Brands Net Sales

Net sales for the three months ended ~~October 31, 2017~~April 30, 2022 in the ~~Wholesale~~Watch and Accessory Brands segment were ~~$172.3~~$143.4 million, an increase above the prior year period by ~~$8.2~~$27.1 million, or ~~5.0%~~23.3%. The increase in net sales was primarily due to increased volumes resulting from higher demand with growth in the ~~result~~Company's wholesale customers and the addition of ~~an increase~~the Calvin Klein brand. There were increases in net sales in ~~the International location of the Wholesale segment, partially offset by a decrease in net sales in~~both the United States ~~location~~and International locations of the ~~Wholesale~~Watch and Accessory Brands segment.

United States Watch and Accessory Brands Net Sales

Net sales for the three months ended ~~October 31, 2017~~April 30, 2022 in the United States ~~location~~locations of the ~~Wholesale~~Watch and Accessory Brands segment were ~~$67.3~~$51.1 million, ~~below~~above the prior year period by ~~$18.8~~$3.2 million, or ~~21.9%~~6.7%, ~~driven by~~resulting from net sales ~~decreases~~increases in both the owned and licensed ~~brands and owned brands categories.~~brand categories primarily due to increased volumes resulting from higher demand with growth in the Company's wholesale customers. The net sales ~~decreases~~ recorded in the licensed and owned brands categories were $10.2 million, or 39.3%, and $8.5 million, or 14.5%, respectively. The net sales decreases in both categories reflected the overall U.S. watch market, which continues to be challenging and unpredictable, as well as declining traffic in malls, traditional department stores and jewelry chain stores. The net sales decrease in the owned brands category ~~included an offset of U.S.~~increased by $2.1 million, or 5.6%, and net sales ~~attributable to~~recorded in the ~~acquisition of the Olivia Burton brand.~~licensed brand category increased $0.2 million, or 1.4%.

International Watch and Accessory Brands Net Sales

Net sales for the three months ended ~~October 31, 2017~~April 30, 2022 in the International ~~location~~locations of the ~~Wholesale~~Watch and Accessory Brands segment were ~~$105.0~~$92.3 million, above the prior year by ~~$27.0~~$23.9 million, or ~~34.7%~~34.9%, which included fluctuations in foreign currency exchange rates which ~~favorably~~negatively impacted net sales by ~~$1.1~~$4.2 million when compared to the prior year period. ~~This~~The increase ~~was primarily driven by~~in net sales ~~increases~~was across most brands in both the owned and licensed ~~brands and owned brands categories. The net sales increase in the licensed brands category was $18.4 million, or 30.1%,~~brand categories primarily due to ~~net sales increases~~increased volumes resulting from higher demand with growth in ~~Europe, Latin America,~~ the ~~Middle East~~Company's wholesale customers and ~~Asia.~~the addition of the Calvin Klein brand. The net sales increase recorded in the owned brands category was ~~$9.9~~$2.7 million, or ~~64.7%~~24.5%, and is primarily due to net sales increases in Europe and ~~Asia.~~ the Middle East. The net sales increase in the ~~owned~~licensed brands category ~~included~~was $21.1 million, or 37.2%, due to net sales ~~attributable to the acquisition of the Olivia Burton brand.~~increases across all regions.

Company Stores Net Sales

Net sales for the three months ended ~~October 31, 2017~~April 30, 2022 in the ~~Retail~~Company Stores segment were ~~$18.4~~$20.1 million, $1.5 million or 8.3% above the prior year ~~period by $2.7 million, or 16.9%, as a~~period. The net sales increase was primarily the result of ~~higher sales in both comparable~~the opening of four new retail outlet stores and ~~non-comparable stores resulting from better product mix and higher conversion rates as products resonate well with customers and operating more~~the growth of the Company's online outlet ~~locations in the current period.~~store at www.movadocompanystore.com. As of ~~October 31, 2017,~~April 30, 2022 and 2021, the Company operated 41 51 and 47 retail outlet locations, ~~and as of October 31, 2016, the Company operated 40 retail outlet locations.~~respectively.

Gross ~~Profit.~~ Profit

Gross profit for the three months ended ~~October 31, 2017~~April 30, 2022 was ~~$104.1~~$96.7 million or ~~54.6%~~59.2% of net sales as compared to ~~$98.6~~$74.2 million or ~~54.8%~~55.0% of net sales in the prior year period. The increase in gross profit of ~~$5.5~~$22.5 million was primarily due to higher net sales ~~partially offset by~~combined with a ~~lower~~higher gross margin percentage. The ~~decrease~~increase in the gross margin percentage of approximately 20420 basis points for the three months ended ~~October 31, 2017,~~April 30, 2022 resulted primarily from an unfavorable shift in channel and product mix of approximately 50 basis points and an unfavorable impact of approximately 30 basis points related to the amortization of the inventory step-up adjustment due to the acquisition of the Olivia Burton brand in the current period. These unfavorable impacts were partially offset by the Company’s cost savings initiatives of approximately 30 basis points and a favorable impact of ~~fluctuations in foreign currency exchange rates~~sales mix of approximately 30430 basis ~~points.~~points, partially offset by an approximately 60 basis point impact due to increased shipping costs.

Selling, General and Administrative (“SG&A”).

SG&A expenses for the three months ended ~~October 31, 2017~~April 30, 2022 were ~~$78.9~~$71.4 million, representing an increase from the prior year period of ~~$11.4~~$10.4 million, or ~~16.9%~~17.1%. The increase in SG&A expenses was ~~attributable to charges related to the Company’s cost savings initiatives of $7.0 million,~~ primarily due to the write-off of certain fixed assets and contract termination costs related to the Company’s decision to no longer participate at the Baselworld Watch and Jewelry Show and the write-off of certain fixed assets related to the reduction of leased space in the Company’s Swiss operations. Also contributing to the increase in SG&A expenses were higher performance-based compensation of $1.5 million, higher distribution costs of $1.3 million,following factors: higher marketing expenses of ~~$1.2 million~~$4.9 million; an increase in payroll related expenses of $2.2 million; an increase in consulting and $0.8 million of expenses related to the Company’s acquisition of the Olivia Burton brand related to the amortization of acquired intangible assets. These increases in SG&A expenses were partially offset by a decrease in compensation and benefit expensesrecruiting charges of $1.0 million ~~(which included additional expenses~~and an increase in rent and rent related ~~to the acquisition~~ of the Olivia Burton brand and operating more outlet locations), primarily related to the Company’s cost savings initiatives, which predominately included a reduction in the Company’s workforce in the Company’s North American and Swiss operations.

~~Wholesale Operating Income.~~ In$0.6 million. For the three months ended ~~October 31, 2017~~April 30, 2022, fluctuations in foreign currency rates related to the foreign subsidiaries positivelyimpacted SG&A expenses by $0.6 million when compared to the prior year period.

Watch and ~~2016, respectively,~~Accessory Brands Operating Income

For the three months ended April 30, 2022, the Company recorded ~~Wholesale segment~~ operating income of ~~$22.2~~$21.5 million in the Watch and ~~$28.7 million,~~Accessory Brands segment which includes ~~$15.8 million and $14.3~~ $13.5million of unallocated corporate expenses as well as ~~$15.7~~ $19.1million of certain intercompany profits related to the Company’s supply chain operations. For the three months ended April 30, 2021, the Company recorded operating income of $8.8 million in the Watch and ~~$14.0~~Accessory Brands segment which includes $8.9 million of unallocated corporate expenses as well as $13.9 million of certain intercompany profits related to the Company’s supply chain operations. The ~~$6.5 million decrease~~increase in operating income was the ~~net~~ result of ~~higher~~an increase in gross profit of $21.5 million, partially offset by an increase in SG&A expenses of ~~$10.5 million, partially offset by a higher gross profit of $4.0~~$8.8 million when compared to the prior year period. The increase in SG&A expenses was attributable to charges related to the Company’s cost savings initiatives of $7.0 million, primarily due to the write-off of certain fixed assets and contract termination costs related to the Company’s decision to no longer participate at the Baselworld Watch and Jewelry Show and the write-off of certain fixed assets related to the reduction of leased space in the Company’s Swiss operations. Also contributing to the increase in SG&A expenses were higher performance-based compensation of $1.5 million, higher distribution costs of $1.3 million, higher marketing expenses of $1.2 million and $0.8 million of expenses related to the Company’s acquisition of the Olivia Burton brand related to the amortization of acquired intangible assets. These increases in SG&A expenses were partially offset by a decrease in compensation and benefit expenses of $1.2 million (which included additional expenses related to the acquisition of the Olivia Burton brand), primarily related to the Company’s cost savings initiatives, which predominately included a reduction in the Company’s workforce in the Company’s North American and Swiss operations. The increase in gross profit of $4.0 million was primarily due to higher net sales.

