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 ~~August 21, 2018~~May 22, 2019 were ~~16,526,932~~16,462,854 and ~~6,623,030,~~6,586,780, respectively.

	July 31,			January 31,			July 31,			April 30,			January 31,			April 30,
	2018			2018			2017			2019			2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	175,583		$	214,811		$	162,417		$	150,712		$	189,911		$	176,959
Trade receivables, net		83,818			83,098			81,513			85,715			84,026			79,965
Inventories		171,417			151,676			176,967			178,048			165,311			159,032
Other current assets		37,852			32,015			31,825			32,631			28,898			36,213
Total current assets		468,670			481,600			452,722			447,106			468,146			452,169
Property, plant and equipment, net		24,533			24,671			31,412			26,065			26,067			23,560
Operating lease right-of-use assets											87,353			—			—
Deferred and non-current income taxes		8,074			6,443			24,924			24,913			24,503			8,157
Goodwill		55,744			60,269			56,116			135,685			136,033			58,484
Other intangibles, net		19,976			23,124			23,184			46,570			48,183			21,720
Other non-current assets		50,251			49,273			45,715			60,969			56,769			48,042
Total assets	$	627,248		$	645,380		$	634,073		$	828,661		$	759,701		$	612,132
LIABILITIES AND EQUITY
Current liabilities:
Loans payable to bank, current	$	—		$	25,000		$	5,000
Accounts payable		34,578			24,364			35,174		$	37,477		$	38,650		$	29,333
Accrued liabilities		50,054			47,943			44,192			44,886			44,429			37,356
Accrued payroll and benefits											7,185			18,773			6,616
Current operating lease liabilities											13,771			—			—
Income taxes payable		5,996			2,989			1,730			8,663			10,831			4,650
Total current liabilities		90,628			100,296			86,096			111,982			112,683			77,955
Loans payable to bank		—			—			25,000			49,060			50,280			—
Deferred and non-current income taxes payable		29,718			33,063			7,759			29,071			29,242			32,998
Non-current operating lease liabilities											79,877			—			—
Other non-current liabilities		43,548			41,686			37,060			65,394			67,120			40,231
Total liabilities		163,894			175,045			155,915			335,384			259,325			151,184
Commitments and contingencies (Note 9)
Redeemable noncontrolling interest											3,636			3,721			—
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; 27,643,809, 27,342,802 and 27,291,230 shares issued and outstanding, respectively		276			273			273
Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,623,030, 6,641,950 and 6,651,950 shares issued and outstanding, respectively		66			66			67
Common Stock, $0.01 par value, 100,000,000 shares authorized; 27,866,510, 27,701,742 and 27,579,421 shares issued and outstanding, respectively											279			277			276
Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,586,780, 6,586,780 and 6,626,950 shares issued and outstanding, respectively											65			65			66
Capital in excess of par value		198,246			189,808			187,852			203,640			201,814			194,792
Retained earnings		396,041			388,739			411,275			430,514			431,180			391,526
Accumulated other comprehensive income		80,402			100,343			85,478			76,337			80,507			85,004
Treasury Stock, 11,117,050, 11,046,671 and 10,972,873 shares, respectively, at cost		(211,677	)		(208,894	)		(206,787	)
Treasury Stock, 11,388,021, 11,268,492 and 11,093,282 shares, respectively, at cost											(221,194	)		(217,188	)		(210,716	)
Total Movado Group, Inc. shareholders' equity		463,354			470,335			478,158			489,641			496,655			460,948
Total liabilities and equity	$	627,248		$	645,380		$	634,073
Total liabilities, redeemable noncontrolling interest and equity										$	828,661		$	759,701		$	612,132

	Three Months Ended July 31,						Six Months Ended July 31,						Three Months Ended April 30,
	2018			2017			2018			2017			2019			2018
Net sales	$	144,093		$	128,781		$	271,242		$	228,046		$	146,549		$	127,149
Cost of sales		66,259			62,655			125,884			112,783			67,676			59,625
Gross profit		77,834			66,126			145,358			115,263			78,873			67,524
Selling, general, and administrative		64,974			57,809			124,359			110,594
Selling, general and administrative														73,899			59,385
Operating income		12,860			8,317			20,999			4,669			4,974			8,139
Interest expense		(162	)		(390	)		(384	)		(746	)		(224	)		(222	)
Interest income		57			129			114			251			21			57
Income before income taxes		12,755			8,056			20,729			4,174			4,771			7,974
Provision for income taxes (Note 10)		3,615			2,574			3,474			2,851
Net income attributed to Movado Group, Inc.	$	9,140		$	5,482		$	17,255		$	1,323
Provision/(benefit) for income taxes (Note 11)														847			(141	)
Net income														3,924			8,115
Less: Net loss attributable to noncontrolling interests														(1	)		—
Net income attributable to Movado Group, Inc.													$	3,925		$	8,115

Basic income per share:
Weighted basic average shares outstanding		23,245			23,085			23,172			23,080			23,119			23,097
Net income per share attributed to Movado Group, Inc.	$	0.39		$	0.24		$	0.74		$	0.06
Net income per share attributable to Movado Group, Inc.													$	0.17		$	0.35

Diluted income per share:
Weighted diluted average shares outstanding		23,712			23,218			23,585			23,253			23,452			23,448
Net income per share attributed to Movado Group, Inc.	$	0.39		$	0.24		$	0.73		$	0.06
Net income per share attributable to Movado Group, Inc.													$	0.17		$	0.35

Dividends declared per share	$	0.20		$	0.13		$	0.40		$	0.26

Three Months Ended July 31,

Six Months Ended July 31,

2018

2017

2018

2017

Comprehensive income, net of taxes:

Net income
$
9,140

$
5,482

$
17,255

$
1,323

Net unrealized gain on investments, net of tax (benefit) of $14,
   $6, $19 and $0, respectively

50

13

64

1

Net change in effective portion of hedging contracts, net of tax
   (benefit) of $(5), $(53), $(20) and $(79), respectively

23

(266
)

(104
)

(411
)
Foreign currency translation adjustments

(4,675
)

10,838

(19,901
)

9,108

Total other comprehensive (loss) / income, net of taxes

(4,602
)

10,585

(19,941
)

8,698

Total comprehensive income / (loss) attributed to
   Movado Group, Inc.
$
4,538

$
16,067

$
(2,686
)

$
10,021

	Three Months Ended April 30,
	2019			2018
Net income	$	3,924		$	8,115
Other comprehensive income / (loss):
Net unrealized gain on investments, net of tax benefit of $0 and $5, respectively		1			14
Net change in effective portion of hedging contracts, net of tax (benefit) of $0 and $(25), respectively		—			(127	)
Amortization of prior service cost, net of tax of $4		13			—
Foreign currency translation adjustments		(4,184	)		(15,226	)
Total other comprehensive loss, net of taxes		(4,170	)		(15,339	)
Less:
Comprehensive income/ (loss) attributable to noncontrolling interest:
Net loss		(1	)		—
Foreign currency translation adjustments		(84	)		—
Total comprehensive loss attributable to noncontrolling interest		(85	)		—
Total comprehensive loss attributable to Movado Group, Inc.	$	(161	)	$	(7,224	)

	Six Months Ended July 31,						Three Months Ended April 30,
	2018			2017			2019			2018
Cash flows from operating activities:
Net income	$	17,255		$	1,323
Adjustments to reconcile net income to net cash (used in) operating activities:
Net income attributable to Movado Group, Inc.							$	3,925		$	8,115
Adjustments to reconcile net income to net cash provided by / (used in) operating activities:
Depreciation and amortization		6,495			6,009			3,872			3,383
Transactional losses / (gains)		287			(444	)
Write-down of inventories		1,113			886
Transactional gains								(232	)		(242	)
Provision for inventories and accounts receivable								531			483
Deferred income taxes		(2,363	)		9			(134	)		(1,553	)
Stock-based compensation		2,823			2,433			1,638			1,214
Cost savings initiative		—			6,419
Other								199			—
Changes in assets and liabilities:
Trade receivables		(4,253	)		(10,267	)		(2,567	)		443
Inventories		(25,415	)		(18,774	)		(14,756	)		(11,548	)
Other current assets		(9,558	)		(2,237	)		(4,134	)		(6,583	)
Accounts payable		10,955			7,102			(896	)		5,690
Accrued liabilities		2,134			911			1,294			5,036
Accrued payroll and benefits								(11,507	)		(8,351	)
Income taxes payable		4,074			(3,090	)		(2,094	)		1,722
Other non-current assets		(1,319	)		(3,250	)		(878	)		988
Other non-current liabilities		1,903			2,948			124			(1,417	)
Net cash provided by / (used in) operating activities		4,131			(10,022	)
Net cash used in operating activities								(25,615	)		(2,620	)
Cash flows from investing activities:
Capital expenditures		(5,060	)		(2,005	)		(2,204	)		(1,686	)
Restricted cash deposits		—			1,018
Trademarks and other intangibles		(217	)		(463	)		(63	)		(168	)
Acquisition, net of cash acquired		—			(78,991	)
Net cash (used in) investing activities		(5,277	)		(80,441	)
Net cash used in investing activities								(2,267	)		(1,854	)
Cash flows from financing activities:
Repayments of bank borrowings		(25,000	)		—			—			(25,000	)
Stock options exercised and other changes		4,825			(733	)
Stock awards and options exercised and other changes								(1,234	)		3,105
Stock repurchase								(2,616	)		(1,186	)
Dividends paid		(9,229	)		(5,967	)		(4,591	)		(4,604	)
Stock repurchase		(2,057	)		(1,655	)
Net cash (used in) financing activities		(31,461	)		(8,355	)
Effect of exchange rate changes on cash , cash equivalents, and restricted cash		(6,621	)		4,956
Net (decrease) in cash, cash equivalents and restricted cash		(39,228	)		(93,862	)
Cash, cash equivalents, and restricted cash at beginning of period		215,411			256,879
Net cash used in financing activities								(8,441	)		(27,685	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash								(2,889	)		(5,693	)
Net decrease in cash, cash equivalents and restricted cash								(39,212	)		(37,852	)
Cash, cash equivalents, and restricted cash at beginning of year								190,459			215,411
Cash, cash equivalents, and restricted cash at end of period	$	176,183		$	163,017		$	151,247		$	177,559

Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents		175,583		$	162,417		$	150,712		$	176,959
Restricted cash included in other non-current assets		600			600			535			600
Cash, cash equivalents, and restricted cash	$	176,183		$	163,017		$	151,247		$	177,559

The accompanying interim unaudited 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 included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2018~~2019 (the ~~“2018~~“2019 Annual Report on Form 10-K”). The unaudited 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 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 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, ~~2018~~2019 is derived from the audited annual financial statements, which are included in the Company’s ~~2018~~2019 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.

As discussed below in Note 2 Accounting Pronouncements Recently Adopted, certain reclassifications were made to prior years’ financial statement amounts and related note disclosures to conform to fiscal 2019 presentation.

~~NOTE 2 –~~ ARECENT ACCOUNTING PRONOUNCEMENTS~~CCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED~~

In ~~May 2014,~~August 2018, the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued ~~Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) which supersedes nearly all existing revenue recognition guidance. Subsequent~~2018-13, “Disclosure Framework—Changes to the ~~issuance of Topic 606,~~Disclosure Requirements for Fair Value Measurement”, which modifies the ~~FASB clarified the guidance through several Accounting Standard Updates; hereinafter the collection of revenue~~disclosure requirements in ASC 820, Fair Value Measurement. This guidance is ~~referred to as “ASC 606”.~~effective for fiscal years beginning after December 15, 2019, which will be the Company’s first quarter of fiscal 2021, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its disclosures.

OnThe Company adopted ASU 2016-02, “Leases”, on February 1, ~~2018,~~2019, the ~~Company adopted ASC 606~~first day of fiscal 2020, using the modified retrospective ~~method~~approach and accordingly the Company ~~recognized~~is showing a ~~reduction~~cumulative effect adjustment in the first quarter of ~~$0.7 million~~fiscal 2020, rather than restating any prior periods. The Company has elected to use the package of practical expedients permitted under the transition guidance, which does not require reassessment of prior conclusions related to contracts containing a lease, lease classification and initial direct costs for any expired or existing leases. The transition practical expedient allows Companies to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than the earliest period presented. The adoption did not result in any adjustments to the opening balance of retained earnings.

Adoption of ASU 2016-02 resulted in recording right-of-use lease assets of $97.0 million which were reduced to $91.1 million as ~~the cumulative effect~~a result of ~~adopting the new revenue standard. This adjustment~~$5.9 million of previously recorded deferred rent liabilities and tenant allowances, and lease liabilities of $97.0 million as of February 1, 2019. The standard did not have a material impact on the ~~Company’s Consolidated Financial Statements. (See~~Company's consolidated results of operations or cash flows. See Note ~~17 - Revenue~~10 – Leases for additional ~~disclosures required by ASC 606).~~

In ~~November 2016,~~August 2017, the FASB issued ASU ~~2016-18, “Statement~~2017-12. ASU 2017-12 amends and simplifies hedge accounting guidance in order to enable entities to better portray the economics of ~~Cash Flows (Topic 230) — Restricted Cash,”~~their risk management activities. The Company adopted ASU 2017-12 on February 1, 2019, the first day of fiscal 2020. The adoption of the standard did not have an impact on the Company's consolidated results of operations.