~~U.S. Wholesale Operating Income.~~ In the United States location of the Wholesale segment, during the three months ended October 31, 2017 and 2016, respectively, the Company recorded a breakeven and $12.2 million in operating income, which included unallocated corporate expenses of $15.8 million and $14.3 million. The decrease in operating income of $12.2 million was the net result of lower gross profit of $12.6 million, partially offset by lower SG&A expenses of $0.4 million. The decrease in gross profit of $12.6 million was due to lower net sales and a lower gross margin percentage. The decrease in SG&A expenses of $0.4 million was attributable to a decrease in compensation and benefit expenses of $1.8 million due to lower headcount related to the Company’s cost savings initiatives, lower stock-based compensation expense of $0.4 million, partially offset by higher performance-based compensation of $1.3 million and higher marketing expense of $0.7 million.

~~International Wholesale Operating Income.~~ In the International location of the Wholesale segment, during the three months ended October 31, 2017 and 2016, respectively, the Company recorded operating income of $22.2 million and $16.4 million, which included $15.7 million and $14.0 million of certain intercompany profits related to the Company’s International supply chain operations. The increase in operating income of $5.8 million was primarily due to higher gross profit of $16.7 million, partially offset by higher SG&A expenses of $10.9 million. The increase in gross profit of $16.7 million was primarily due to higher net sales and, to lesser extent, a higher gross margin percentage. The increase in SG&A expenses of $10.9 million was attributable to charges related to the Company’s cost savings initiatives of $7.0 million, primarily due to the write-off of certain fixed assets and contract termination costs related to the Company’s decision to no longer participate at the Baselworld Watch and Jewelry Show and the write-off of certain fixed assets related to the reduction of leased space in the Company’s Swiss operations. Also contributing to the increase in SG&A expenses were higher distribution costs of $1.3 million, $0.8 million of expenses related to the Company’s acquisition of the Olivia Burton brand, which primarily included the amortization of acquired intangible assets, higher compensation and benefit expenses of $0.6 million, (which included additional expenses related to the acquisition of the Olivia Burton brand) and higher marketing expenses of $0.5 million.

~~Retail Operating Income.~~ Operating income of $2.9 million and $2.4 million was recorded in the Retail segment for the three months ended October 31, 2017 and 2016, respectively. The increase in operating income of $0.5 million was the result a higher gross profit of $1.4 million partially offset by higher SG&A expenses of $0.9 million. The higher gross profit was primarily the result of higher net sales ~~partially offset by~~combined with a ~~lower~~higher gross margin percentage. The increase in SG&A expenses of $0.9 million was primarily due to higher compensation, benefit and occupancy expenses related to operating more outlet locations when compared to the prior year period.

~~Other Expense.~~ The Company recorded other expense of $1.3 million for the three months ended October 31, 2016. The Company had a long-term investment in a privately held company, accounted for under the cost method, with a carrying value of $1.3 million. Due to the increasingly competitive and difficult market conditions, the operating performance and business outlook for the Company’s long-term investment declined significantly during the three months ended October 31, 2016. As such, the Company determined the investment experienced an other than temporary impairment and recorded a charge of $1.3 million, to reduce the carrying value to zero in the United States location of the Wholesale segment.

~~Income Taxes.~~ ~~The Company recorded income tax expense of $7.5 million and $9.3 million for the three months ended October 31, 2017 and 2016, respectively.~~

The effective tax rate was 30.1% and 31.5% for the three months ended October 31, 2017 and 2016, respectively. The decrease in the effective tax rate was primarily due to changes in jurisdictional earnings and the impact of discrete items partially offset by no tax benefit being recognized on losses incurred by certain foreign operations.

The effective tax rate for the three months ended October 31, 2017 differs from the U.S. statutory tax rate of 35.0% primarily due to changes in jurisdictional earnings and the impact of discrete items, partially offset by no tax benefit being recognized on losses incurred by certain foreign operations.

The effective tax rate for the three months ended October 31, 2016 differs from the U.S. statutory tax rate of 35.0% primarily as a result of changes in jurisdictional earnings, partially offset by no tax benefit being recognized on losses incurred by certain foreign operations.

~~Net Income Attributed to Movado Group, Inc.~~ ~~The Company recorded net income attributed to Movado Group, Inc. of $17.4 million and $20.2 million for the three months ended October 31, 2017 and 2016, respectively.~~

~~Results of operations for the nine months ended October 31, 2017 as compared to the nine months ended October 31, 2016~~

~~Net Sales:~~ ~~Comparative net sales by business segment were as follows (in thousands):~~

Nine Months Ended
October 31,

2017

2016

Wholesale:

United States

$
144,076

$
184,025

International

226,414

193,233

Total Wholesale

370,490

377,258

Retail

48,249

44,709

Net Sales

$
418,739

$
421,967

~~Comparative net sales by categories were as follows (in thousands):~~

Nine Months Ended
October 31,

2017

2016

Wholesale:

Owned brands category

$
154,620

$
162,428

Licensed brands category

208,914

205,229

After-sales service and all other

6,956

9,601

Total Wholesale

370,490

377,258

Retail

48,249

44,709

Consolidated total

$
418,739

$
421,967

Net sales for the nine months ended October 31, 2017 were $418.7 million, below the prior year period by $3.2 million or 0.8%. For the nine months ended October 31, 2017, fluctuations in foreign currency exchange rates unfavorably impacted net sales by $2.1 million when compared to the prior year period.

Net sales for the nine months ended October 31, 2017 in the Wholesale segment were $370.5 million, below the prior year period by $6.8 million or 1.8%. The decrease in net sales was the result of a decrease in net sales in the United States location of the Wholesale segment, partially offset by an increase in net sales in the International location of the Wholesale segment.

Net sales for the nine months ended October 31, 2017 in the United States location of the Wholesale segment were $144.1 million, below the prior year period by $40.0 million or 21.7%, driven by net sales decreases in both the owned brands and licensed brands categories. The net sales decreases recorded in the owned and licensed brands categories were $20.4 million, or 16.4%, and $18.8 million, or 35.1%, respectively. The sales decreases in both categories reflected the overall watch market, which continues to be challenging and unpredictable, as well as declining traffic in malls, traditional department stores and jewelry chain stores. The sales decrease in the licensed brands category included an offset of the launch of Rebecca Minkoff and Uri Minkoff brand watches during the second quarter of fiscal 2018. The sales decrease in the owned brands category included an offset of U.S. sales attributable to the Olivia Burton brand in the current period.

Net sales for the nine months ended October 31, 2017 in the International location of the Wholesale segment were $226.4 million, above the prior year by $33.2 million or 17.2%, which included fluctuations in foreign currency exchange rates which unfavorably impacted net sales by $2.1 million when compared to the prior year period. This increase was primarily driven by net sales increases in both the licensed brands and owned brands categories. The net sales increase in the licensed brands category was $22.5 million, or 14.9%, primarily due to sales increases in Europe, the Middle East, Latin America and Asia. The net sales increase recorded in the owned brands category was $12.6 million, or 33.4%, primarily due to sales increases in Europe, Asia and Latin America. The net sales increase in the owned brands category included sales attributable to the Olivia Burton brand in the current period.

Net sales for the nine months ended October 31, 2017 in the Retail segment were $48.2 million, above the prior year period by $3.5 million, or 7.9%, as a result of higher sales in both comparable and non-comparable stores resulting from better product mix and higher conversion rates as products resonate well with customers and operating more outlet locations in the current period.

~~Gross Profit.~~ Gross profit for the nine months ended October 31, 2017 was $219.3 million or 52.4% of net sales as compared to $230.1 million or 54.5% of net sales in the prior year period. The decrease in gross profit of $10.8 million was primarily due to lower net sales and a lower gross margin percentage. The decrease in the gross margin percentage of approximately 210 basis points for the nine months ended October 31, 2017, resulted primarily from an unfavorable shift in channel and product mix of approximately 170 basis points, severance related to the Company’s cost savings initiative of approximately 30 basis points, an unfavorable impact of fluctuations in foreign currency exchange rates of approximately 20 basis points, and an unfavorable impact of approximately 20 basis points related to the amortization of the inventory step-up adjustment due to the acquisition of the Olivia Burton brand in the current period. These unfavorable impacts were partially offset by the Company’s cost savings initiatives of approximately 30 basis points.

~~Selling, General and Administrative (“SG&A”).~~ SG&A expenses for the nine months ended October 31, 2017 were $189.5 million, representing an increase from the prior year period of $5.9 million or 3.2%. The increase in SG&A expenses was attributable to a $12.0 million charge related to the Company’s cost savings initiatives and $5.1 million of expenses related to the Company’s acquisition of the Olivia Burton brand, which primarily included transaction costs and the amortization of acquired intangible assets. Also contributing to the increase in SG&A expenses were higher performance-based compensation of $1.8 million and higher distribution costs of $1.6 million. These increases in SG&A expenses were partially offset by a decrease in compensation and benefit expenses of $6.6 million, (which included additional expenses related to the acquisition of the Olivia Burton brand and operating more outlet locations) primarily due to the Company’s cost savings initiatives, which predominately included a reduction in the Company’s workforce in the Company’s North American and Swiss operations, and the non-recurrence of a $1.8 million charge related to the retirement announcement of the Company’s former Vice Chairman and Chief Operating Officer, which occurred in the prior year period. Also contributing to the decrease in SG&A expenses were the fluctuations in foreign currency exchange rates of $3.9 million (resulting from a $1.0 million transactional gain in the current period compared to a $2.2 million transactional loss in the prior year period and $0.7 million of which arose from the translation of foreign subsidiary results), lower marketing expenses of $1.5 million and lower customer related expenses of $2.1 million, primarily due to a ~~recovery of $0.8 million of the allowances for uncollectible receivables from a customer~~favorable impact in ~~the current period that were initially recorded in the comparable period last year.~~

~~Wholesale Operating Income.~~ In the nine months ended October 31, 2017 and 2016, respectively, the Company recorded Wholesale segment operating income of $22.6 million and $39.9 million, which includes $29.2 million and $33.0 million of unallocated corporate expenses as well as $31.2 million and $30.5 million of certain intercompany profits related to the Company’s supply chain operations. The $17.3 million decrease in operating income was the net result of a decrease in gross profit of $12.3 million and higher SG&A expenses of $5.0 million when compared to the prior year period. The decrease in gross profit of $12.3 million was primarily due to lower net sales and lower gross margin percentage. The increase in SG&A expenses was attributable to a $12.0 million charge related to the Company’s cost savings initiatives and $5.1 million of expenses related to the Company’s acquisition of the Olivia Burton brand, which primarily included transaction costs and the amortization of acquired intangible. Also contributing to the increase in SG&A expenses were higher performance-based compensation of $1.8 million and higher distribution costs of $1.6 million. These increases in SG&A expenses weremix, partially offset by a decrease in compensation and benefit expenses of $6.7 million, (which included additional expenses related to the acquisition of the Olivia Burton brand) primarily due to the Company’s cost savings initiatives, which predominately included a reduction in the Company’s workforce in the Company’s North American and Swiss operations, and the non-recurrence of a $1.8 million charge related to the retirement announcement of the Company’s former Vice Chairman and Chief Operating Officer, which occurred in the prior year period. Also contributing to the decrease in SG&A expenses were the fluctuations in foreign currency exchange rates of $3.9 million (resulting from a $1.0 million transactional gain in the current period compared to a $2.2 million transactional loss in the prior year period and $0.7 million of which arose from the translation of foreign subsidiary results), lower marketing expenses of $1.5 million and lower customer related expenses of $2.1 million, primarily due to a recovery of $0.8 million of the allowances for uncollectible receivables from a customer in the current period that were initially recorded in the comparable period last year.

~~U.S. Wholesale Operating Loss / Income.~~ In the United States location of the Wholesale segment, during the nine months ended October 31, 2017 and 2016, respectively, the Company recorded operating loss of $12.7 million and an operating income of $6.2 million, which included unallocated corporate expenses of $29.2 million and $33.0 million.increased shipping costs. The decrease in operating income of $18.9 million was the net result of lower gross profit of $27.7 million, partially offset by lower SG&A expenses of $8.8 million. The decrease in gross profit of $27.7 million was due to lower sales and a lower gross margin percentage. The decreaseincrease in SG&A expenses of $8.8 million was primarily ~~attributable to lower compensation and benefit expenses of $8.7 million~~ due to the ~~Company’s cost savings initiatives, and the non-recurrence~~following factors: higher marketing expenses of ~~a $1.8 million charge related to the retirement announcement of the Company’s former Vice Chairman and Chief Operating Officer, which occurred~~$4.7 million; an increase in ~~the prior year period, and lower marketing expense of $2.2 million and lower customer~~payroll related expenses of ~~$1.4 million, primarily due to a recovery~~$1.5 million; and an increase in consulting and recruiting charges of ~~$0.8 million of~~$1.0 million. For the allowances for uncollectible receivables from a customer in the current period and a charge of $0.8 million to allowances for uncollectible receivables in the prior year period, partially offset by a $3.7 million charge related to the Company’s cost savings initiatives and higher performance based compensation expense of $1.5 million.

~~International Wholesale Operating Income.~~ ~~In the International location of the Wholesale segment, during the nine~~three months ended October 31, 2017 and 2016, respectively, the Company recorded operating income of $35.3 million and $33.7 million, which included $31.2 million and $30.5 million of certain intercompany profits related to the Company’s International supply chain operations. The increase in operating income of $1.6 million was primarily due to higher gross profit of $15.3 million, partially offset by higher SG&A expenses of $13.8 million. The increase in gross profit of $15.3 million was primarily due to higher net sales partially offset by a lower gross margin percentage. The increase in SG&A expenses of $13.8 million was primarily attributable to an $8.3 million charge related to the Company’s cost savings initiatives, $4.9 million of expenses related to the Company’s acquisition of the Olivia Burton brand, which included transaction costs and the amortization of acquired intangible assets, and higher compensation and benefit expenses of $2.1 million (which included additional expenses related to the acquisition of the Olivia Burton brand), higher distribution costs of $1.6 million and higher marketing of $0.7 million, partially offset by theApril 30, 2022, fluctuations in foreign currency exchange rates ~~of $3.9~~negatively impacted the Watch and Accessory Brands segment operating income by $1.6 million ~~(resulting from a $1.0 million transactional gain in the current period~~when compared to ~~a $2.2 million transactional loss in~~ the prior year ~~period~~period.

U.S. Watch and ~~$0.7 million~~Accessory Brands Loss

In the United States locations of ~~which arose from~~ the ~~translation of foreign subsidiary results).~~

~~Retail Operating Income.~~ ~~Operating income of $7.3 million~~Watch and ~~$6.6 million was recorded in the Retail~~Accessory Brands segment, for the ~~nine~~three months ended ~~October 31, 2017~~April 30, 2022, the Company recorded an operating loss of $3.0 million which includes unallocated corporate expenses of $13.5 million. For the three months ended April 30, 2021 the Company recorded an operating loss of $4.1 million in the United States locations of the Watch and ~~2016, respectively.~~Accessory Brands segment which included unallocated corporate expenses of $8.9 million. The ~~increase~~decrease in operating ~~income of $0.7 million~~loss was the result of ~~an increase in~~higher gross profit of ~~$1.5~~$6.0 million, partially offset by an increase in SG&A expenses of ~~$0.8~~$4.9 million when compared to the prior year period. The increase in gross profit of ~~$1.5~~$6.0 million was due to higher net sales, combined with a higher gross margin percentage primarily due to a favorable impact of sales mix, partially offset by increased shipping costs. The increase in SG&A expenses of $4.9 million was primarily due to higher marketing expenses of $4.5 million and an increase in consulting and recruiting charges of $0.6 million.

International Watch and Accessory Brands Operating Income

In the International locations of the Watch and Accessory Brands segment, for the three months ended April 30, 2022, the Company recorded operating income of $24.5 million which includes $19.1million of certain intercompany profits related to the Company’s International supply chain operations. For the three months ended April 30, 2021 the Company recorded operating income of $12.9 million in the International locations of the Watch and Accessory Brands segment which included $13.9 million of certain intercompany profits related to the Company’s supply chain operations. The increase in operating income was primarily related to higher gross profit of $15.5 million, partially offset by higher SG&A expenses of $3.9 million. The increase in gross profit of $15.5 million was primarily due to higher net sales, ~~partially offset by~~combined with a ~~lower~~higher gross margin ~~percentage.~~percentage primarily due to a favorable impact of sales mix. The increase in SG&A expenses of ~~$0.8~~$3.9 million was primarily due to the following factors: an increase in payroll related expenses of $1.8 million; an increase in consulting and recruiting charges of $0.4 million; and higher ~~compensation, benefit and occupancy~~marketing expenses ~~related to~~of $0.2 million. Fluctuation in foreign currency exchange rates negatively impacted operating ~~more outlet locations~~income by $1.6 million when compared to the prior year period.

Company Stores Operating Income

The Company recorded operating income of $3.7 million and $4.5 million in the Company Stores segment for the three months ended April 30, 2022 and 2021, respectively. The decrease in operating income of $0.8 million was primarily related to an increase in SG&A expenses of $1.7 million, partially offset by a higher gross profit of $0.9 million mainly due to higher net sales. The increase in SG&A expenses was primarily due to an increase of $0.6 million in payroll related expenses; an increase in rent and rent related of $0.3 million due to the opening of new company stores; and an increase in marketing expense of $0.2 million. As of April 30, 2022, and 2021, the Company Stores segment operated 51 and 47 retail outlet locations, respectively.