In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The Company adopted ASU 2018-07 during the first quarter of fiscal 2020. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

The Company presents net income attributable to Movado Group, Inc. after adjusting for redeemable noncontrolling interest, as applicable per share on a basic and diluted basis. Basic earnings per share is computed using weighted-average shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of shares outstanding adjusted for dilutive common stock equivalents.

The number of shares used in calculating basic and diluted earnings (loss) per share is as follows (in thousands):

For the three months ended April 30, 2019 and 2018, approximately 78,000 and 136,000, 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 28, 2019, the Company declared a quarterly cash dividend of $0.20 per share payable on April 24, 2019 to shareholders of record on April 10, 2019. The total dividend of $4.6 million was paid on April 24, 2019. On March 29, 2018, the Company declared a quarterly cash dividend of $0.20 per share payable on April 25, 2018 to shareholders of record on April 11, 2018. The total dividend of $4.6 million was paid on April 25, 2018.

On December 3, 2018, the Company acquired 51% of City Time Distribucion, S.L.U, (“City Time”), the Company’s distributor in Spain, and simultaneously signed a joint venture agreement. The purchase price was $4.8 million, or 4.2 million Euros, net of cash acquired, and was funded with cash on hand. The results of City Time have been included in the consolidated financial statements since the date of acquisition within the International location of the Watch and Accessory Brands segment. Of the total purchase consideration, there were no material amounts allocated to assets acquired and liabilities assumed.

Pursuant to the joint venture agreement, the noncontrolling interest holder has the right to sell its interest in City Time to the Company on two specific dates in the future. The noncontrolling interest is not redeemable until such dates. The Company will adjust the carrying value of the redeemable interest to the redemption amount assuming it was redeemable at the balance sheet date. At April 30, 2019, the Company concluded that the remeasurement adjustment is immaterial.

On October 1, 2018, the Company acquired MVMT Watches, Inc., owner of MVMT, for an initial payment of $100.0 million and two future contingent payments that combined could total up to an additional $100.0 million before tax benefits. The exact amount of the future payments will be determined by MVMT's future financial performance with no minimum required future payment. After giving effect to the closing adjustments, the purchase price was $108.4 million, net of cash acquired of $3.8 million. The acquisition was funded with cash on hand and adds a new brand with significant global growth potential to the Company’s portfolio.

The results of the MVMT brand have been included in the consolidated financial statements since the date of acquisition within the U.S. and International locations of the Watch and Accessory Brands segment.

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.

The following table summarizes the fair value of the assets acquired and liabilities assumed as of the October 1, 2018 acquisition date (in thousands):

Inventories (as of October 1, 2018) included a ~~statement~~step-up adjustment of ~~cash flows explain~~$0.7 million, which was amortized over 5 months. The components of Trade name and other intangibles (as of October 1, 2018) included a trade name of $24.7 million (amortized over 10 years), and customer relationships of $4.2 million (amortized over 10 years).

The acquisition agreement also includes a contingent consideration arrangement based on the ~~change~~MVMT brand achieving certain revenue and EBITDA (as defined in the acquisition agreement) targets. In connection therewith, the Company 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 purchase price and $2.0 million to deferred compensation expense based on future employee service requirements.

The estimated fair value of the contingent consideration was determined using a Monte Carlo simulation that includes key assumptions regarding MVMT’s projected financial performance during the earn-out period, volatilities, estimated discount rates, risk-free interest rate, and correlation. Each reporting period after the acquisition, the Company will revalue the contingent purchase price liability and record increases or decreases in the ~~total~~fair value of ~~cash, cash equivalents,~~the liability in its Consolidated Statements of Operations. Changes in fair value will result from changes in actual and ~~amounts generally described~~projected financial performance, discount rates, volatilities, and the other key assumptions. The inputs and assumptions are not observable in the market but reflect the assumptions the Company believes would be made by a market participant. The possible outcomes for the contingent consideration range from $0 to $100 million on an undiscounted basis.

As of the April 30, 2019 remeasurement date, the contingent purchase price liability has been accreted to $16.9 million. The $0.2 million increase in the liability is included as restricted cash and restricted cash equivalents. With this standard, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconcilinga reduction in operating income in the ~~beginning~~Consolidated Statement of ~~period and end~~Operations for the three months ended April 30, 2019. Refer to Note 7 for further discussion of ~~period total amounts shown~~fair value measurements.

The Company recorded goodwill (as of October 1, 2018) of $77.5 million based on the ~~statement~~amount by which the purchase price exceeded the fair value of ~~cash flows.~~ the net assets acquired. As the structure of the acquisition allowed for a step up in basis for tax purposes, the full amount of goodwill is deductible for federal income tax purposes over 15 years.

The ~~Company adopted this guidance~~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 MVMT brand had been included in the Company’s operations commencing on February 1, 2018, ~~and~~based on available information relating to operations of the ~~guidance has~~MVMT brand. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been ~~retrospectively applied to all periods presented. The changes to~~realized by the Company had the MVMT brand acquisition been consummated at the beginning of the period ~~balances~~for which the pro forma information is presented, or of future results.

The changes in the ~~consolidated statement~~carrying amount of ~~cash flows~~other intangible assets during the three months ended April 30, 2019 are as follows (in thousands):

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:

~~The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands) as of July 31, 2018 and 2017 and January 31, 2018:~~

Fair Value at July 31, 2018

Balance Sheet Location

Level 1

Level 2

Level 3

Total

Assets:

Available-for-sale securities

Other current assets

$
187

$
—

$
—

$
187

Short-term investment

Other current assets

156

—

—

156

SERP assets - employer

Other non-current assets

1,262

—

—

1,262

SERP assets - employee

Other non-current assets

38,970

—

—

38,970

Hedge derivatives

Other current assets

—

161

—

161

Total

$
40,575

$
161

$
—

$
40,736

Liabilities:

SERP liabilities - employee

Other non-current liabilities

$
38,970

$
—

$
—

$
38,970

Hedge derivatives

Accrued liabilities

—

481

—

481

Total

$
38,970

$
481

$
—

$
39,451

Fair Value at January 31, 2018

Balance Sheet Location

Level 1

Level 2

Level 3

Total

Assets:

Available-for-sale securities

Other current assets

$
275

$
—

$
—

$
275

Short-term investment

Other current assets

164

—

—

164

SERP assets - employer

Other non-current assets

994

—

—

994

SERP assets - employee

Other non-current assets

38,577

—

—

38,577

Hedge derivatives

Other current assets

—

544

—

544

Total

$
40,010

$
544

$
—

$
40,554

Liabilities:

SERP liabilities - employee

Other non-current liabilities

$
38,577

$
—

$
—

$
38,577

Hedge derivatives

Accrued liabilities

—

46

—

46

Total

$
38,577

$
46

$
—

$
38,623

Fair Value at July 31, 2017

Balance Sheet Location

Level 1

Level 2

Level 3

Total

Assets:

Available-for-sale securities

Other current assets

$
313

$
—

$
—

$
313

Short-term investment

Other current assets

161

—

—

161

SERP assets - employer

Other non-current assets

1,394

—

—

1,394

SERP assets - employee

Other non-current assets

34,007

—

—

34,007

Hedge derivatives

Other current assets

—

402

—

402

Total

$
35,875

$
402

$
—

$
36,277

Liabilities:

SERP liabilities - employee

Other non-current liabilities

$
34,007

$
—

$
—

$
34,007

Hedge derivatives

Accrued liabilities

—

489

—

489

Total

$
34,007

$
489

$
—

$
34,496

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 components of equity for the six months ended July 31, 2018 and 2017 are as follows (in thousands):~~

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

Total

Balance, January 31, 2018

$
273

$
66

$
189,808

$
388,739

$
(208,894
)

$
100,343

$
470,335

Net income

17,255

17,255

Dividends

(9,229
)

(9,229
)
Adoption of new revenue recognition
   Standard ( Topic 606)

(724
)

(724
)
Stock repurchase

(2,057
)

(2,057
)
Stock options exercised

3

5,548

(726
)

4,825

Supplemental executive
   retirement plan

67

67

Stock-based compensation
   expense

2,823

2,823

Net unrealized gain on
   investments, net of tax
   of $19

64

64

Net change in effective
   portion of hedging contracts,
   net of tax benefit of $20

(104
)

(104
)
Foreign currency translation
   adjustment (3)

$
(19,901
)

$
(19,901
)
Balance, July 31, 2018

$
276

$
66

$
198,246

$
396,041

$
(211,677
)

$
80,402

$
463,354

Common
Stock (1)

Class A
Common
Stock (2)

Capital in
Excess of
Par Value

Retained
Earnings

Treasury
Stock

Accumulated
Other
Comprehensive
Income

Total

Balance, January 31, 2017

$
272

$
66

$
185,354

$
415,919

$
(204,398
)

$
76,780

$
473,993

Net income

1,323

1,323

Dividends

(5,967
)

(5,967
)
Stock repurchase

(1,655
)

(1,655
)
Stock options exercised

1

1

(1
)

(734
)

(733
)
Supplemental executive
   retirement plan

66

66

Stock-based compensation
   expense

2,433

2,433

Net unrealized gain on
   investments, net of
   tax benefit of $0

1

1

Net change in effective
   portion of hedging contracts,
   net of tax of $79

(411
)

(411
)
Foreign currency translation
   adjustment (3)

9,108

9,108

Balance, July 31, 2017

$
273

$
67

$
187,852

$
411,275

$
(206,787
)

$
85,478

$
478,158

	Trade names			Customer relationships			Other (1)			Total
Weighted Average Amortization Period (in years)	10			7			7
Balance at January 31, 2019	$	34,771		$	12,181		$	1,231		$	48,183
Additions		—			—			63			63
Amortization		(938	)		(506	)		(94	)		(1,538	)
Foreign exchange impact		(40	)		(78	)		(20	)		(138	)
Balance at April 30, 2019	$	33,793		$	11,597		$	1,180		$	46,570

~~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 32.1%, 11.2%, 8.8% and 6.9%, respectively, of the Company’s total net sales for the three months ended July 31, 2018. For the three months ended July 31, 2017, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 26.4%, 10.2%, 9.3% and 6.1%, 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 32.3%, 11.0%, 9.6% and 7.4%, respectively, of the Company’s total net sales for the six months ended July 31, 2018. For the six months ended July 31, 2017, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 27.8%, 10.4%, 8.9% and 6.1%, respectively, of the Company’s total net sales.

~~Operating Segment Data for the Three Months Ended July 31, 2018 and 2017 (in thousands):~~

~~Operating Segment Data for the Six Months Ended July 31, 2018 and 2017 (in thousands):~~

~~Geographic Location Data for the Three Months Ended July 31, 2018 and 2017 (in thousands):~~

~~United States and International net sales are net of intercompany sales of $76.5 million and $62.3 million for the three months ended July 31, 2018 and 2017, respectively.~~

~~Geographic Location Data for the Six Months Ended July 31, 2018 and 2017 (in thousands):~~

~~United States and International net sales are net of intercompany sales of $141.1 million and $124.6 million for the six months ended July 31, 2018 and 2017, respectively.~~

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 “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~~amends and restates the Company’s prior credit agreement dated as of January 30, 2015 (the “Prior Credit Agreement”) and extends the maturity of the $100.0 million senior secured revolving credit facility (the “Facility”) ~~including~~provided thereunder to October 12, 2023. 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 ~~July 31,~~April 30, 2019, and April 30, 2018, there were ~~no loans drawn under the Facility. Additionally, approximately $0.3~~50.0 million in ~~letters~~Swiss francs (with a dollar equivalent 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$49.1 million) andzero, respectively, in loans outstanding under the Facility. ~~As of July 31, 2018, availability~~Availability under the Facility was ~~approximately $99.7 million.~~

~~Borrowings under the Facility bear interest at rates selected periodically~~reduced 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). The Company has also agreed to pay certain fees and expenses and to provide certain indemnities, allaggregate number 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 July 31, 2018, 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 July 31, 2018, Bank 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 July 31, 2018,~~Canada, totaling approximately $0.3 million at both April 30, 2019 and April 30, 2018. At April 30, 2019, the ~~Company had outstanding~~ letters of credit ~~totaling $0.3 million with~~have expiration dates through ~~May 31, 2019.~~April 26, 2020. As of April 30, 2019, and April 30, 2018, availability under the Facility was $50.6 million and $99.7 million, respectively.

The Company had weighted average borrowing under the facility of $49.8 million and $7.8 million, with a weighted average interest rate of 1.00% and 0.96%, during the first quarter of fiscal 2020 and 2019, respectively.

A Swiss subsidiary of the Company maintains unsecured lines of credit with an unspecified maturity with a Swiss bank. As of ~~July 31,~~April 30, 2019, and 2018, ~~and 2017,~~ these lines of credit totaled 6.5 million Swiss francs for both periods, with a dollar equivalent of ~~$6.6~~$6.4 million and ~~$6.7~~$6.6 million, respectively. As of ~~July 31,~~April 30, 2019, and 2018, ~~and 2017,~~ there were no borrowings against these lines. As of ~~July 31,~~April 30, 2019, and 2018, 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 and $1.2 million, respectively, in various foreign currencies, of which $0.5 million and $0.6 million, is a restricted deposit as it relates to lease agreements. As of July 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 $1.2 million in various foreign currencies, of which $0.6 million isrespectively, was a restricted deposit as it relates to lease agreements.

Cash paid for interest, including unused commitments fees, was $0.2 million for both April 30, 2019 and April 30, 2018.

As of April 30, 2019, the Company’s entire net forward contracts hedging portfolio consisted of 40.4 million Chinese Yuan equivalent, 31.0 million Swiss francs equivalent, 15.3 million US dollars equivalent, 14.2 million Euros equivalent and 1.9 million British Pounds equivalent with various expiry dates ranging through October 29, 2019. These forward contracts are not designated as qualified hedges in accordance with ASC 815, Derivatives and Hedging, and therefore, 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 Selling, general and administrative expenses in the Consolidated Statements of Operations. The cash flows related to these foreign currency contracts are classified to operating activities.

The ~~Company presents net income per share on a basic~~following table summarizes the fair value and ~~diluted basis. Basic earnings per share are computed using weighted-average shares outstanding during~~presentation in the ~~period. Diluted earnings per share are computed using the weighted-average number of shares outstanding adjusted~~Consolidated Balance Sheets for ~~dilutive common stock equivalents.~~derivatives (in thousands):

The weighted-average number of shares outstanding for basic earnings per share was approximately 23,245,000 and 23,085,000 for the three months ended July 31, 2018 and 2017, respectively. For the three months ended July 31, 2018 and 2017, the number of shares outstanding for diluted earnings per share increased by approximately 467,000 and 133,000, respectively, due to potentially dilutive common stock equivalents issuable under the Company’s stock compensation plans and SERP.

For the ~~three months~~quarter ended ~~July 31, 2018 and 2017, approximately nil and 810,000, respectively, of potentially dilutive common stock equivalents were excluded from~~April 30, 2019, the ~~computation of diluted earnings per share because their effect would~~Company did not have ~~been antidilutive.~~any cash flow hedges.

The weighted-average number of shares outstanding for basic earnings per share was approximately 23,172,000 and 23,080,000 for the six months ended July 31, 2018 and 2017, respectively. For the six months ended July 31, 2018 and 2017, the number of shares outstanding for diluted earnings per share increased by approximately 413,000 and 173,000, respectively, due to potentially dilutive common stock equivalents issuable under the Company’s stock compensation plans and SERP.

For the six months ended July 31, 2018 and 2017, approximately 92,000 and 807,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

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, 2019 and 2018 and January 31, 2019 (in thousands):

		Fair Value at April 30, 2019
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	178	$	—	$	—	$	178
Short-term investment	Other current assets		152		—		—		152
SERP assets - employer	Other non-current assets		978		—		—		978
SERP assets - employee	Other non-current assets		41,268		—		—		41,268
Defined benefit plan assets	Other non-current liabilities		—		—		31,202		31,202
Hedge derivatives	Other current assets		—		8		—		8
Total		$	42,576	$	8	$	31,202	$	73,786
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	41,268	$	—	$	—	$	41,268
Hedge derivatives	Accrued liabilities		—		509		—		509
Contingent purchase price liability	Other non-current liabilities		—		—		16,884		16,884
Total		$	41,268	$	509	$	16,884	$	58,661

		Fair Value at January 31, 2019
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	177	$	—	$	—	$	177
Short-term investment	Other current assets		155		—		—		155
SERP assets - employer	Other non-current assets		860		—		—		860
SERP assets - employee	Other non-current assets		38,170		—		—		38,170
Defined benefit plan assets	Other non-current liabilities		—		—		33,223		33,223
Hedge derivatives	Other current assets		—		22		—		22
Total		$	39,362	$	22	$	33,223	$	72,607
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	38,170	$	—	$	—	$	38,170
Hedge derivatives	Accrued liabilities		—		156		—	$	156
Contingent purchase price liability	Other non-current liabilities		—		—		16,718		16,718
Total		$	38,170	$	156	$	16,718	$	55,044

		Fair Value at April 30, 2018
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	251	$	—	$	—	$	251
Short-term investment	Other current assets		157		—		—		157
SERP assets - employer	Other non-current assets		1,008		—		—		1,008
SERP assets - employee	Other non-current assets		37,210		—		—		37,210
Hedge derivatives	Other current assets		—		124		—		124
Total		$	38,626	$	124	$	—	$	38,750
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	37,210	$	—	$	—	$	37,210
Hedge derivatives	Accrued liabilities		—		704		—		704
Total		$	37,210	$	704	$	—	$	37,914

The Company sponsors a pension plan in Switzerland which was amended to a defined benefit plan effective December 31, 2018. 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 liabilities in the consolidated balance sheets at April 30, 2019 and January 31, 2019.

The fair value of the Level 3 contingent purchase price liability related to the acquisition of MVMT Watches, Inc. owner of MVMT, a global aspirational lifestyle brand, is measured using a Monte Carlo simulation with key assumptions that include revenue and brand EBITDA, (as defined in the acquisition agreement) of the acquired business during the earn-out period, volatilities, estimated discount rates, risk-free rate, and correlation. The liability is revalued each reporting period after the acquisition and increases or decreases in the fair value of the liability are recorded in the Consolidated Statements of Operations. Changes in fair value can result from the estimated achievement of the revenue and brand EBITDA performance hurdles, and movements in discount rates, volatilities, and the other key assumptions. The inputs and assumptions are not observable in the market but reflect the assumptions the Company believes would be made by a market participant.

The following table presents the change in the Level 3 contingent purchase price liability during the three months ended April 30, 2019:

There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

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 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 recorded an obligation of $28.2 million due to ~~the enactment of~~ the Tax Cuts and Jobs Act, (“which was signed into law on December 22, 2017 ~~Tax Act”), the Company estimated~~and imposed a ~~provisional~~one-time mandatory deemed repatriation tax on cumulative undistributed foreign earnings which have not been previously taxed. The obligation, ~~associated with the Transition Tax to be $28.2 million,~~ which ~~will be paid~~was recorded in prior years, is payable in installments over eight ~~years. This provisional amount, as well as~~years, with the ~~current estimated timing~~first payment having been made in the second quarter of ~~payments, is subject to change based on additional guidance from and interpretations by U.S. regulatory and standard-setting bodies and changes in assumptions.~~fiscal 2019.

The Company believes that income tax reserves are ~~adequate;~~adequate, however, amounts asserted by taxing authorities could be greater or less than amounts accrued and reflected in the consolidated balance 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 three months ended July 31, ~~2017,~~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.

On October 23, 2018, Swiss Time Watch & Jewellry GmbH (“ST Germany”) filed a lawsuit against the Company in the Superior Court of California for the County of Los Angeles. The lawsuit, which was subsequently removed to the United States District Court for the Central District of California, primarily alleged that the Company, as legal successor to MVMT Watches, Inc., failed to perform its obligations under the parties’ August 1, 2018 distribution agreement (the “ST Germany Agreement”). Under this agreement, ST Germany was granted the right, subject to certain limitations, to distribute a curated collection of MVMT watch styles in Germany. ST Germany also alleged various related torts and statutory violations and sought specific performance of the ST Germany Agreement as well as unspecified monetary damages. In February 2019, the parties settled the matter and the lawsuit was subsequently dismissed. The settlement terms included an immaterial cash payment by the Company and certain amendments to the ST Germany Agreement, including an extension of the agreement through early fiscal 2023.

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. On February 24, 2017, the Company provided U.S. Customs with supplemental analyses and information supporting the Company’s historical allocation formulas and ~~is in the process of providing~~thereafter provided additional information for U.S. Customs’ review. Although the Company disagrees with U.S. Customs’ position, 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.

The purchase consideration for the MVMT business includes two future contingent payments that combined could total up to $100 million. Although the Company has established appropriate reserves for this liability based on its current estimate of the amounts that will eventually become payable, the exact amount of the future payments will be determined by MVMT's financial performance through the end of fiscal 2023. The Company expects to recognize gains/losses, as the case may be, as the Company’s estimate of the amount payable is updated from time to time. (See Note 4 – Acquisitions).

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 ~~July 31, 2018,~~April 30, 2019, 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.

The Company evaluates contractual arrangements at inception to determine if individual agreements are a lease or contain an identifiable lease component as defined by ASC 842. When evaluating contracts to determine appropriate classification and recognition under ASC 842, significant judgment may be necessary to determine, among other criteria, if an embedded leasing arrangement exists, the length of the term, classification as either an operating or financing lease and whether renewal or termination options are reasonably certain to be exercised. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using the Company’s incremental borrowing rate, adjusted for the lease term and lease country, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and are reduced by lease incentives. Some lease terms include options to extend or terminate the lease and they are included in the measurement of the lease assets and lease liabilities if the Company is reasonably certain that those options will be exercised.

Variable lease payments are generally expensed as incurred and include certain index-based changes in rent and certain non-lease components such as maintenance and other services provided by the lessor to the extent the charges are variable. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term.

The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

The Company leases certain real estate properties, vehicles, and equipment in various countries around the world. Leased properties are typically used for retail, office and distribution. The Company’s leases are classified as operating leases with remaining terms of 1 to 11 years, some of which include an option to extend or renew. If the exercise of an option to extend or renew is determined to be reasonably certain, the associated right-of-use asset and lease liability reflects the extended period and payments.

The following table discloses supplemental balance sheet information for the Company’s leases (in thousands):

The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases:

Future minimum lease payments by year as of April 30, 2019 were as follows (in thousands):

Future minimum lease payments by year as of January 31, 2019 were as follows (in thousands):

Supplemental cash flow information related to leases was as follows (in thousands):

As of April 30, 2019, the Company did not have any material operating or finance leases that have been signed but not commenced.

On December 22, 2017, the 2017 Tax Act was signed into law, which significantly changed U.S. corporate income tax laws by, among other things, lowering the corporate tax rate from 35% to 21%, limiting the deductibility of interest expense and executive compensation, establishing a territorial tax system, and imposing a one-time mandatory deemed Transition Tax on undistributed foreign earnings which have not been previously taxed.

As of July 31, 2018, the amounts recorded in fiscal year 2018 related to the 2017 Tax Act are unchanged and remain provisional for the Transition Tax, the remeasurement of deferred taxes, and our assessment of permanently reinvested earnings. These estimates are subject to revision due to changes in the Company’s analysis and assumptions related to certain matters, such as updates to estimates and amounts related to the earnings and profits and tax pools of certain subsidiaries and the Company’s indefinite reinvestment assertion, including the measurement of deferred taxes on foreign unremitted earnings. The estimated impact of the 2017 Tax Act is also subject to change as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies, as well as state tax conformity to federal tax law. The Company expects to complete its assessment of these items within the measurement period, and any adjustments to the provisional amounts initially recorded will be included as an adjustment to income tax expense or benefit in the period in which the amounts are determined.

The Company continues to evaluate the impact of the global intangible low-tax income (“GILTI”) provision within the 2017 Tax Act which would require the current inclusion in federal taxable income, earnings of certain foreign controlled corporations. GILTI is subject to continuing regulatory interpretation by the U.S. Internal Revenue Service (“IRS”) and while the Company has included an estimate of GILTI in its estimated effective tax rate for fiscal year 2019, it has not yet elected a policy as to whether it will recognize deferred taxes for basis differences expected to reverse as GILTI or whether the Company will account for GILTI as period costs if and when incurred. Adjustments related to the amount of GILTI recorded in its consolidated financial statements may be required based on the outcome of this election. The Company will continue to evaluate these provisions and elect an accounting policy within the measurement period.

The Company recorded income tax expense of ~~$3.6~~$0.8 million and ~~$2.6~~income tax benefit $0.1 million for the three months ended ~~July 31,~~April 30, 2019 and 2018, ~~and 2017,~~ respectively.

The effective tax rate was ~~28.3%~~17.7% and ~~32.0%~~-1.8% for the three months ended ~~July 31,~~April 30, 2019 and 2018, ~~and 2017,~~ respectively. The change in the effective tax rate was primarily due to ~~changes in jurisdictional earnings, partially offset by no~~ ~~tax benefit being recognized on losses incurred by certain foreign operations.~~

~~The Company recorded income tax expense of $3.5 million and $2.9 million for the six months ended July 31, 2018 and 2017, respectively.~~

The effective tax rate was 16.8% and 68.3% for the six months ended July 31, 2018 and 2017, respectively. The change in the effective tax rate was primarily due to excess tax benefits related to stock-based compensation being recognized in the current period as compared to excess tax deficiencies recognized in the first quarter of last year, the release of a valuation ~~allowance~~allowances against certain foreign deferred tax assets ~~and changes~~ in ~~jurisdictional earnings.~~the prior year.

The effective tax rate for the three months ended ~~July 31, 2018~~April 30, 2019 differs from the U.S. statutory tax rate of 21.0% primarily due to no ~~tax benefit being recognized on losses incurred by certain foreign operations, partially offset by~~ foreign profits being taxed in lower taxing jurisdictions. and excess tax benefits related to stock-based compensation, partially offset by no tax benefit being recognized on operating results of certain foreign subsidiaries.

The effective tax rate for the ~~six~~three months ended ~~July 31,~~April 30, 2018 differs from the U.S. statutory tax rate of 21.0% primarily due to the release of a valuation allowance against certain foreign deferred tax assets and ~~foreign profits being taxed~~a decrease in ~~lower taxing jurisdictions.~~the deferred withholding tax liability on unremitted earnings resulting from changes in currency exchange rates.