Other ~~Expense.~~Non-Operating Income

The Company recorded other income of $0.1 million for both the three months ended April 30, 2022 and 2021, primarily due to the non-service components of the Company’s Swiss pension plan.

Interest Expense

Interest expense ~~of $1.3~~was $0.1 million and $0.3 million for the ~~nine~~three months ended ~~October 31, 2016.~~April 30, 2022 and 2021, respectively. The ~~Company had a long-term investment in a privately held company, accounted for~~decrease was due to no borrowings under the ~~cost method, with a carrying value of $1.3 million. Due to~~Company’s revolving credit facility during the ~~increasingly competitive and difficult market conditions, the operating performance and business outlook for the Company’s long-term investment declined significantly~~current year period partially offset by higher unused credit line fees during the three months ended ~~October31, 2016. As such,~~April 30, 2022 as compared to the ~~Company determined the investment experienced an other than temporary impairment and recorded a charge of $1.3 million, to reduce the carrying value to zero.~~three months ended April 30, 2021.

Income ~~Taxes.~~ Taxes

The Company recorded an income tax ~~expense~~provision of ~~$10.3~~$6.0 million and ~~$14.5~~$3.3 million for the ~~nine~~three months ended ~~October 31, 2017~~April 30, 2022 and ~~2016,~~2021, respectively.

The effective tax rate was ~~35.6%~~23.8% and ~~32.6%~~25.5% for the ~~nine~~three months ended ~~October 31, 2017~~April 30, 2022 and ~~2016,~~2021, respectively. The ~~increase in~~significant components of the effective tax rate ~~was~~changed primarily due to the ~~impact~~release of ~~discrete items mostly related~~certain foreign valuation allowances in the current year as compared to the ~~adoption~~recording of ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” acquisition costs related to the acquisition of the Olivia Burton brand and no tax benefit being recognized on losses incurred by certain foreign ~~operations,~~valuation allowances in the prior year, partially offset by ~~changes in jurisdictional earnings.~~return to provision adjustments.

The effective tax rate for the nine months ended October 31, 2017 differs from the U.S. statutory tax rate of 35.0% primarily due to changes in jurisdictional earnings and the impact of discrete items, partially offset by no tax benefit being recognized on losses incurred by certain foreign operations, as well as an increase primarily due to the adoption of ASU 2016-09 and acquisition costs related to the acquisition of the Olivia Burton brand.

The effective tax rate for the nine months ended October 31, 2016 differs from the U.S. statutory tax rate of 35.0% primarily as a result of changes in jurisdictional earnings, partially offset by no tax benefit being recognized on losses incurred by certain foreign operations.

Net Income ~~Attributed~~Attributable to Movado Group, Inc.

The Company recorded net income ~~attributed~~attributable to Movado Group, Inc. of ~~$18.7~~$18.5 million and ~~$29.8~~$9.4 million for the ~~nine~~three months ended ~~October 31, 2017~~April 30, 2022 and ~~2016,~~2021, respectively.

LIQUIDITY AND CAPITAL RESOURCES

At ~~October 31, 2017~~April 30, 2022 and ~~October 31, 2016, respectively,~~April 30, 2021, the Company had ~~$155.5~~$225.3 million and ~~$199.8~~$187.0 million, respectively, of cash and cash ~~equivalents, $143.9~~equivalents. Of this total, $188.8 million and ~~$194.6~~$114.7 million, ~~of which~~respectively, consisted of cash and cash equivalents at the ~~Company’s~~Company's foreign subsidiaries. ~~The majority of the foreign cash balances are associated with earnings that~~

At April 30, 2022 the Company ~~has asserted are permanently reinvested, and which are required~~had working capital of $386.6 million as compared to ~~support continued growth outside~~$368.9 million at April 30, 2021. The increase in working capital was primarily the ~~United States through funding~~result of ~~capital expenditures, operating expenses and similar~~an increase in cash ~~needs~~ of ~~the foreign operations.~~$38.3 million partially offset by a decrease in income taxes receivable. The Company has recorded a federal tax liability of $2.9 million related to $12.6 million of pre-2013 foreign earnings which have been earmarked for future repatriation. A deferred tax liability has not been recorded fordefines working capital as the ~~remaining undistributed foreign earnings of approximately $330 million, because the~~difference between current assets and current liabilities.

The Company intends to permanently reinvest such earnings in its foreign operations. It is, therefore, not practicable to estimate the amount of tax that may be payable on the future possible distribution of these earnings.

~~Cash used in operating activities was $9.4 million and $10.8 million for the nine months ended October 31, 2017 and 2016, respectively. The $9.4~~had $20.8 million of cash used in operating activities for the ~~nine~~three months ended ~~October 31, 2017, was primarily due~~April 30, 2022 as compared to an unfavorable change in working capital as presented on the consolidated statements of cash flows of $56.1 million, partially offset by favorable non-cash items of $28.7 million, which included a $13.4 million charge related to the Company’s cost savings initiatives, and net income of $18.7 million. The unfavorable change in working capital of $56.1 million was primarily due to the increases in accounts receivable as a result of the seasonality of sales and the normal building of inventory in anticipation of the holiday selling season in the fourth quarter of the current fiscal year, as well as inventory build related to the acquisition of the Olivia Burton brand, partially offset by higher accrued liabilities. Included in the change in working capital were $5.4 million of payments related to the Company’s cost savings initiatives. The $10.8$15.4 million of cash used in operating activities for the ~~nine~~three months ended ~~October 31, 2016, was primarily due to an unfavorable change~~April 30, 2021. Cash used in ~~working capital as presented on~~operating activities for the ~~cash flow of $59.7 million, partially offset by favorable non-cash items of $20.3 million and~~three months ended April 30, 2022 included net income of $19.3 million, positively adjusted by $4.2 million related to non-cash items. Cash used in operating activities for the ~~period~~three months ended April 30, 2022 included a $24.3 million increase in investment in inventories primarily to support sales growth and a decrease in accrued payroll of ~~$29.9 million. The unfavorable change in working capital of $59.7~~$17.1 million ~~was~~ primarily ~~due to the increases in accounts receivable~~ as a result of ~~the seasonality~~payments of ~~sales and the building of inventory in anticipation of the holiday selling season,~~performance-based compensation, partially offset by ~~higher~~an increase in accrued ~~liabilities.~~liabilities of $6.1 million primarily as a result of timing of payments and a decrease in income taxes receivable of $5.1 million resulting from tax refunds received.

Cash used in investing activities was ~~$82.0 million and $5.5~~$3.3 million for the ~~nine~~three months ended ~~October 31, 2017 and 2016, respectively. The~~April 30, 2022 as compared to cash used in investing activities of $0.5 million for the ~~nine~~three months ended October 31, 2017 was primarily for the acquisition, net of cash acquired, of the Olivia Burton brand and capital expenditures primarily related to the opening and renovations of the Company’s retail outlet locations and capital expenditures related to the construction of shop-in-shops at some of the Company’s wholesale customers.April 30, 2021. The cash used in ~~investing activities for~~ the ~~nine~~three months ended ~~October 31, 2016~~April 30, 2022 was primarily ~~for restricted cash deposits~~related to$1.8 million of long-term investments and capital expenditures ~~related~~of $1.4 million primarily due to the ~~construction~~Company’s opening of ~~shop-in-shops at some of the Company’s wholesale customers,~~four new stores (two in Canada) during fiscal 2022 and new computer ~~hardware and software and spending on tooling and design.~~software.

Cash used in financing activities was ~~$12.6 million and $16.8~~$22.9 million for the ~~nine~~three months ended ~~October 31, 2017 and 2016, respectively. Cash~~April 30, 2022 as compared to cash used in financing activities of $19.8 million for the ~~nine~~three months ended ~~October 31, 2017~~April 30, 2021. The cash used in the three months ended April 30, 2022 included $14.4 million in stock repurchased in the ~~payment of~~open market, $7.9 million in dividends ~~the repurchase~~paid and $1.1 million of shares repurchased as a result of the Company’s common stock, and the surrender of shares in connection with the vesting of certain stock awards. Cash used in financing activities for the nine months ended October 31, 2016 included the payment of dividends, the repayments of bank borrowings, the surrender of shares in connection with the vesting of certain stock awards, partially offset by $0.7 million received in connection with stock options exercised. Cash used in financing activities for the ~~repurchase~~three months ended April 30, 2021 included repayment of ~~shares~~bank borrowings of ~~the Company’s common stock~~$11.1 million and ~~the purchase~~$7.0 million in dividends paid ($2.3 million of ~~the remaining incremental ownership~~which had been declared in ~~a joint venture.~~January 2021).