The ~~effective tax rate~~components of equity for the three ~~and six~~ months ended ~~July~~April 30, 2019 and 2018 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			Total Movado Group, Inc. Shareholders' Equity			Redeemable Noncontrolling Interest
Balance, January 31, 2019	$	—	$	277	$	65	$	201,814	$	431,180		$	80,507		$	(217,188	)	$	496,655		$	3,721
Net income/ (loss) attributable to Movado Group, Inc.										3,925									3,925			(1	)
Dividends ($0.20 per share)										(4,591	)								(4,591	)
Stock repurchase																(2,616	)		(2,616	)
Stock options exercised				2				154								(1,390	)		(1,234	)
Supplemental executive retirement plan								34											34
Stock-based compensation expense								1,638											1,638
Net unrealized gain on investments, net of tax benefit													1						1
Amortization of prior service cost, net of tax provision of $4													13						13
Foreign currency translation adjustment (3)												$	(4,184	)					(4,184	)	$	(84	)
Balance, April 30, 2019	$	—	$	279	$	65	$	203,640	$	430,514		$	76,337		$	(221,194	)	$	489,641		$	3,636

	Preferred Stock		Common Stock (1)		Class A Common Stock (2)		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Total Movado Group, Inc. Shareholders' Equity			Redeemable Noncontrolling Interest
Balance, January 31, 2018	$	—	$	273	$	66	$	189,808	$	388,739		$	100,343		$	(208,894	)	$	470,335		$	—
Net income attributable to Movado Group, Inc.										8,115									8,115
Dividends ($0.20 per share)										(4,604	)								(4,604	)
Adoption of new revenue recognition Standard (Topic 606)										(724	)								(724	)
Stock repurchase																(1,186	)		(1,186	)
Stock options exercised				3				3,738								(636	)		3,105
Supplemental executive retirement plan								32											32
Stock-based compensation expense								1,214											1,214
Net unrealized gain on investments, net of tax $5													14						14
Net change in effective portion of hedging contracts, net of tax of benefit of $25													(127	)					(127	)
Foreign currency translation adjustment (3)													(15,226	)					(15,226	)
Balance, April 30, 2018	$	—	$	276	$	66	$	194,792	$	391,526		$	85,004		$	(210,716	)	$	460,948		$	—

On August 29, 2017, the Board 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 program had replaced a prior share repurchase program approved by the Board on March 31, ~~2017 differs~~2016 under which the Company was authorized to purchase up to $50.0 million of its outstanding common stock from time to time and under which $5.5 million had been repurchased. Under the ~~U.S. statutory tax rate~~existing program, the company may purchase shares of 35.0% primarily due to foreign profits being taxed in lower taxing jurisdictions and acquisition costs related to the acquisition of the Olivia Burton brand (see Note 16 – Acquisitions for additional disclosures). The effective tax rate for the six months ended July 31, 2017 also includes an increase primarily due to the adoption of ASU 2016-09 and ~~no tax benefit being recognized~~its common stock through open market purchases, repurchase plans, block trades or otherwise. This authorization expires on ~~losses incurred by certain foreign operations.~~August 29, 2020.

During the three months ended April 30, 2019, under the existing repurchase program, the Company repurchased a total of 78,402 shares of its common stock at a total cost of $2.6 million, or an average of $33.36 per share. During the three months ended April 30, 2018, under the existing repurchase program, the Company repurchased a total of 30,500 shares of its common stock at a total cost of $1.2 million, or an average of $38.91 per share.

~~As of July 31, 2018,~~At April 30, 2019, $38.0 million remains available for purchase under the Company’s ~~entire net forward contracts hedging portfolio consisted~~current repurchase program.

There were 42,127 and 16,111 shares of ~~30.0 million Swiss francs equivalent, 11.5 million Euros equivalent~~common stock repurchased during the three months ended April 30, 2019 and ~~0.8 million British Pounds equivalent~~,2018, respectively, as a result of the surrender of shares in connection with ~~various expiry dates ranging through January 1, 2019.~~

~~The following table summarizes~~ the ~~fair value and presentation in~~vesting of certain stock awards. At the ~~Consolidated Balance Sheets for derivatives (in thousands):~~

As of July 31, 2018 and 2017, the balance of deferred net gains on derivative financial instruments documented as cash flow hedges included in accumulated other comprehensive income (“AOCI”) was $0.1 and $0.4 million, net of tax benefitelection of an ~~immaterial amount and $0.1 million, respectively. The maximum length of time~~employee, shares having an aggregate value on the ~~Company hedges its exposure~~vesting date equal to the ~~fluctuation in future cash flows for forecasted transactions is 24 months. For~~employee’s withholding tax obligation may be surrendered to the three and six months ended July 31, 2018, the Company reclassified from AOCI to earnings $0.3 million of net gain, net of tax benefit of $0.1 for both periods, respectively. For the three and six months ended July 31, 2017, the Company reclassified from AOCI to earnings $0.4 million of net loss, net of tax benefit of $0.1 million, for both periods, respectively. Company.

~~The components of accumulated other comprehensive income consisted of the following (in thousands):~~

On August 29, 2017, the Board 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, and replaced a prior share repurchase program approved by the Board on March 31, 2016 under which the Company was authorized to purchase up to $50.0 million of its outstanding common stock from time to time and under which approximately $5.5 million had been repurchased. During the six months ended July 31, 2018, under the new share repurchase program, the Company repurchased a total of 52,400 shares of its common stock at a total cost of approximately $2.1 million, or an average of $39.25 per share. During the six months ended July 31, 2017, under the previous share repurchase program, the Company repurchased a total of 71,507 shares of its common stock at a total cost of approximately $1.7 million or an average cost of $23.15 per share, which included 20,000 shares repurchased from the Movado Group Foundation at a total cost of approximately $0.5 million or an average of $22.90 per share.

There were 17,979 and 32,045 shares of common stock repurchased during the six months ended July 31, 2018 and 2017, 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 – ~~RECENT ACCOUNTING PRONOUNCEMENTS~~ACCUMULATED OTHER COMPREHENSIVE INCOME

~~On August 28, 2017, FASB issued ASU 2017-12, “Derivatives~~The accumulated balances at April 30, 2019 and ~~Hedging: Targeted Improvements to Accounting for Hedging Activities,” which expands an entity’s ability to apply hedge accounting for nonfinancial~~2018, 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 June 20, 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. 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.

As a result of actions taken by the Company in 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 $13.6 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.

~~A summary roll-forward of costs~~January 31, 2019, related to ~~the cost savings initiatives is~~each component of accumulated other comprehensive income (loss) are as follows (in thousands):

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 JLB Brands Ltd.’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 locations of the Wholesale segment, for the three and six months ended July 31, 2018, operating income included $0.7 million and $1.5 million, respectively, of expenses primarily related to the amortization of acquired intangible assets, as a result of the Company’s acquisition of the Olivia Burton brand.

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.

~~The operating results of the Olivia Burton brand have been included in the Company’s Consolidated Financial Statements beginning July 3, 2017.~~

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, 2017, 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.

~~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):~~

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

Estimated amortization expense for the next five years is: $1.4 million for the remaining six months of fiscal 2019, $12.8 million in fiscal years 2020 through 2024 and $4.4 million in total in the years thereafter at prevailing foreign exchange rates.

~~In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09,~~Disaggregation of Revenue from Contracts with Customers (Topic 606) which supersedes nearly all existing revenue recognition guidance. Subsequent to the issuance of Topic 606, the FASB clarified the guidance through several Accounting Standard Updates; hereinafter the collection of revenue guidance is referred to as ~~“ASC 606”.~~

On February 1, 2018, the Company adopted ASC 606 using the modified retrospective method and recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening retained earnings.

Under the modified retrospective method, the Company recognized a reduction of $0.7 million to opening retained earnings as the cumulative effect of adopting the new revenue standard. This adjustment did not have a material impact on the Company’s Consolidated Financial Statements. Results for reporting periods beginning after February 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted.

The impact of the adoption of the standard on the Company’s July 31, 2018 Consolidated Balance Sheet and for the three and six months ended July 31, 2018 Consolidated Statement of Operations were as follows (in thousands):

~~The above adoption impact relates principally to timing of the recognition of markdowns and returns in the wholesale segment.~~

As presented in the disaggregated revenue table below, wholesale revenue is recognized and recorded when a contract is in place, obligations under the terms of a contract with the customer are satisfied, control is transferred to the customer and is measured as the ultimate amount of consideration the Company expects to receive in exchange for transferring goods including variable consideration. Direct to consumer and after-sales service revenue is recognized at time of register receipt or delivery to customer. The Company records estimates of variable consideration, which includes sales returns, markdowns, volume-based programs and sales and cash discount allowances as a reduction of revenue in the same period that the sales are recorded. These estimates are based upon the expected value method considering all reasonably available information including historical analysis, customer agreements and/or currently known factors that arise in the normal course of business. Returns, discounts and allowances have historically been within the Company’s expectations and the provisions established. The future provisional rates may differ from those experienced in the past. The Company considers transfer of control to take place either when the goods ship or when goods are delivered depending on the shipping terms in the contract. Factors considered in the transfer of control include the right to payment, transfer of legal title, physical possession and customer acceptance of the goods and whether the significant risks and rewards for the goods belong with the customer. Taxes imposed by governmental authorities on the Company's revenue-producing activities with customers, such as sales taxes and value added taxes, are excluded from net sales.

The Company’s sale of smart watches contains multiple performance obligations. The Company allocates revenue to each performance obligation using the relative standalone selling price method. The Company determines the standalone selling prices based on the prices charged to customers. Amounts allocated to the delivered smart watch collections and the related essential software are recognized at the time of sale. Amounts allocated to the cloud service and app updates are deferred and recognized on a straight-line basis over the estimated two-year period the updates are expected to be provided. The Company’s smart watch collections were available in limited quantities and in limited distribution, and, as a result, these deferred amounts were immaterial to all periods presented.

The Company has considered each transaction to sell goods as separate and distinct, with no additional promises made. The Company uses the understanding of what the customer expects to receive as the final product to determine whether goods or services should be combined and accounted for as a single performance obligation. The Company does not incur significant costs to obtain or fulfill its contracts.

The Company does not consider the effects of a financing component for contracts because the length of time is one year or less, between when the Company transfers goods and when the customer is expected to pay.

The Company’s shipping costs are sometimes paid by the customer, while other times, the shipping costs are included in the sales price for the watches. The Company does not deem shipping as a promised service to the customer because shipping is a fulfillment activity as part of the sale of goods.

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).

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 517 – Segment and Geographic Information).

The Company’s wholesale revenue consists primarily of revenues from independent distributors, and from department stores, and chain and independent jewelry stores. 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. Wholesale revenue is measured as the amount of consideration the Company ultimately expects to receive in exchange for transferring goods. Wholesale revenue is included entirely within the ~~Wholesale~~Watch and Accessory Brands Segment (see Note 517 – Segment and Geographic Information), consistent with how management makes decisions regarding the allocation of resources and performance measurement.

The Company’s direct to consumer revenue primarily consists of revenues from the Company’s outlet stores, concession stores, ecommerce, and consumer repairs. Revenue is recognized as the end consumer obtains delivery of the merchandise. Direct to Consumer revenue derived from concession stores and ecommerce is included within the ~~Wholesale~~Watch and Accessory Brands Segment; revenue derived from outlet stores is included within the ~~Retail~~Company Stores Segment (see Note 517 – Segment and Geographic Information). Direct to Consumer revenue is ~~determined based on the type of customer and may be~~ included in either the ~~Wholesale~~Watch and Accessory Brands or ~~Retail~~Company Stores Segments based on how the Company makes decisions about the allocation of resources and performance measurement.

All watches sold by the Company come with limited warranties covering the movement against defects in ~~material~~materials and workmanship. The Company does not sell warranties separately.

The Company’s after-sales service revenues consists of out of warranty service provided to ~~wholesale~~ 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 and~~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, ~~are~~is included entirely within the ~~Wholesale~~Watch and Accessory Brands Segment, consistent with how management makes decisions about the allocation of resources and performance measurement.

~~NOTE 18 – SUBSEQUENT EVENT~~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 consists of four of the 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 common stock.

Stock options granted to participants under the plan generally became exercisable in equal installments over three years or cliff-vested after 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 or greater than the fair market value of the Company’s common stock on the grant date.

The fair value of the 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, 2019 and April 30, 2018 was $0.2 million (net of tax of $0.1 million) and $0.4 million (net of tax of $0.1 million), respectively. As of April 30, 2019, there was $0.4 million of unrecognized compensation cost related to unvested stock options. Total consideration received for stock option exercises during the three months ended April 30, 2019, and 2018 was $0.2 million, and $3.7 million, respectively.

The following table summarizes the Company’s stock options activity during the first quarter of fiscal 2020:

The fair value of stock options exercised during the first quarter of fiscal 2020 was approximately $63,000 and the intrinsic value was approximately $47,000

Under the Plan, the Company ~~announced that it has entered into a definitive agreement~~can also grant stock awards to ~~acquire MVMT Watches Inc.,~~employees. For the ~~owner of MVMT ("MVMT"), a global aspirational lifestyle brand. The purchase price is comprised of an initial payment of approximately $100~~three months ended April 30, 2019 and April 30, 2018, compensation expense for stock awards was $1.1 million ~~or approximately $85 million net~~(net of tax ~~benefits that~~of $0.3 million), and $1.1 million (net of tax of $0.4 million), respectively. As of April 30, 2019, there was $13.1 million of unrecognized compensation cost related to unvested stock awards.