On ~~January 30, 2015,~~October 12, 2018, the Company, together with Movado Group Delaware Holdings Corporation, Movado Retail Group, Inc. and Movado LLC (together with the Company, the “U.S. Borrowers”), each a wholly owned domestic subsidiary of the Company, and Movado Watch Company S.A. and MGI Luxury Group S.A. (collectively, the “Swiss Borrowers” and, together with the U.S. Borrowers, the “Borrowers”), each a ~~wholly-owned domestic~~wholly owned Swiss subsidiary of the Company, entered into aan Amended and Restated Credit Agreement ~~(the~~(as subsequently amended, the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”). The Credit Agreement provides for a $100.0 million senior secured revolving credit facility (the “Facility”) ~~including~~and has a maturity date of October 28, 2026. The Facility includes a $15.0 million letter of credit ~~sub-facility that matures on January 30, 2020,~~subfacility, a $25.0 million swingline subfacility and a $75.0 million sublimit for borrowings by the Swiss Borrowers, with provisions for uncommitted increases to the Facility of up to $50.0 million in the aggregate subject to customary terms and conditions. ~~In connection with the Credit Agreement, the Borrowers also entered into a Security and Pledge Agreement dated as of January 30, 2015 in favor of the Agent (the “Security Agreement”).~~

As of October 31, 2017, $30.0 million in loans were drawn under the Facility. Additionally, approximately $0.3 million in letters of credit, which were outstanding under the Borrower’s pre-existing asset-based revolving credit facility that was concurrently terminated when the Credit Agreement became effective, are deemed to be issued and outstanding under the Facility. As of October 31, 2017, availability under the Facility was approximately $69.7 million.

The Credit Agreement contains affirmative and negative covenants binding on the ~~Borrowers~~Company and ~~their~~its subsidiaries that are customary for credit facilities of this type, including, but not limited to, restrictions and limitations on the incurrence of debt and liens, dispositions of assets, capital expenditures, dividends and other payments in respect of equity interests, the making of loans and equity investments, mergers, consolidations, liquidations and dissolutions, and transactions with affiliates (in each case, subject to various exceptions).

~~As of October 31, 2017, the Company classified $5.0 million of the outstanding balance~~borrowings under the Facility ~~as current based on voluntary payments estimated to be made in the next twelve months, with the remainder classified as long-term debt based on the 2020 maturity date~~are joint and several obligations of the Borrowers and are also cross-guaranteed by each Borrower, except that the Swiss Borrowers are not liable for, nor do they guarantee, the obligations of the U.S. Borrowers. In addition, the Borrowers’ obligations under the Facility ~~and~~are secured by first priority liens, subject to permitted liens, on substantially all of the ~~Company’s intent and ability~~U.S. Borrowers’ assets other than certain excluded assets. The Swiss Borrowers do not provide collateral to ~~refinance its~~secure the obligations ~~thereunder.~~under the Facility.

As of ~~October 31, 2017, Bank~~April 30, 2022, and April 30, 2021, there was zero and $10.0 million (zero in Swiss Francs), respectively, in loans outstanding under the Facility. Availability under the Facility was reduced by the aggregate number of ~~America, N.A. issued two irrevocable standby~~ letters of credit outstanding, issued in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of ~~Canada. As of October 31, 2017,~~Canada, totaling approximately $0.3 million at both April 30, 2022 and April 30, 2021. At April 30, 2022, the ~~Company had outstanding~~ letters of credit ~~totaling $0.3 million with~~have expiration dates through May 31, ~~2018.~~2022. As of April 30, 2022, and April 30, 2021, availability under the Facility was $99.7million and $89.7 million, respectively. For additional information regarding the Facility, see Note 6 – Debt and Lines of Credit to the Consolidated Financial Statements.

The Company had weighted average borrowings under the Facility of zero and $13.1 million during the three months ended April 30, 2022 and 2021, respectively, with a weighted average interest rate of 3.21% during the three months ended April 30, 2021.

A Swiss subsidiary of the Company maintains unsecured lines of credit with an unspecified maturity with a Swiss bank. As of ~~October 31, 2017~~April 30, 2022, and ~~2016,~~2021, these lines of credit totaled 6.5 million Swiss ~~francs and 6.5 million Swiss francs~~Francs for both periods, with a dollar equivalent of ~~$6.5~~$6.7 million and ~~$6.4~~$7.1 million, respectively. As of ~~October 31, 2017~~April 30, 2022, and ~~2016,~~2021, there were no borrowings against these lines. As of October 31, 2017, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.1 million, in various foreign currencies, of which $0.5 million is a restricted deposit as it relates to lease agreements. As of October 31, 2016,April 30, 2022 and 2021, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.2 million and $1.3 million, respectively, in various foreign currencies, of which ~~$0.6~~$0.6 million, isin both periods, was a restricted deposit as it relates to lease agreements.

Cash paid for interest, including unused commitments fees, was $0.1 million and $0.2 million for the three-month periods ended April 30, 2022 and April 30, 2021, respectively.

The Company paid cash dividends of ~~$0.39~~$0.35 per share, or ~~approximately $9.0~~$7.9 million, ~~for both~~during the ~~nine~~three months ended ~~October 31, 2017 and 2016.~~

~~On November 21, 2017,~~April 30, 2022. During the ~~Board of Directors approved~~three months ended April 30, 2021, the ~~payment of~~Company paid a cash dividend of $0.10 per share, which was paid on February 5, 2021, in the amount of ~~$0.13 for each share of the Company’s outstanding common stock and class A common stock. The dividend will be paid on December 15, 2017~~$2.3 million to ~~all~~ shareholders of record ason January 21, 2021. In addition, the Company paid a cash dividend of $0.20 per share, or $4.6 million, during the ~~close of business on December 1, 2017. The~~three months ended April 30, 2021. Although the Company currently expects to continue to declare cash dividends in the future, the decision of whether to declare any future cash dividend, including the amount of any such dividend and the establishment of record and payment dates, will be determined, in each quarter, by the Board of Directors, in its sole discretion.

On ~~August 29, 2017,~~March 25, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to $25.0 million of ~~Directors approved the payment of a cash dividend in the amount of $0.13 for each share of the Company’s~~its outstanding common stock through September 30, 2022, depending on market conditions, share price and ~~class A common stock.~~

other factors. On ~~May 25, 2017,~~November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to an additional $50.0 million of ~~Directors approved the payment of a cash dividend in the amount of $0.13 for each share of the Company’s~~its outstanding common stock through November 23, 2024, depending on market conditions, share price and ~~class A~~other factors. Under both share repurchase programs, the Company is permitted to purchase shares of its common ~~stock.~~

Onstock from time to time through open market purchases, repurchase plans, block trades or otherwise. During the three months ended April 30, 2022, the Company repurchased a total of 378,380shares of its common stock under the March ~~20, 2017, the Board~~25, 2021 share repurchase program and November 23, 2021 share repurchase program at a total cost of ~~Directors approved the payment~~$14.4 million, or an average of ~~a cash dividend in the amount of $0.13~~$38.16per share. At April 30, 2022, zero remains available for ~~each share of~~purchase under the Company’s ~~outstanding~~March 25, 2021 repurchase program and $38.0 million remains available for purchase under the Company's November 23, 2021 repurchase program. During the three months ended April 30, 2021, the Company repurchased a total of 11,235 shares of its common stock ~~and class A common stock.~~under the March 25, 2021 share repurchase program at a total cost of $0.3 million, or an average of $28.11 per share.

Cash at October 31, 2017 amounted to $155.5 million compared to $199.8 million at October 31, 2016. The decrease in cash is primarily the result of the acquisition of the Olivia Burton brand, the payout of dividends, capital expenditures and the repayment of bank borrowings, partially offset by cash provided by operating activities.

Management believes that the cash on hand in addition to the expected cash flow from operations and the Company’s short-term borrowing capacity will be sufficient to meet its working capital needs for at least the next twelve months.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet financing or unconsolidated special-purpose entities.

Accounting Changes and Recent Accounting Pronouncements

See Note 143- Recent Accounting Pronouncements to the accompanying unaudited ~~consolidated financial statements~~Consolidated Financial Statements for a description of certain accounting changes and recent accounting pronouncements which may impact ~~our consolidated financial statements~~the Company’s Consolidated Financial Statements in future reporting periods.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Rate Risk

The Company’s primary market risk exposure relates to foreign currency exchange ~~risk.~~risk (see Note 7 – Derivative Financial Instruments to the Consolidated Financial Statements). A significant portion of the Company’s purchases are denominated in Swiss ~~francs~~Francs and, to a lesser extent, the Japanese Yen. The Company also sells to third-party customers in a variety of foreign currencies, most notably the Euro, Swiss Franc and the British Pound. The Company reduces its exposure to the Swiss ~~franc,~~Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rate risk through a hedging program. Under the hedging program, the Company manages most of its foreign currency exposures on a consolidated basis, which allows it to net certain exposures and take advantage of natural offsets. In the event these exposures do not offset, from time to time the Company uses various derivative financial instruments to further reduce the net exposures to currency fluctuations, predominately forward and option contracts. Certain of these contracts meet the requirements of qualified hedges. In these circumstances, the Company designates and documents these derivative instruments as a cash flow hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transactions. Changes in the fair value of hedges designated and documented as a cash flow hedge and which are highly effective, are recorded in other comprehensive income until the underlying transaction affects earnings, and then are later reclassified into earnings in the same account as the hedged transaction. The earnings impact is mostly offset by the effects of currency movements on the underlying hedged transactions. To the extent that the Company does not engage in a hedging program, any change in the Swiss Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rates to local currency would have an equal effect on the Company’s earnings.

From time to time the Company uses forward exchange contracts, which do not meet the requirements of qualified hedges, to offset its exposure to certain foreign currency receivables and liabilities. These forward contracts are not designated as qualified hedges and,

therefore, changes in the fair value of these derivatives are recognized in earnings in the period they arise, thereby offsetting the current earnings effect resulting from the revaluation of the related foreign currency receivables and liabilities. To the extent that the Company does not engage in a hedging program, any change in the Swiss franc, Euro, British Pound and Japanese Yen exchange rates to local currency have an equal effect on the Company’s earnings.

As of ~~October 31, 2017,~~April 30, 2022, the Company’s entire net forward contracts hedging portfolio consisted of ~~23.0~~9.4 million Chinese Yuan equivalent, 36.0 million Swiss ~~francs~~Francs equivalent, ~~12.8~~21.9 million U.S. dollars equivalent, 53.2 million Euros equivalent (including 38.0 million Euros designated as cash flow hedges) and ~~11.3~~1.0 million British Pounds equivalent with various expiry dates ranging through ~~April 10, 2018~~October 20, 2022, compared to a portfolio of ~~30.0~~7.5 million Chinese Yuan equivalent, 12.0 million Swiss ~~francs~~Francs equivalent, ~~11.8~~15.5 million U.S. dollars equivalent, 12.6 million Euros equivalent and ~~7.7~~0.9 million British Pounds equivalent with various expiry dates ranging through ~~March 14, 2017~~September 8, 2021, as of ~~October 31, 2016.~~April 30, 2021. If the Company were to settle its Swiss ~~franc~~Franc forward contracts at ~~October 31, 2017 and 2016,~~April 30, 2022, the net result would be a ~~loss of $0.4~~$1.3 million ~~net of tax benefit of $0.3 million and a loss of $0.2 million, net of tax benefit of $0.1 million, respectively.~~loss. If the Company were to settle its Euro forward contracts at ~~October 31, 2017 and 2016,~~April 30, 2022, the net result would be ~~an immaterial gain in both periods.~~a $1.8 million gain. As of ~~October 31, 2017 and 2016,~~April 30, 2022, the Company’s British Pound, Chinese Yuan and US Dollar forward contracts had no ~~value.~~gain or loss. The Company had no ~~Swiss franc, Euro or British Pound option contracts related to~~ cash flow hedges as of ~~October 31, 2017 and 2016, respectively.~~April 30, 2021.

Commodity Risk

The Company considers its exposure to fluctuations in commodity prices to be primarily related to gold used in the manufacturing of the Company’s watches. Under its hedging program, the Company can purchase various commodity derivative instruments, primarily futures contracts. ~~Contracts that meet the requirements of qualified hedges~~When held, these derivatives are documented as qualified cash flow hedges, and the resulting gains and losses on these derivative instruments are first reflected in other comprehensive income, and later reclassified into earnings, partially offset by the effects of gold market price changes on the underlying actual gold purchases. ~~Changes in the fair value of contracts that are not qualified hedges are recognized in the period they arise.~~ The Company did not hold any future contracts in its gold hedge portfolio as of ~~October 31, 2017~~April 30, 2022 and ~~2016;~~2021, thus, any changes in the gold purchase price will have an equal effect on the Company’s cost of sales.

Debt and Interest Rate Risk

~~The~~Floating rate debt at April 30, 2022 and 2021 totaled zero and $10.0 million (zero in Swiss Francs), respectively. During the three months ended April 30, 2022, the Company ~~has certain debt obligations with variable interest rates, which are based on LIBOR plus a spread ranging from 1.25% to 1.75% or on a base rate plus a spread ranging from 0.25% to 0.75% per annum.~~had no weighted average borrowings. The Company does not hedge these interest rate risks. As of October 31, 2017, the Company had $30.0 million in outstanding debt. The Company estimates that a 1% increase in interest rates would decrease the Company’s annual income by approximately $0.3 million. For additional information concerning potential changes to future interest obligations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, it should be noted that a control system, no matter how well conceived or operated, can only provide reasonable, not absolute, assurance that its objectives will be met and may not prevent all errors or instances of fraud.

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such terms are defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as ~~amended.~~amended (the "Exchange Act"). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective at a reasonable assurance level as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There ~~has~~have been no ~~change~~changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended ~~October 31, 2017,~~April 30, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. On July 3, 2017, the Company acquired JLB Brands Ltd., the owner of the Olivia Burton brand. In conducting its evaluation of the effectiveness of internal control over financial reporting as of October 31, 2017, the Company excluded JLB Brands Ltd. from that evaluation in accordance with the rules relating to recently-acquired entities.

PART II – ~~OTHER~~OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in legal proceedings and claims from time to time, in the ordinary course of its business. Legal reserves are recorded in accordance with the accounting guidance for contingencies. Contingencies are inherently unpredictable and it is possible that results of operations, balance sheets or cash flows could be materially and adversely affected in any particular period by unfavorable developments in, or resolution or disposition of, such matters. For those legal proceedings and claims for which the Company believes that it is probable that a reasonably estimable loss may result, the Company records a reserve for the potential loss. For proceedings and claims where the Company believes it is reasonably possible that a loss may result that is materially in excess of amounts accrued for the matter, the Company either discloses an estimate of such possible loss or range of loss or includes a statement that such an estimate cannot be made. As of October 31, 2017, the Company is party to legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations beyond the amounts accrued, or cash flows.

In December 2016, U.S. Customs and Border Protection (“U.S. Customs”) issued an audit report concerning the methodology used by the Company to allocate the cost of certain watch styles imported into the U.S. among the component parts of those watches for tariff purposes. The report disputes the reasonableness of the Company’s historical allocation formulas and proposes an alternative methodology that would imply ~~approximately~~ $5.1 million in underpaid duties over the five-year period covered by the statute of limitations, plus possible penalties and interest. The Company believes that U.S. Customs’ alternative duty methodology and estimate are not consistent with the Company’s facts and circumstances and is disputing U.S. Customs’ position. OnSince February ~~24,~~ 2017, the Company ~~provided~~has been providing U.S. Customs with supplemental analyses and information ~~supporting~~in response to U.S. Customs’ information requests. Most recently, the Company received summonses from U.S. Customs in December 2020 requesting additional information regarding component parts costs and the Company’s ~~historical allocation formulas and is~~procedures for allocating the value of imported watches among the component parts. The Company responded to these summonses in ~~the process of providing additional information for U.S. Customs’ review.~~January 2021. Although the Company disagrees with U.S. Customs’ position and believes that the information it has provided supports the reasonableness of its historical allocation formulas, it cannot predict with any certainty the outcome of this matter. The Company intends to continue to work with U.S. Customs to reach a mutually-satisfactory resolution.

Starting in July 2018, the Trump administration announced a series of lists covering thousands of categories of Chinese origin products subject to potential U.S. special tariffs, including watches. U.S. Customs subsequently issued various rulings regarding, among other things, the application of the special tariffs to China-sourced components of watches containing non-Chinese movements. A U.S. Customs ruling effective August 1, 2021 holds that the special tariff applies to all China-sourced watch bands, the special tariff does not apply to China-sourced watch cases imported as part of a watch containing a non-Chinese movement. Pending greater clarity on the retroactive effect of this ruling, for the time being the Company continues to maintain an accrual for Chinese watch case imports prior to August 1, 2021.

In addition to the above matters, the Company is involved in other legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations, or cash flows.