The following table summarizes the Company’s stock awards activity during the first quarter of fiscal 2020:

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 ~~anticipated to be generated~~issued from the ~~acquisition, and two future contingent payments that combined could total up~~pool of authorized shares. For performance-based stock awards the number of shares issued related to ~~an additional $100 million before tax benefits. The exact amount~~the performance units granted can vary from 0% to 150% of the ~~future payments will be determined by MVMT's future financial performance with no minimum required future payment. The acquisition will be funded through cash and borrowings under~~target number of underlying stock award units, depending on the ~~Company's revolving credit facility. The purchase price will be subject to working capital and other closing adjustments. The closing~~extent of the ~~acquisition is subject~~achievement of predetermined financial goals. The total fair value of stock award units that vested during the first quarter of fiscal 2020 was $4.7 million. The number of shares issued related to ~~customary closing conditions, and is expected to close on or about October 1, 2018.~~ the remaining stock awards are established at grant date.

The Company conducts its business in two operating segments: Watch and Accessory Brands and Company Stores. The Company’s Watch and Accessory Brands 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 Company Stores 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 Middle East, the Americas (excluding the United States) and Asia accounted for 34.2%, 9.1%, 8.7% and 7.7%, respectively, of the Company’s total net sales for the three months ended April 30, 2019. For the three months ended April 30, 2018, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 32.5%, 10.8%, 10.4% and 7.9%, respectively, of the Company’s total net sales.

Operating Segment Data as of and for the Three Months Ended April 30, 2019 and 2018 (in thousands):

Geographic Location Data as of and for the Three Months Ended April 30, 2019 and 2018 (in thousands):

The United States and International net sales are net of intercompany sales of $77.9 million and $64.6 million for the three months ended April 30, 2019 and 2018, respectively.

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

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, 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: ~~the satisfaction of the conditions to the closing of the Company’s pending acquisition of MVMT Watches Inc.,~~ general economic and business conditions, which may impact disposable income of consumers in the United States and the other significant markets (including Europe) where the Company’s products are sold, uncertainty regarding such economic and business conditions, trends in consumer debt levels and bad debt write-offs, general uncertainty related to possible terrorist attacks, natural disasters, the stability of the European Union (including the impact of the ~~June 23, 2016 referendum advising that the~~ United ~~Kingdom~~Kingdom’s process to exit from the European Union) and defaults on or downgrades of sovereign debt and the impact of any of those events on consumer spending, changes in consumer preferences and popularity of particular designs, new product development and introduction, decrease in mall traffic and increase in e-commerce, the ability of the Company to successfully implement its business strategies, competitive products and pricing, the impact of “smart” watches and other wearable tech products on the traditional watch market, seasonality, availability of alternative sources of supply in the case of the loss of any significant supplier or any supplier’s inability to fulfill the Company’s orders, the loss of or curtailed sales to significant customers, the Company’s dependence on key employees and officers, the ability to successfully integrate the operations of acquired businesses (including the Olivia Burton and MVMT brands) without disruption to other business activities, the possible impairment of acquired intangible assets including goodwill if the carrying value of any reporting unit were to exceed its fair value, the continuation of the company’s major warehouse and distribution centers, the continuation of licensing arrangements with third parties, losses possible from pending or future litigation, the ability to secure and protect trademarks, patents and other intellectual property rights, the ability to lease new stores on suitable terms in desired markets and to complete construction on a timely basis, the ability of the Company to successfully manage its expenses on a continuing basis, information systems failure or breaches of network security, the continued availability to the Company of financing and credit on favorable terms, business disruptions, ~~disease,~~ general risks associated with doing business outside the United States including, without limitation, import duties, 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 ~~2018~~2019 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.

The ~~preparation of~~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. 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 most critical accounting policies have been discussed in the Company’s ~~2018~~2019 Annual Report on Form 10-K and are incorporated by reference herein.

Under the MVMT acquisition agreement, the estimated fair value of the contingent consideration was determined using a Monte Carlo simulation with key assumptions that include revenue and brand EBITDA of the acquired business during the earn-out period, volatilities, estimated discount rates, risk-free rate, and correlation (see Note 4 – Acquisitions).

See Note 2 – Accounting Pronouncements Recently Adopted for updates to the critical accounting policies disclosed in the Company’s ~~2018~~2019 Annual Report on Form 10-K.

On August 15, 2018, the Company announced that on that date it entered into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which it expects to acquire all of the outstanding equity interests of MVMT Watches Inc. (“MVMT”) upon the terms and subject to the conditions contained therein. The purchase price is comprised of an initial payment of $100 million, subject to adjustments for cash, debt and working capital, and up to an additional $100 million in earnout payments. The acquisition will be funded through cash and borrowings under the Company’s revolving credit facility. The Purchase Agreement contains customary representations, warranties and covenants of the Company, MVMT and the selling shareholders, as well as an agreement by MVMT’s founders not to compete with MVMT in certain lines of business or solicit MVMT’s employees or customers, in each case for a period of five years following the closing date. The acquisition is expected to close on or about October 1, 2018, subject to customary closing conditions, and there can be no assurance that the acquisition will close on the terms anticipated or at all. The Purchase Agreement contains customary termination provisions, including provisions giving the Company and the sellers the right to terminate the Purchase Agreement if the transaction has not been consummated by November 1, 2018. The foregoing description of the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the disclosure in the Company’s Form 8-K filed on August 15, 2018 and the full text of the Purchase Agreement, which will be attached as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending October 31, 2018.

~~On August 29, 2018,~~May 30, 2019, the Board of Directors approved the payment of a cash dividend in the amount of $0.20 for each share of the Company’s outstanding common stock and class A common stock. The dividend will be paid on ~~September~~June 25, ~~2018~~2019 to all shareholders of record as of the close of business on ~~September~~June 11, ~~2018.~~2019. 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.

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 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.~~locations 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.

The Company divides its watch business into two principal categories: the owned brands category and the licensed brands category. The owned brands category consists of the Movado®, Ebel®, Concord®, Olivia Burton®~~, Ebel®,~~ and ~~Concord®~~MVMT® brands. Watches in the licensed brands category include the following brands manufactured and distributed under license agreements with the respective brand owners: Coach®, Tommy Hilfiger®, HUGO BOSS®, Lacoste®~~, Tommy Hilfiger®~~, SCUDERIA FERRARI® and Rebecca Minkoff® and Uri Minkoff®.

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 the impact of royalty payments made on the licensed brands. 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.

Results of operations for the three months ended ~~July 31, 2018~~April 30, 2019 as compared to the three months ended ~~July 31, 2017~~April 30, 2018

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

Net sales for the three months ended ~~July 31, 2018~~April 30, 2019 were ~~$144.1~~$146.5 million, $19.4 million or 15.3% above the prior year ~~period by $15.3 million or 11.9% which included an unfavorable impact of $1.1 million, as a result of adoption of ASC 606.~~period. For the three months ended ~~July 31, 2018,~~April 30, 2019, fluctuations in foreign currency exchange rates ~~favorably~~negatively impacted net sales by ~~$1.8~~$4.7 million when compared to the prior ~~year period.~~year.

Net sales for the three months ended ~~July 31, 2018~~April 30, 2019 in the ~~Wholesale~~Watch and Accessory Brands segment were ~~$123.1~~$131.5 million, above the prior year period by ~~$12.1~~$19.4 million or ~~10.9 %.~~17.3%. The increase in net sales was ~~primarily the result of an increase~~attributable to increases in net sales in both the International ~~Wholesale segment partially offset by a decrease in the~~and United States ~~Wholesale~~locations of the Watch and Accessory Brands segment.

Net sales for the three months ended ~~July 31, 2018~~April 30, 2019 in the United States location of the ~~Wholesale~~Watch and Accessory Brands segment were ~~$38.2~~$44.7 million, ~~below~~above the prior year period by ~~$5.9~~$10.9 million or ~~13.3%~~32.2%, resulting ~~principally~~ from a net sales ~~decrease~~increase in both the owned and licensed ~~brands category. The net sales decrease recorded in the licensed brands category was $4.7 million, or 44.1% as the U.S. fashion watch market continues to be challenging.~~brand categories. The net sales recorded in the owned brands category ~~were lower than the comparable period~~increased by ~~$0.3~~$6.9 million, or ~~0.8%~~27.9%, primarily due to sales attributable to the addition of the MVMT brand and increased sales in the Company’s e-commerce business. The net sales in the licensed brands category increased $2.7 million, or 41.0%.

Net sales for the three months ended ~~July 31, 2018~~April 30, 2019 in the International location of the ~~Wholesale~~Watch and Accessory Brands segment were ~~$84.9~~$86.8 million, above the prior year by ~~$17.9~~$8.5 million or ~~26.8%~~10.9%, which included fluctuations in foreign currency exchange rates which ~~favorably~~unfavorably impacted net sales by ~~$1.8~~$4.7 million when compared to the prior ~~year period.~~year. This increase was driven by net sales increases in both the licensed brands and owned brands categories. The net sales increase in the licensed brands category was ~~$11.9~~$4.3 million, or ~~23.1%~~7.2%, primarily due to net sales increases in Europe, Asia and Latin America. The net sales increase recorded in the owned brands category was ~~$5.5~~$3.5 million, or ~~37.0%, primarily~~20.4% and is due to sales increases primarily in ~~Europe.~~Europe, Asia and the Middle East. The net sales increase in the owned brands category also included sales attributable to the addition of the ~~Olivia Burton~~MVMT brand.

Net sales for the three months ended ~~July 31, 2018~~April 30, 2019 in the ~~Retail~~Company Stores segment ~~were $21.0 million, above~~was relatively flat in comparison to the prior year period ~~by $3.2 million, or 18.3%, driven by higher~~at $15.0 million. Although the conversion rate remained strong as products continue to resonate well with customers, net sales in ~~both~~ comparable stores decreased primarily as a result of the closure of two stores for renovation during the current quarter. This decrease was offset by the addition of new store ~~openings, and a favorable product mix. The Retail segment experienced higher conversion rates as products resonated well with customers.~~openings. As of ~~July 31,~~April 30, 2019, and 2018, ~~and 2017,~~ the Company operated 4344 and 40 retail outlet locations, respectively.

Gross profit for the three months ended ~~July 31, 2018~~April 30, 2019 was ~~$77.8~~$78.9 million or ~~54.0%~~53.8% of net sales as compared to ~~$66.1~~$67.5 million or ~~51.4%~~53.1% of net sales in the prior ~~year period.~~year. The increase in gross profit of ~~$11.7~~$11.4 million was primarily due to higher net sales and a higher gross margin percentage. The increase in the gross margin percentage of approximately ~~270~~70 basis points for the three months ended ~~July 31, 2018,~~April 30, 2019 resulted primarily from the favorable impact of sales mix of approximately ~~200~~120 basis points ~~the impact of fluctuations in foreign currency exchange rates of approximately 30 basis points,~~and the increased leveraging of certain fixed costs as a result of higher sales of approximately 2040 basis points ~~and~~partially offset by the ~~non-recurrence~~negative impact of ~~the amortization of the inventory step-up adjustment related to the acquisition of the Olivia Burton brand~~fluctuations in foreign currency exchange rates of approximately 20110 basis points.

SG&A expenses for the three months ended ~~July 31, 2018~~April 30, 2019 were ~~$65.0~~$73.9 million, representing an increase from the prior year period of ~~$7.2~~$14.5 million or ~~12.4%~~24.4%. The increase in SG&A expenses was attributable to higher marketing expenses of ~~$4.6~~$7.1 million ~~consulting and legal costs~~due primarily to the addition of ~~$1.7~~MVMT; an increase in payroll related expenses of $3.4 million ~~principally associated with~~primarily as a result of the ~~pending~~ acquisition of ~~the~~ MVMT ~~brand, higher distribution costs of $1.2 million, payroll~~ and ~~performance based compensation of $2.4 million, $0.8 million of payroll and occupancy costs associated with~~ the opening of new ~~retail outlet locations~~company stores; higher rent and ~~$0.8~~related expenses of $1.4 million as a result of new company store openings, expansion of one of the Company’s distribution centers and the addition of MVMT; an increase of $1.3 million in expenses related to the amortization of intangible assets and deferred compensation of MVMT; $1.1 million of ~~bad debt expense principally due~~expenses related to its new joint venture in Spain; and $0.6 million of additional costs related to an annual sales and marketing event for its wholesale customers worldwide. The increases were partially offset by the ~~non-recurrence of a $0.8 million customer recovery in the comparable period in the prior year. SG&A expenses also included the unfavorable~~favorable effect of foreign currency translation and transaction losses of $1.4 principally related to the non-recurrence of $0.9 million of transactional gains in the comparable period in the prior year. These increases were partially offset by a $2.8 million reduction in selling expenses due principally to the Company’s decision to not participate in the Basel Fair in the current year and the non-recurrence of $4.2 million ofon SG&A expenses related to the ~~acquisition~~foreign subsidiaries of ~~the Olivia Burton brand in the prior year, partially offset by $0.7 million of intangible amortization incurred in~~$1.1 million.