Item 1A. Risk Factors

As of ~~October 31, 2017,~~April 30, 2022, there have been no material changes to any of the risk factors previously reported in the Company’s ~~2017~~2022 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On ~~August 29, 2017,~~March 25, 2021, the Board ~~of Directors~~ approved a share repurchase program under which the Company is authorized to purchase up to ~~$50.0~~$25.0 million of its outstanding common stock from time to time through September 30, 2022, depending on market conditions, share price and other factors. On November 23, 2021, the Board approved a share repurchase program under which the Company is authorized to purchase up to an additional $50.0 million of its outstanding common stock through November 23, 2024, depending on market conditions, share price and other factors. Under ~~the program~~both current share repurchase programs, the Company is ~~authorized~~permitted to purchase shares of its common stock from time to time through open market purchases, repurchase ~~programs,~~plans, block trades or otherwise. ~~This authorization expires on August 29, 2020.~~ During the three months ended ~~October 31, 2017,~~April 30, 2022, the Company repurchased a total of ~~49,000~~378,380 shares of its common stock ~~in the open market~~ at a total cost of ~~approximately $1.3~~$14.4 million, or an average ~~cost~~ of ~~$27.52~~$38.16 per share.

~~There were 4,798 shares of common stock repurchased during the three months ended October 31, 2017 as a result of the surrender of shares in connection with the vesting of certain stock awards.~~ 28

At the election of an employee, upon the vesting of a stock award or the exercise of a stock option, shares of common stock having an aggregate value on the vesting of the award or the exercise date of the option, as the case may be, equal to the employee’s withholding tax obligation may be surrendered to the Company by netting them from the vested shares issued. Similarly, shares having an aggregate value equal to ~~fund~~ the exercise price of an option may be tendered to the Company in payment of ~~such taxes.~~the option exercise price and netted from the shares of common stock issued upon the option exercise. An aggregate of 28,405 shares were repurchased during the three months ended April 30, 2022 as a result of the surrender of shares of common stock in connection with the vesting of certain restricted stock awards and stock options.

The following table summarizes information about the Company’s purchases for the three months ended ~~October 31, 2017~~April 30, 2022 of equity securities that are registered by the Company pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

Issuer Repurchase of Equity Securities

Period

Total
Number of
Shares
Purchased


Average
Price Paid
Per Share


Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs


Maximum
Amount
that May
Yet Be
Purchased
Under the
Plans or
Programs

August 1, 2017 – August 31, 2017

4,798

$
27.29

—

$
50,000,000

September 1, 2017 – September 30, 2017

20,000

27.28

20,000

49,454,435

October 1, 2017 – October 31, 2017

29,000

27.69

29,000

48,651,310

Total

53,798

$
27.50

49,000

$
48,651,310


Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Amount that May Yet Be Purchased Under the Plans or Programs
February 1, 2022 – February 28, 2022		68,015	$	38.46		67,880	$	49,790,193
March 1, 2022 – March 31, 2022		108,000		37.20		108,000		45,772,635
April 1, 2022 – April 30, 2022		230,770		38.69		202,500		37,961,850
Total		406,785	$	38.26		378,380	$	37,961,850

Item 6. Exhibits


~~10.1~~		~~Thirteenth Amendment to Lease dated October 24, 2017 between Mack-Cali Realty, L.P., as landlord, and the Registrant, as tenant, further amending the lease dated as of December 21, 2000.~~
10.1
~~10.2~~		~~Term Sheet dated October 11, 2017 governing the amendment and restatement of the~~ Amended and Restated License Agreement ~~effective as of January 1, 2012 by and~~dated March 17, 2022 between MGI Luxury Group S.A. and Hugo Boss ~~Trademark~~Trade Mark Management GmbH & Co. KG.

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial information from Movado Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~October 31, 2017~~April 30, 2022 filed with the SEC, formatted in Inline Extensible Business Reporting Language ~~(XBRL)~~(iXBRL): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements. XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document.

104		Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL).

~~SIGNATURE~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		MOVADO GROUP, INC.
		(Registrant)
~~Dated: November 21, 2017~~	~~By:~~
Dated: May 26, 2022	By:	/s/ Sallie A. DeMarsilis
		Sallie A. DeMarsilis ~~Senior~~Executive Vice President, Chief Operating Officer, Chief Financial Officer and Principal Accounting Officer

3831


New York		13-2595932
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

650 From Road, Ste. 375 Paramus, New Jersey		07652-3556
(Address of Principal Executive Offices)		(Zip Code)


Large accelerated filer☐	~~Accelerated filer~~ ☒☐	Accelerated filer	☒	Non-accelerated filer ~~(Do not check if a smaller reporting company)~~	☐
Smaller reporting company☐	☐	Emerging growth company☐	☐


	Three Months Ended April 30,
	2022			2021
Net income	$	19,254		$	9,751
Other comprehensive income/(loss):
Net unrealized (loss)/gain on investments, net of tax (benefit)/provision of ($2) and $14, respectively		(5	)		41
Cash flow hedges:
Accumulated other comprehensive income before reclassification, net of tax provision of $271 and $0		1,367			-
Amounts reclassified from accumulated other comprehensive income/(loss), net of tax benefit of ($28) and $0		(139	)		-
Amortization of prior service cost, net of tax provision of $4 and $4, respectively		14			14
Foreign currency translation adjustments		(11,500	)		(3,189	)
Total other comprehensive loss, net of taxes		(10,263	)		(3,134	)
Less:
Comprehensive income/(loss) attributable to noncontrolling interests:
Net income		741			342
Foreign currency translation adjustments		(200	)		(9	)
Total comprehensive income attributable to noncontrolling interests	$	541		$	333
Total comprehensive income attributable to Movado Group, Inc.	$	8,450		$	6,284

	Nine Months Ended October 31,
	2017			2016
Cash flows from operating activities:
Net income including noncontrolling interests	$	18,683		$	29,907
Adjustments to reconcile net income to net cash (used in) operating activities:
Depreciation and amortization		9,842			8,520
Transactional (gains) / losses		(859	)		2,663
Write-down of inventories		1,930			1,967
Deferred income taxes		719			230
Stock-based compensation		3,644			5,663
Impairment of long-term investment		—			1,282
Cost savings initiative		13,437			—
Changes in assets and liabilities:
Trade receivables		(62,175	)		(60,386	)
Inventories		(14,562	)		(7,657	)
Other current assets		1,647			1,540
Accounts payable		334			(5,140	)
Accrued liabilities		18,296			12,892
Income taxes payable		373			(917	)
Other non-current assets		(5,399	)		(5,123	)
Other non-current liabilities		4,664			3,718
Net cash (used in) operating activities		(9,426	)		(10,841	)
Cash flows from investing activities:
Capital expenditures		(3,575	)		(3,847	)
Short-term investment		—			(151	)
Restricted cash deposits		1,018			(1,156	)
Trademarks and other intangibles		(500	)		(296	)
Acquisition, net of cash acquired		(78,991	)		—
Net cash (used in) investing activities		(82,048	)		(5,450	)
Cash flows from financing activities:
Proceeds from bank borrowings		—			3,000
Repayments of bank borrowings		—			(5,000	)
Stock options exercised and other changes		(626	)		(1,256	)
Dividends paid		(8,953	)		(8,951	)
Purchase of incremental ownership of U.K. joint venture		—			(1,320	)
Stock repurchase		(3,004	)		(3,263	)
Net cash (used in) financing activities		(12,583	)		(16,790	)
Effect of exchange rate changes on cash and cash equivalents		3,262			4,651
Net (decrease) in cash and cash equivalents		(100,795	)		(28,430	)
Cash and cash equivalents at beginning of period		256,279			228,188
Cash and cash equivalents at end of period	$	155,484		$	199,758


	Three Months Ended April 30,
	2022			2021
Cash flows from operating activities:
Net income	$	19,254		$	9,751
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		2,932			3,173
Transactional (gains)/losses		(340	)		(795	)
Provision for inventories and accounts receivable		661			776
Deferred income taxes		(491	)		354
Stock-based compensation		1,343			1,554
Other		66			57
Changes in assets and liabilities:
Trade receivables		(3,512	)		(1,896	)
Inventories		(24,286	)		(19,525	)
Other current assets		(5,570	)		(194	)
Accounts payable		(689	)		6,898
Accrued liabilities		6,103			(3,594	)
Accrued payroll and benefits		(17,073	)		(8,234	)
Income taxes receivable		5,116			544
Income taxes payable		(3,765	)		(5,261	)
Other non-current assets		(672	)		610
Other non-current liabilities		171			409
Net cash used in operating activities		(20,752	)		(15,373	)
Cash flows from investing activities:
Capital expenditures		(1,381	)		(407	)
Long-term investments		(1,850	)		0
Trademarks and other intangibles		(22	)		(44	)
Net cash used in investing activities		(3,253	)		(451	)
Cash flows from financing activities:
Repayment of bank borrowings		0			(11,140	)
Dividends paid		(7,940	)		(6,962	)
Stock repurchase		(14,439	)		(316	)
Stock awards and options exercised and other changes		(405	)		(1,385	)
Other		(85	)		0
Net cash used in financing activities		(22,869	)		(19,803	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(5,026	)		(1,249	)
Net decrease in cash, cash equivalents and restricted cash		(51,900	)		(36,876	)
Cash, cash equivalents, and restricted cash at beginning of year		277,716			224,423
Cash, cash equivalents, and restricted cash at end of period	$	225,816		$	187,547

Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	225,256		$	186,950
Restricted cash included in other non-current assets		560			597
Cash, cash equivalents, and restricted cash	$	225,816		$	187,547


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			Page
Part I	Financial Information (Unaudited)		3
	Item 1.	Consolidated Balance Sheets at ~~October 31, 2017,~~April 30, 2022, January 31, ~~2017~~2022 and ~~October 31, 2016~~April 30, 2021	3
		Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~October 31, 2017~~April 30, 2022 and ~~October 31, 2016~~April 30, 2021	4
		Consolidated Statements of Comprehensive Income (Loss) for the three ~~and nine~~ months ended ~~October 31, 2017~~April 30, 2022 and ~~October 31, 2016~~April 30, 2021	5
		Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~October 31, 2017~~April 30, 2022 and ~~October 31, 2016~~April 30, 2021	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2320
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3326
	Item 4.	Controls and Procedures	3427
Part II	Other Information		35
	Item 1.	Legal Proceedings	3528
	Item 1A.	Risk Factors	3528
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3528
	Item 6.	Exhibits	3730
Signature			3831


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended April 30,
	2017			2016			2017			2016			2022			2021
Net sales	$	190,693		$	179,818		$	418,739		$	421,967		$	163,424		$	134,798
Cost of sales		86,623			81,268			199,406			191,837			66,739			60,596
Gross profit		104,070			98,550			219,333			230,130			96,685			74,202
Selling, general, and administrative		78,885			67,479			189,479			183,590
Selling, general and administrative														71,391			60,946
Operating income		25,185			31,071			29,854			46,540			25,294			13,256
Other expense (Note 3)		—			(1,282	)		—			(1,282	)
Non-operating income/(expense):
Other income														83			100
Interest expense		(445	)		(333	)		(1,191	)		(1,039	)		(112	)		(275	)
Interest income		110			45			361			138
Income before income taxes		24,850			29,501			29,024			44,357			25,265			13,081
Provision for income taxes (Note 10)		7,490			9,286			10,341			14,450			6,011			3,330
Net income		17,360			20,215			18,683			29,907			19,254			9,751
Less: Net income attributed to noncontrolling interests		—			—			—			78
Net income attributed to Movado Group, Inc.	$	17,360		$	20,215		$	18,683		$	29,829
Less: Net income attributable to noncontrolling interests														741			342
Net income attributable to Movado Group, Inc.													$	18,513		$	9,409

Basic income per share:
Weighted basic average shares outstanding		23,079			23,055			23,080			23,074			22,840			23,320
Net income per share attributed to Movado Group, Inc.	$	0.75		$	0.88		$	0.81		$	1.29
Net income per share attributable to Movado Group, Inc.													$	0.81		$	0.40

Diluted income per share:
Weighted diluted average shares outstanding		23,273			23,230			23,261			23,259			23,397			23,741
Net income per share attributed to Movado Group, Inc.	$	0.75		$	0.87		$	0.80		$	1.28
Net income per share attributable to Movado Group, Inc.													$	0.79		$	0.40

Dividends declared per share	$	0.13		$	0.13		$	0.39		$	0.39

		Fair Value at October 31, 2017
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	291	$	—	$	—	$	291
Short-term investment	Other current assets		156		—		—		156
SERP assets - employer	Other non-current assets		1,538		—		—		1,538
SERP assets - employee	Other non-current assets		35,532		—		—		35,532
Hedge derivatives	Other current assets		—		67		—		67
Total		$	37,517	$	67	$	—	$	37,584
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	35,532	$	—	$	—	$	35,532
Hedge derivatives	Accrued liabilities		—		685		—		685
Total		$	35,532	$	685	$	—	$	36,217

		Fair Value at January 31, 2017
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	309	$	—	$	—	$	309
Short-term investment	Other current assets		154		—		—		154
SERP assets - employer	Other non-current assets		1,091		—		—		1,091
SERP assets - employee	Other non-current assets		30,831		—		—		30,831
Hedge derivatives	Other current assets		—		145		—		145
Total		$	32,385	$	145	$	—	$	32,530
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	30,831	$	—	$	—	$	30,831
Hedge derivatives	Accrued liabilities		—		211		—		211
Total		$	30,831	$	211	$	—	$	31,042

		Fair Value at October 31, 2016
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	280	$	—	$	—	$	280
Short-term investment	Other current assets		150		—		—		150
SERP assets - employer	Other non-current assets		1,464		—		—		1,464
SERP assets - employee	Other non-current assets		28,495		—		—		28,495
Hedge derivatives	Other current assets		—		141		—		141
Total		$	30,389	$	141	$	—	$	30,530
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	28,495	$	—	$	—	$	28,495
Hedge derivatives	Accrued liabilities		—		391		—		391
Total		$	28,495	$	391	$	—	$	28,886

	Operating Income (3) (4)
	2017		2016
Wholesale	$	22,250	$	28,697
Retail		2,935		2,374
Consolidated total	$	25,185	$	31,071

	Total Assets
	October 31, 2017		January 31, 2017		October 31, 2016
Wholesale	$	633,101	$	584,518	$	600,885
Retail		26,465		23,284		23,593
Consolidated total	$	659,566	$	607,802	$	624,478

	Net Sales				Operating (Loss) / Income (3) (4)
	2017		2016		2017		2016
United States (1)	$	192,325	$	228,734	$	(5,409)	$	12,841
International (2)		226,414		193,233		35,263		33,699
Consolidated total	$	418,739	$	421,967	$	29,854	$	46,540

	Currency Translation Adjustments		Available-for-sale securities			Hedging Contracts			Total
Balance, January 31, 2017	$	76,569	$	197		$	14		$	76,780
Other comprehensive income / (loss) before reclassifications		3,583		(12	)		931			4,502
Amounts reclassified from accumulated other comprehensive income (1)		—		—			(894	)		(894)
Net current-period other comprehensive income / (loss)		3,583		(12	)		37			3,608
As of October 31, 2017	$	80,152	$	185		$	51		$	80,388

	Balance at January 31, 2017		Cash payments			Foreign exchange		Accrued balance at October 31, 2017
Severance	$	78	$	(1	)	$	1	$	78
Occupancy charges		330		(99	)		2		233
Total	$	408	$	(100	)	$	3	$	311

	Fiscal 2018 Charges (2)		Cash payments			Non-cash adjustments			Foreign exchange			Balance in Accrued Liabilities at October 31, 2017
Severance and payroll related (1)	$	6,061	$	(5,276	)	$	(401	)	$	67		$	451
Fixed assets (1)		5,105		—			(5,105	)		—			—
Other (1)		2,172		(73	)		(71	)		(6	)		2,022
Occupancy charges (1)		99		(22	)		—			6			83
Total	$	13,437	$	(5,371	)	$	(5,577	)	$	67		$	2,556

Assets Acquired and Liabilities Assumed	Fair Value
Cash and cash equivalents	$	5,909
Trade receivables, net		3,106
Inventories		4,164
Prepaid expenses and other current assets		913
Property, plant and equipment, net		131
Goodwill		55,322
Trade name and other intangibles		21,415
Total assets acquired		90,960
Accounts payable		608
Accrued liabilities		844
Income taxes payable		643
Deferred and non-current income taxes payable		3,965
Total liabilities assumed		6,060
Total purchase price	$	84,900

		Three Months Ended October 31,				Nine Months Ended October 31,
	2017		2016		2017		2016
(In thousands, except per share data)		(Unaudited)				(Unaudited)
Net sales	$	190,693	$	184,749	$	430,002	$	432,885
Net income	$	18,479	$	21,146	$	24,885	$	30,814

Basic income per share:
Net income per share attributed to Movado Group, Inc.	$	0.80	$	0.92	$	1.08	$	1.34

Diluted income per share:
Net income per share attributed to Movado Group, Inc.	$	0.79	$	0.91	$	1.07	$	1.32

	Total
Balance at January 31, 2017	$	—
Acquisition of the Olivia Burton brand		55,322
Foreign exchange impact		994
Balance at October 31, 2017	$	56,316

	As of
	October 31, 2017
	Gross carrying amount		Accumulated amortization		Foreign exchange		Net
Intangible assets subject to amortization:
Trade name	$	12,766	$	(433)	$	251	$	12,584
Customer relationships		8,598		(486)		168		8,280
Total intangible assets	$	21,364	$	(919)	$	419	$	20,864