~~Wholesale Operating Income.~~ ~~In the three months ended July 31,~~April 30, 2019 and 2018, ~~and 2017, respectively,~~ the Company recorded ~~Wholesale~~Watch and Accessory Brands segment operating income of ~~$8.2~~$3.1 million and ~~$4.8~~$6.4 million, which includes ~~$10.6~~$9.0 million and ~~$7.2~~$10.1 million of unallocated corporate expenses as well as ~~$11.3~~$13.0 million and ~~$7.9~~$11.0 million, respectively, of certain intercompany profits related to the Company’s supply chain operations. The ~~$3.4~~$3.3 million ~~increase~~decrease in operating income was the ~~net~~ result of a higher SG&A expenses of $14.0 million, partially offset by an increase in gross profit of ~~$9.5~~$10.7 million when compared to the prior ~~year period, partially offset by~~year. The increase in gross profit was the result of higher ~~SG&A expenses of $6.1 million, as detailed above.~~gross margin percentage and higher sales. The increase in SG&A expenses was primarily attributable to higher marketing expenses of ~~$4.6 million, consulting and legal costs~~$7.1 million; an increase in payroll related of ~~$1.7 million principally associated with the pending acquisition of the MVMT brand,~~$3.3 million; higher ~~distribution costs~~rent related expenses of $1.2 million; an increase of $1.3 million ~~payroll, and performance based compensation of $2.4 million and $0.8 million of bad debt expense principally due to the non-recurrence of a customer recovery~~ in ~~the comparable period in the prior year. SG&A~~ expenses ~~also included the unfavorable effect of foreign currency translation and transaction losses of $1.4 principally~~ related to the ~~non-recurrence~~amortization of ~~$0.9 million~~intangible assets and deferred compensation of transactional gains in the comparable period in the prior year. These increases were partially offset by a $2.8 million reduction in selling expenses due principally to the Company’s decision to not participate in the Basel Fair in the current yearMVMT; and ~~the non-recurrence of $4.2~~$1.1 million of expenses related to the ~~acquisition of the Olivia Burton brand~~Company’s new joint venture in ~~the prior year, partially offset by $0.7~~Spain and $0.6 million of ~~intangible amortization incurred in~~additional costs related to an annual sales and marketing event for its wholesale customers worldwide. For the three months ended ~~July 31, 2018.~~April 30, 2019 fluctuations in foreign currency exchange rates negatively impacted Watch and Accessory Brands segment operating income by $1.4 million when compared to the prior year.

In the United States location of the ~~Wholesale~~Watch and Accessory Brands segment, ~~during~~for the three months ended ~~July 31,~~April 30, 2019 and 2018, ~~and 2017, respectively,~~ the Company recorded an operating loss of ~~$6.8~~$10.8 million and ~~$2.1~~$7.7 million, respectively, which ~~included~~includes unallocated corporate expenses of ~~$10.6~~$9.0 million and ~~$7.2~~$10.1 million. The increase in operating loss of ~~$4.7~~$3.1 million was the ~~net~~ result of ~~lower gross profit of $1.0 million and~~ higher SG&A expenses of ~~$3.7~~$9.9 million, partially offset by higher gross profit of $6.8 million. The ~~decrease~~increase in gross profit of ~~$1.0~~$6.8 million was due to ~~lower net~~higher sales ~~partially offset by~~of $10.9 million and a higher gross margin percentage. The increase in SG&A expenses of ~~$3.7~~$9.9 million was primarily attributable to ~~increased consulting and legal costs of $2.1 million principally associated with the pending acquisition of the MVMT brand, higher distribution costs of $0.5 million, and~~ higher marketing costs of ~~$0.6 million.~~$5.5 million, an increase of $1.3 million in expenses related to the amortization of intangible assets and deferred compensation of MVMT; higher payroll related of $1.6 million; and of $0.3 million of higher rent related expenses.

International ~~Wholesale~~Watch and Accessory Brands Operating ~~Income.~~ Income

In the International location of the ~~Wholesale~~Watch and Accessory Brands segment, ~~during~~for the three months ended ~~July 31,~~April 30, 2019 and 2018, ~~and 2017, respectively,~~ the Company recorded operating income of ~~$15.0~~$13.9 million and ~~$6.9~~$14.1 million, respectively, which ~~included $11.3~~includes $13.0 million and ~~$7.9~~$11.0 million of certain intercompany profits related to the Company’s International supply chain operations. The decrease in operating income of $0.2 million was primarily related to higher SG&A expenses of $4.1 million partially offset by higher gross profit of $3.9 million. The increase in gross profit of $3.8 million was primarily related to higher net sales, partially offset by a lower gross margin percentage. The increase in SG&A expenses of $4.1 million was attributable to higher marketing expenses of $1.5 million; higher payroll related of $1.9 million; an increase of $1.1 million in rent related expenses; and $1.1 million of expenses related to the Company’s new joint venture in Spain. Fluctuation in foreign currency exchange rates negatively impacted operating income by $1.4 million when compared to the prior year.

The Company recorded operating income of $1.9 million and $1.8 million in the Company Stores segment for the three months ended April 30, 2019 and 2018, respectively. The increase in operating income of ~~$8.1~~$0.1 million was ~~primarily due to~~the result of higher gross profit of ~~$10.5~~$0.6 million partially offset by higher SG&A expenses of ~~$2.4~~$0.5 million. The ~~increase in~~higher gross profit ~~of $10.5 million~~ was ~~primarily due to higher net sales and a~~the result of higher gross margin percentage. The increase in SG&A expenses of $2.4 million was attributable to higher marketing expenses of $4.0 million, higher distribution costs of $0.8 million, higher payroll related compensation of $1.4 million, bad debt expense of $0.3 million and higher rent of $0.2 million. SG&A expenses also included the unfavorable effect of foreign currency translation and transaction losses of $1.4 principally related to the non-recurrence of $0.9 million of transactional gains in the comparable period in the prior. These increases were partially offset by the non-recurrence of $4.2 million of expenses related to the acquisition of the Olivia Burton brand in the prior year, partially offset by $0.7 million of intangible amortization incurred in the three months ended July 31, 2018.

~~Retail Operating Income.~~ Operating income of $4.7 million and $3.5 million was recorded in the Retail segment for the three months ended July 31, 2018 and 2017, respectively. The increase in operating income of $1.2 million was the result a higher gross profit of $2.2 million partially offset by higher SG&A expenses of $1.0 million. The higher gross profit was the result of higher net sales and a higher gross margin percentage. The increase in SG&A expenses of $1.0$0.5 million was primarily due to rent and payroll related costs associated with the opening of new outlet locations.

Income ~~Taxes.~~ On December 22, 2017, the 2017 Tax Act was signed into law, which significantly changed U.S. corporate income tax laws by, among other things, lowering the corporate tax rate from 35% to 21%, limiting the deductibility of interest expense and executive compensation, establishing a territorial tax system, and imposing a one-time mandatory deemed Transition Tax on undistributed foreign earnings which have not been previously taxed.

The Company continues to evaluate the impact of the global intangible low-tax income GILTI provision within the 2017 Tax Act which would require the current inclusion in federal taxable income, earnings of certain foreign controlled corporations. GILTI is subject to continuing regulatory interpretation by the IRS and while the Company has includedrecorded an estimate of GILTI in its estimated effective tax rate for fiscal year 2019, it has not yet elected a policy as to whether it will recognize deferred taxes for basis differences expected to reverse or whether the Company will account for GILTI as period costs when and if incurred. Adjustments related to the amount of GILTI recorded in its consolidated financial statements may be required based on the outcome of this election. The Company will continue to evaluate these provisions and elect an accounting policy within the measurement period.

~~The Company recorded~~ income tax expense of ~~$3.6~~$0.8 million and ~~$2.6~~income tax benefit $0.1 million for the three months ended ~~July 31,~~April 30, 2019 and 2018, ~~and 2017,~~ respectively.

The effective tax rate was ~~28.3%~~17.7% and ~~32.0%~~-1.8% for the three months ended ~~July 31,~~April 30, 2019 and 2018, ~~and 2017,~~ respectively. The change in the effective tax rate was primarily due to ~~changes in jurisdictional earnings, partially offset by no tax benefit being recognized on losses incurred by~~the release of valuation allowances against certain foreign ~~operations.~~deferred tax assets in prior year.

The effective tax rate for the three months ended July 31, 2017 differs from the U.S. statutory tax rate of 35.0% primarily due to foreign profits being taxed in lower taxing jurisdictions and acquisition costs related to the acquisition of the Olivia Burton brand (see Note 16 – Acquisitions for additional disclosures).

~~Net Income Attributed to Movado Group, Inc.~~ ~~The Company recorded net income attributed to Movado Group, Inc. of $9.1 million and $5.5 million, for the three months ended July 31, 2018 and 2017, respectively.~~

~~Results of operations for the six months ended July 31, 2018 as compared to the six months ended July 31, 2017~~

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

Net sales for the six months ended July 31, 2018 were $271.2 million, above the prior year period by $43.2 million or 18.9%, which included a favorable impact of $1.1 million as a result of the adoption of ASC 606. For the six months ended July 31, 2018, fluctuations in foreign currency exchange rates favorably impacted net sales by $7.6 million when compared to the prior year period.

Net sales for the six months ended July 31, 2018 in the Wholesale segment were $235.2 million, above the prior year period by $37.0 million or 18.7%. The increase in net sales was the result of an increase in net sales in the International location partially offset by a decrease in net sales in the United States location of the Wholesale segment.

Net sales for the six months ended July 31, 2018 in the United States location of the Wholesale segment were $72.0 million, below the prior year period by $4.7 million or 6.2%, resulting from the net sales decrease in the licensed brands category, partially offset by an increase in the owned brands category. The net sales increase recorded in the owned brands category was $1.6 million, or 3.0%, primarily due to increased sales in chain and department store customers and sales attributable to the addition of the Olivia Burton brand. The decrease in net sales in the licensed brands category was $6.6 million or 34.7%, as the U.S. fashion watch market continues to be challenging.

Net sales for the six months ended July 31, 2018 in the International location of the Wholesale segment were $163.2 million, above the prior year by $41.8 million or 34.4%, which included fluctuations in foreign currency exchange rates which favorably impacted net sales by $7.6 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 $28.3 million, or 29.9%, primarily due to net sales increases in Europe, and Latin America. The net sales increase recorded in the owned brands category was $12.0 million, or 47.6%, primarily due to sales increases in Europe. The net sales increase in the owned brands category included sales attributable to the addition of the Olivia Burton brand.

Net sales for the six months ended July 31, 2018 in the Retail segment were $36.1 million, above the prior year period by $6.2 million, or 20.7%, driven by higher sales in comparable stores, the addition of new store openings and a better product mix combined with higher conversion rates as products resonated well with customers. As of July 31, 2018, and 2017, the Company operated 43 and 40 retail outlet locations, respectively.

~~Gross Profit.~~ Gross profit for the six months ended July 31, 2018 was $145.4 million or 53.6% of net sales as compared to $115.3 million or 50.5% of net sales in the prior year period. The increase in gross profit of $30.1 million was primarily due to higher net sales and a higher gross margin percentage. The increase in the gross margin percentage of approximately 310 basis points for the six months ended July 31, 2018, resulted primarily from the favorable impact of sales mix of approximately 120 basis points, the impact of fluctuations in foreign currency exchange rates of approximately 60 basis points, the non-recurrence of costs incurred from the Company’s prior year cost savings initiative of approximately 60 basis points, the increased leveraging of certain fixed costs as a result of higher sales of approximately 60 basis points and 10 basis points from the non-recurrence of the amortization of the inventory step-up adjustment related to the acquisition of the Olivia Burton brand.

~~Selling, General and Administrative (“SG&A”).~~ SG&A expenses for the six months ended July 31, 2018 were $124.4 million, representing an increase from the prior year period of $13.8 million or 12.4%. The increase in SG&A expenses was attributable to higher marketing expenses of $10.7 million, higher distribution costs of $2.4 million, payroll, and performance based compensation of $2.1 million, consulting and legal costs of $1.8 million principally associated with the pending acquisition of the MVMT brand, $1.4 million of payroll and occupancy costs associated with the opening of new retail locations, $1.1 million higher bad debt expense, principally due to the non-recurrence of a $0.8 million customer recovery in the prior year and higher rent expenses of $0.4 million. SG&A expenses also included the unfavorable effect of foreign currency translation and transaction losses of $2.9 principally related to the non-recurrence of $1.1 million of transactional gains in the comparable period in the prior year. These increases were partially offset by the reduction of $1.6 million of selling expenses, due principally to the Company’s decision to not participate in the Basel Fair in the current year, the non-recurrence of $5.0 million of expenses related to the Company’s cost savings initiative in the prior year, and the non-recurrence of $4.2 million of expenses related to the acquisition of the Olivia Burton brand in the prior year, partially offset by $1.5 million of intangible amortization incurred in the six months ended July 31, 2018.

~~Wholesale Operating Income.~~ In the six months ended July 31, 2018 and 2017, respectively, the Company recorded Wholesale segment operating income of $14.6 million and $0.3 million, which includes $20.7 million and $13.4 million of unallocated corporate expenses as well as $22.3 million and $15.5 million, respectively, of certain intercompany profits related to the Company’s supply chain operations. The $14.3 million increase in operating income was the net result of a higher gross profit of $26.3 million when compared to the prior year period, partially offset by higher SG&A expenses of $12.0 million. The increase in SG&A expenses was attributable to higher marketing expenses of $10.7 million, higher distribution costs of $2.4 million, payroll, and performance based compensation of $2.1 million, consulting and legal costs of $1.8 million principally associated with the pending acquisition of the MVMT brand, $1.1 million higher bad debt expense, principally due to the non-recurrence of a $0.8 million customer recovery in the prior year and higher rent expenses of $0.4 million. SG&A expenses also included the unfavorable effect of foreign currency translation and transaction losses of $2.9 principally related to the non-recurrence of $1.1 million of transactional gains in the comparable period in the prior year. These increases were partially offset by the reduction of $1.6 million of selling expenses, due principally to the Company’s decision to not participate in the Basel Fair in the current year, the non-recurrence of $5.0 million of expenses related to the Company’s cost savings initiative in the prior year, and the non-recurrence of $4.2 million of expenses related to the acquisition of the Olivia Burton brand in the prior year, partially offset by $1.5 million of intangible amortization incurred in the six months ended July 31, 2018..

~~U.S. Wholesale Operating Loss.~~ In the United States location of the Wholesale segment, during the six months ended July 31, 2018 and 2017, respectively, the Company recorded an operating loss of $14.6 million and $12.7 million, which included unallocated corporate expenses of $20.7 million and $13.4 million. The increase in operating loss of $1.9 million was the net result of higher gross profit of $1.3 million offset by higher SG&A expenses of $3.2 million. The increase in gross profit of $1.3 million was due to a higher gross margin percentage on slightly lower sales. The increase in SG&A expenses of $3.2 million was attributable to higher marketing costs of $4.1 million, higher consulting and legal costs of $2.1 million principally associated with the pending acquisition of the MVMT brand and higher payroll, and performance based compensation of $1.0 million. These costs were partially offset by the non-recurrence of $3.6 million in charges related the Company’s cost savings initiative incurred during the six months ended July 31, 2017.

~~International Wholesale Operating Income.~~ In the International location of the Wholesale segment, during the six months ended July 31, 2018 and 2017, respectively, the Company recorded operating income of $29.1 million and $13.0 million, which included $22.3 million and $15.5 million of certain intercompany profits related to the Company’s International supply chain operations. The increase in operating income of $16.1 million was primarily due to higher gross profit of $25.0 million, partially offset by higher SG&A expenses of $8.9 million. The increase in gross profit of $25.0 million was primarily due to higher net sales and a higher gross margin percentage. The increase in SG&A expenses of $8.9 million was attributable to higher marketing expenses of $6.5 million, higher distribution costs of $1.8 million, higher payroll related expenses of $1.5 million, the unfavorable effect of foreign currency translation and transaction losses of $2.9 principally related to the non-recurrence of $1.1 million of transactional gains in the comparable period in the prior year, higher bad debt expenses of $0.4 million and. higher rent costs of $0.2 million. These increases were partially offset by the reduction of $1.3 million of selling expenses, due principally to the Company’s decision to not participate in the Basel Fair in the current year, lower consulting and legal expenses of $0.4 million and the non-recurrence of $4.2 million of expenses related to the acquisition of the Olivia Burton brand in the prior year, partially offset by $1.5 million of intangible amortization incurred in the six months ended July 31, 2018.

~~Retail Operating Income.~~ Operating income of $6.4 million and $4.4 million was recorded in the Retail segment for the six months ended July 31, 2018 and 2017, respectively. The increase in operating income of $2.0 million was the result a higher gross profit of $3.8 million partially offset by higher SG&A expenses of $1.8 million. The higher gross profit was the result of higher net sales and a higher gross margin percentage. The increase in SG&A expenses of $1.8 million was primarily due to rent and payroll related costs associated with the opening of new outlet locations.

~~Income Taxes.~~ On December 22, 2017, the 2017 Tax Act was signed into law, which significantly changed U.S. corporate income tax laws by, among other things, lowering the corporate tax rate from 35% to 21%, limiting the deductibility of interest expense and executive compensation, establishing a territorial tax system, and imposing a one-time mandatory deemed Transition Tax on undistributed foreign earnings which have not been previously taxed.

The Company continues to evaluate the impact of the global intangible low-tax income GILTI provision within the 2017 Tax Act which would require the current inclusion in federal taxable income, earnings of certain foreign controlled corporations. GILTI is subject to continuing regulatory interpretation by the IRS and while the Company has included an estimate of GILTI in its estimated effective tax rate for fiscal year 2019, it has not yet elected a policy as to whether it will recognize deferred taxes for basis differences expected to reverse or whether the Company will account for GILTI as period costs when and if incurred. Adjustments related to the amount of GILTI recorded in its consolidated financial statements may be required based on the outcome of this election. The Company will continue to evaluate these provisions and elect an accounting policy within the measurement period.

~~The Company recorded income tax expense of 3.5 million and $2.9 million for the six months ended July 31, 2018 and 2017, respectively.~~

The effective tax rate was 16.8% and 68.3% for the six months ended July 31, 2018 and 2017, respectively. The change in the effective tax rate was primarily due to excess tax benefits related to stock-based compensation being recognized in the current period as compared to excess tax deficiencies recognized in the first quarter of last year, the release of a valuation allowance against certain foreign deferred tax assets, and changes in jurisdictional earnings.

~~The effective tax rate for the six months ended July 31,~~April 30, 2018 differs from the U.S. statutory tax rate of 21.0% primarily due to the release of a valuation allowance against certain foreign deferred tax assets and ~~foreign profits being taxed~~a decrease in ~~lower taxing jurisdictions.~~the deferred withholding tax liability on unremitted earnings resulting from currency exchange rates.

The effective tax rate for the six months ended July 31, 2017 differs from the U.S. statutory tax rate of 35.0% primarily due to foreign profits being taxed in lower taxing jurisdictions and acquisition costs related to the acquisition of the Olivia Burton brand (see Note 16 – Acquisitions for additional disclosures). The effective tax rate for the six months ended July 31, 2017 also includes an increase primarily due to the adoption of ASU 2016-09 and ~~no tax benefit being recognized on losses incurred by certain foreign operations.~~

The Company recorded net income ~~attributed~~attributable to Movado Group, Inc. of ~~$17.3~~$3.9 million and ~~$1.3~~$8.1 million, for the ~~six~~three months ended ~~July 31,~~April 30, 2019 and 2018, ~~and 2017,~~ respectively.

At ~~July 31,~~April 30, 2019 and April 30, 2018, ~~and July 31, 2017, respectively,~~ the Company had ~~$175.6~~$150.7 million and ~~$162.4~~$177.0 million, respectively, of cash and cash ~~equivalents, of which, $143.9~~equivalents. Of this total, $134.4 million and ~~$150.9~~$148.9 million, respectively, consisted of cash and cash equivalents at the Company’s foreign subsidiaries.

The Company ~~has~~ recorded a ~~provisional~~ deferred tax liability for foreign withholding and U.S. ~~state~~ income taxes of ~~$10.7~~$2.9 million related to ~~$217.1~~$131.3 million of foreign earnings. This deferred tax liability is net of estimated foreign tax credits that would be generated upon the repatriation of such earnings. A deferred tax liability has not been recorded for the remaining undistributed foreign earnings of approximately ~~$107.9 million. In light of the 2017 Tax Act,~~$158.0 million, because the Company ~~continues~~intends to ~~evaluate its assertion related to the indefinite reinvestment of~~permanently reinvest such earnings in its foreign operations. ~~In accordance with Staff Accounting Bulletin 118, if~~It is not practicable to estimate the tax liability related to a future distribution of these permanently reinvested foreign earnings.

At April 30, 2019, the Company ~~revises its assertion during the measurement period, the change, and any corresponding adjustment, would be recorded as part~~had working capital of ~~the 2017 Tax Act enactment in the period in which the revision is determined.~~

~~Cash provided by operating activities was $4.1~~$335.1 million as compared to ~~$10.0~~$374.2 million ~~used in operating activities for the six months ended July 31, 2018 and 2017, respectively.~~at April 30, 2018. The ~~$4.1 million of cash provided by operating activities for the six months ended July 31, 2018,~~ ~~was primarily due to net income for the period of $17.3 million and favorable non-cash items of $8.4 million, partially offset by the change~~decrease in working capital ~~of $22.1 million. The change in working capital of $22.1 million~~ was primarily ~~due to~~ the ~~timing of building inventory in anticipation~~result of the ~~holiday selling season~~addition of current operating lease liabilities of $13.8 million in accordance with the ~~second half~~Company’s adoption of ASU 2016-02, “Leases”; the ~~fiscal year, increases~~acquisition of MVMT in ~~accounts receivables primarily due to increased sales,~~October 2018; and ~~higher~~ a decrease in other current assets primarily ~~due to prepayments made to suppliers~~,as a result of recovery of VAT of $4.6 million. These factors were partially offset by ~~higher accounts payable~~an increase in inventories. The Company defines working capital as the difference between current assets and ~~accrued~~current liabilities.

The ~~$10.0~~Company had $25.6 million of cash used in operating activities for the ~~six~~three months ended ~~July 31, 2017,~~April 30, 2019 as compared to $2.6 million cash used for the three months ended April 30, 2018. For the three months ended April 30, 2019 operating cash flow was ~~primarily due~~the result of net income attributable to ~~an unfavorable change in working capital as presented on~~Movado Group, Inc. of $3.9 million, adjusted for the ~~consolidated statements~~effects of ~~cash flows~~non-cash items totaling $5.9 million, including $3.9 million of ~~$26.4~~depreciation and amortization, $1.6 million for stock based compensation expense and $0.5 million for provision for inventories and allowance for doubtful accounts, partially offset by ~~favorable non-cash items~~$0.1 million benefit for deferred taxes. Cash used in operating activities included an increase in investment in inventories of ~~$15.3~~$14.8 million ~~which included a $6.4~~to support sales growth, increase in current assets of $4.1 million ~~charge related to the Company’s cost savings initiatives. The unfavorable change in working capital of $26.4 million was primarily~~ due to ~~the ordinary course building~~timing of ~~inventory to meet anticipated future demand, higher trade receivables~~payments of annual fees, decrease in accrued payroll and ~~higher other current assets~~benefits of $11.5 million primarily as a result of payments of performance based compensation and decrease in taxes payable of $2.1 million due to ~~prepayments~~payments made ~~to suppliers, partially offset by higher accounts payable. Included in~~during the ~~change in working capital was $4.3 million of payments related to the Company’s cost savings initiatives.~~quarter.

Cash used in investing ~~activities~~ was ~~$5.3 million and $80.4~~$2.3 million for the ~~six~~three months ended ~~July 31, 2018 and 2017, respectively.~~April 30, 2019 as compared to $1.9 million for the three months ended April 30, 2018. The cash used in ~~investing activities for~~ the ~~six~~three months ended ~~July 31, 2018~~April 30, 2019 was primarily ~~for~~$2.2 million in capital expenditures primarily related to the opening and ~~renovations~~renovation of the Company stores and to the construction of shop-in-shop at some of the Company’s retail outlet locations and capital expenditures related to office improvements. The cash used in investing activities for the six months ended July 31, 2017 was primarily for the acquisition, net of cash acquired, of the Olivia Burton brand.wholesale customers.

Cash used in financing activities was ~~$31.5 million and~~ $8.4 million for the ~~six~~three months ended ~~July 31, 2018 and 2017, respectively. Cash~~April 30, 2019 as compared to $27.7 million of cash used in financing activities for the ~~six~~three months ended ~~July 31, 2018~~April 30, 2018. The cash used in the three months ended April 30, 2019 included $4.6 million dividends paid, $2.6 million in stock repurchased in the ~~repayment~~open market, and $1.2 million stock option options and awards exercised, net of ~~bank borrowings, the payment of dividends and the repurchase~~$1.4 million of shares repurchased as a result of the Company’s common stock, partially offset by the exercise of certain stock awards. Cash used in financing activities for the six months ended July 31, 2017 included the payment of dividends, the repurchase of shares of the Company’s common stock, and the surrender of shares in connection with the vesting of certain stock awards.

Management believes that the cash on hand in addition to the expected cash flows 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.

As of ~~July 31,~~April 30, 2019, and April 30, 2018, there were ~~no loans drawn under the Facility. Additionally, approximately $0.3~~50.0 million in ~~letters~~Swiss francs (with a dollar equivalent 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$49.1 million) and zero, respectively, in loans outstanding under the Facility. ~~As of July 31, 2018, availability~~Availability under the Facility was ~~approximately $99.7 million.~~

The Company had weighted average borrowing under the facility of $49.8 million and $7.8 million, with a weighted average interest rate of 1.00% and 0.96% during the first quarter of fiscal 2020 and 2019, respectively.

A Swiss subsidiary of the Company maintains unsecured lines of credit with an unspecified maturity with a Swiss bank. As of ~~July 31,~~April 30, 2019, and 2018, ~~and 2017,~~ these lines of credit totaled 6.5 million Swiss francs for both periods, with a dollar equivalent of ~~$6.6~~$6.4 million and ~~$6.7~~$6.6 million, respectively. As of ~~July 31,~~April 30, 2019, and 2018, ~~and 2017,~~ there were no borrowings against these lines. As of ~~July 31,~~April 30, 2019, and 2018, 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 and $1.2 million, respectively, in various foreign currencies, of which $0.5 million and $0.6 million, isrespectively, was a restricted deposit as it relates to lease agreements.~~As of July 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 $1.2~~

Cash paid for interest, including unused commitments fees was $0.2 million ~~in various foreign currencies, of which $0.6 million is a restricted deposit as it relates to lease agreements.~~for both April 30, 2019 and April 30, 2018.

The Company paid cash dividends of ~~$0.40~~$0.20 per share or ~~approximately $9.2~~$4.6 million ~~for~~during the ~~six~~three months ended ~~July 31, 2018 and paid dividends of $0.26 per share or approximately $6.0 million for the six months ended July 31, 2017.~~

On August 29, 2018, the Board of Directors approved the payment of a cash dividend in the amount of $0.20 for each share of the Company’s outstanding common stock and class A common stock. The dividend will be paid on September 25, 2018 to all shareholders of record as of the close of business on September 11, 2018.April 30, 2019. 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 ~~15, 2018,~~29, 2017, the Board approved a share repurchase program under which the Company ~~announced that it has entered into~~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. Under this program the Company may purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise through August 29, 2020. During the three months ended April 30, 2019, the Company repurchased a ~~definitive agreement to acquire MVMT Watches Inc., the owner~~total of ~~MVMT ("MVMT"),~~78,402 shares of its common stock at a ~~global aspirational lifestyle brand. The purchase price is comprised~~total cost of ~~an initial payment of approximately $100~~$2.6 million, or ~~approximately $85 million net~~an average of ~~tax benefits, and two future contingent payments that combined could total up to an additional $100 million before taxes.~~

Management believes that the cash on hand, availability under its credit facility and 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.$33.36 per share.

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

See Note 2 ~~and 14~~ to the accompanying unaudited consolidated financial statements for a description of certain accounting changes and recent accounting pronouncements, which may impact ~~our~~the Company’s consolidated financial statements in future reporting periods.

Item 3. Quantitative and ~~Qualitative~~Qualitative Disclosures About Market Risk

The Company’s primary market risk exposure relates to foreign currency exchange ~~risk.~~risk (see Note 7 to the Consolidated Financial Statements). A significant portion of the Company’s purchases are denominated in Swiss 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 and the British Pound. The Company reduces its exposure to the Swiss 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 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 ~~July 31, 2018,~~April 30, 2019, the Company’s entire net forward contracts hedging portfolio consisted of ~~30.0~~40.4 million Chinese Yuan equivalent, 31.0 million Swiss francs equivalent, ~~11.5~~15.3 million US dollars equivalent, 14.2 million Euros equivalent and ~~0.8~~1.9 million British Pounds equivalent with various expiry dates ranging through ~~January 1,2019~~October 29, 2019, compared to a portfolio of ~~22.0~~16.0 million Swiss francs equivalent, ~~11.0~~9.0 million Euros equivalent and ~~4.0~~2.8 million British Pounds equivalent, with various expiry dates ranging through ~~January 10, 2018.~~October 9, 2018 as of April 30,2018. If the Company were to settle its Swiss franc forward contracts at ~~July 31, 2018 and 2017,~~April 30, 2019, the net result would be a loss of $0.3 million, net of tax benefit of $0.1 million and a gain of $0.2 million, net of tax of $0.2 million, respectively. If the Company were to settle its Euro forward contracts at July 31, 2018 and 2017, the net result would be a gain of $0.1 million, net of tax of $0.0 million and a loss of $0.4 million, net of tax benefit of $0.1 ~~million, respectively.~~million. As of ~~July 31, 2018, and 2017,~~April 30, 2019, the Company’s British Pound, Chinese Yuan, US Dollar and Euro 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 ~~July 31,~~April 30, 2019 and April 30, 2018, ~~and 2017,~~ respectively.

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 ~~July 31,~~April 30, 2019 and 2018, ~~and 2017;~~ thus, any changes in the gold purchase price will have an equal effect on the Company’s cost of sales.

Floating rate debt at April 30, 2019 and 2018 totaled $49.1 million (50 million in Swiss francs) and zero, respectively. The ~~Company has certain~~ debt ~~obligations with variable interest rates, which are~~outstanding at April 30, 2019 is based on LIBOR plus a spread ranging from ~~1.25%~~1.00% to 1.75% per annum or on a base rate plus a spread ranging from ~~0.25%~~0% to 0.75% per annum. with the spread in each case being based on the Company’s consolidated leverage ratio (as defined in the credit agreement). As of April 30, 2019, the Company’s spreads were 1.00% over LIBOR and 0% over the base rate. The Company does not hedge these interest rate risks. AsBased on the average floating rate debt outstanding during the three months ended, a one-percent increase or decrease in the average interest rate during the period would have resulted in a change to interest expense of ~~July 31, 2018,~~$0.1 million for the Company had no debt outstanding. 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.”three months ended April 30, 2019.

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. 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.

AsThe Company implemented changes to internal controls due to the adoption of ASU 2016-02 effective February 1, 2019. These changes include implementing a new lease accounting system and processes to evaluate and account for contracts under the new accounting standard.

On October 1, 2018, the Company ~~implemented ASC 606, Revenue form Contracts and Customers and~~acquired MVMT Watches, Inc, the owner of the MVMT brand (“MVMT”). In conducting its evaluation of the effectiveness of internal controls over financial reporting as of April 30, 2019, the Company ~~designed and implemented new internal controls related~~excluded MVMT Watches, Inc. from that evaluation in accordance with the rules relating to ~~the recognition, measurement and disclosure of the Company’s revenues under ASC 606.~~ recently-acquired entities.

There have been no other changes in the Company’s internal control over financial reporting during the three months ended ~~July 31, 2018~~April 30, 2019 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

On October 23, 2018, Swiss Time Watch & Jewellry GmbH (“ST Germany”) filed a lawsuit against the Company ~~is party~~in the Superior Court of California for the County of Los Angeles. The lawsuit, which was subsequently removed to the United States District Court for the Central District of California, primarily alleged that the Company, as legal ~~proceedings~~successor to MVMT Watches, Inc., failed to perform its obligations under the parties’ August 1, 2018 distribution agreement (the “ST Germany Agreement”). Under this agreement, ST Germany was granted the right, subject to certain limitations, to distribute a curated collection of MVMT watch styles in Germany. ST Germany also alleged various related torts and ~~contingencies,~~statutory violations and sought specific performance of the ~~resolution~~ST Germany Agreement as well as unspecified monetary damages. In February 2019, the parties settled the matter and the lawsuit was subsequently dismissed. The settlement terms included an immaterial cash payment by the Company and certain amendments to the ST Germany Agreement, including an extension of ~~which is not expected to materially affect its financial condition, future results of operations beyond~~ the ~~amounts accrued, or cash flows.~~agreement through early fiscal 2023.

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. ~~On February 24, 2017, the~~The Company ~~provided~~continues to provide U.S. Customs with supplemental analyses and information supporting the Company’s historical allocation ~~formulas and is in the process of providing additional information for U.S. Customs’ review.~~formulas. Although the Company disagrees with U.S. Customs’ position, 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.

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.

As of ~~July 31, 2018,~~April 30, 2019, there have been no material changes to any of the risk factors previously reported in the Company’s ~~2018~~2019 Annual Report on Form ~~10-K.~~10-K, except as described below.

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 through August 29, 2020, depending on market conditions, share price and other factors. ~~Under the program the~~The Company ~~is authorized to~~may purchase shares of its common stock through open market purchases, repurchase ~~programs,~~plans, block trades or otherwise. ~~This authorization expires on August 29, 2020.~~ During the three months ended ~~July 31, 2018,~~April 30, 2019, the Company repurchased a total of ~~21,900~~78,402 shares of its common stock ~~in the open market~~ at a total cost of ~~approximately $0.9~~$2.6 million, or an average ~~cost~~ of ~~$39.72~~$33.36 per share.

~~There were 1,868 shares~~If additional tariffs or other restrictions are placed on imports from China or any retaliatory trade measures are taken by China, the Company’s financial condition and results of ~~common stock repurchased during~~operations may be materially harmed.

Starting in July 2018, the ~~three months ended July 31,~~Trump Administration announced a series of lists covering thousands of categories of Chinese origin products subject to potential additional tariffs of 10% to 25% of import value. Many categories of Chinese imports became subject to the 10% additional tariff in September 2018, ~~as a result~~including certain of the ~~surrender~~Company’s packaging products. The 10% additional tariff was scheduled to increase to 25% if a trade agreement with China was not reached by March 1, 2019. Although these additional tariff hikes were temporarily suspended pending trade talks, these tariff hikes went into effect on May 10, 2019, thereby increasing the total additional tariffs on the Company’s packaging products produced in China from 10% to 25% of ~~shares~~import value. In addition, the Trump Administration indicated that it may soon impose, after notice and comment, additional 25% tariffs on substantially all remaining products of China. All of the Company’s smartwatches and most of the straps and bracelets used in ~~connection with~~ the ~~vesting~~production of ~~certain stock awards.~~its traditional watches are products of China. Therefore, the proposed 25% additional tariff would apply to these products if the tariff sanction increase goes into effect. However, since China is not the country of origin under existing customs rules for any of the watch heads (i.e., the case and all parts contained therein, including the non-Chinese origin movement) used in the production of the Company’s traditional watches, we do not believe that the proposed additional 25% tariff would apply to its traditional watches assembled in and imported from China, other than the straps and bracelets attached thereto. Nevertheless, the precise impact of the proposed additional tariff is impossible to predict at this time. To the extent that significant tariffs or other restrictions are placed on the Company’s imports from China, it may be required to raise prices for watches sold in the United States, which is the Company’s single largest market, which could result in the loss of customers and harm its operating performance. Alternatively, the Company may seek to shift production outside of China, resulting in significant costs and disruption to the Company’s operations and materially and adversely affecting its sales, costs and results of operations. In addition, the Company’s business may be impacted by retaliatory trade measures taken by China or other countries in response to existing or future tariffs, causing the Company to raise prices or make changes to its operations, any of which could materially harm its financial condition and results of operations. 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 42,127 shares were repurchased during the three months ended April 30, 2019 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 ~~July 31, 2018~~April 30, 2019 of equity securities that are registered by the Company pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

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

May 1, 2018 – May 31, 2018

21,900

$
39.72

21,900

$
45,967,702

June 1, 2018 – June 30, 2018

167

48.25

—

45,967,702

July 1, 2018 – July 31, 2018

1,701

48.30

—

45,967,702

Total

23,768

$
40.39

21,900

$
45,967,702

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, 2019 – February 28, 2019		31,425	$	32.53		31,425	$	39,582,789
March 1, 2019 – March 31, 2019		27,195		33.79		25,977		38,706,686
April 1, 2019 – April 30, 2019		61,909		33.35		21,000		37,989,275
Total		120,529	$	33.24		78,402	$	37,989,275

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.

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)

			Page
Part I	Financial Information (Unaudited)		3
	Item 1.	Consolidated Balance Sheets at ~~July 31, 2018,~~April 30, 2019, January 31, ~~2018~~2019 and ~~July 31, 2017~~April 30, 2018	3
		Consolidated Statements of Operations for the three ~~and six~~ months ended ~~July 31,~~April 30, 2019 and April 30, 2018 ~~and July 31, 2017~~	4
		Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~July 31,~~April 30, 2019 and April 30, 2018 ~~and July 31, 2017~~	5
		Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~July 31,~~April 30, 2019 and April 30, 2018 ~~and July 31, 2017~~	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2223
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3229
	Item 4.	Controls and Procedures	3329
Part II	Other Information		34
	Item 1.	Legal Proceedings	3431
	Item 1A.	Risk Factors	3431
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3431
	Item 6.	Exhibits	3633
Signature			3734

Assets Acquired and Liabilities Assumed	Fair Value
Cash and cash equivalents	$	3,848
Trade receivables		370
Inventories		14,552
Prepaid expenses and other current assets		2,325
Property, plant and equipment		179
Other non-current assets		6,500
Goodwill		77,542
Trade name and other intangibles		28,928
Total assets acquired		134,244
Accounts payable		5,982
Accrued liabilities		9,018
Other non-current liabilities		7,064
Total liabilities assumed		22,064
Total purchase price	$	112,180

	Three Months Ended April 30,
	2019		2018 (1)
(In thousands, except per share data)	(Unaudited)
Net sales	$	146,549	$	139,564
Net income (loss)	$	3,925	$	(619	)

Basic income (loss) per share:
Net income (loss) per share attributed to Movado Group, Inc.	$	0.17	$	(0.03	)

Diluted income (loss) per share:
Net income (loss) per share attributed to Movado Group, Inc.	$	0.17	$	(0.03	)

	April 30, 2019		January 31, 2019		April 30, 2018
Finished goods	$	132,797	$	123,947	$	118,057
Component parts		43,304		39,752		39,651
Work-in-process		1,947		1,612		1,324
	$	178,048	$	165,311	$	159,032

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

	January 31, 2018				January 31, 2017
				As previously				As previously
		As adjusted		reported		As adjusted		reported
Cash and cash equivalents	$	214,811	$	214,811	$	256,279	$	256,279
Restricted funds included in other non-current assets		600		—		600		—
Beginning of period balance presented in the statement of cash flows	$	215,411	$	214,811	$	256,879	$	256,279

		Fair Value at July 31, 2018
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	187	$	—	$	—	$	187
Short-term investment	Other current assets		156		—		—		156
SERP assets - employer	Other non-current assets		1,262		—		—		1,262
SERP assets - employee	Other non-current assets		38,970		—		—		38,970
Hedge derivatives	Other current assets		—		161		—		161
Total		$	40,575	$	161	$	—	$	40,736
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	38,970	$	—	$	—	$	38,970
Hedge derivatives	Accrued liabilities		—		481		—		481
Total		$	38,970	$	481	$	—	$	39,451

		Fair Value at January 31, 2018
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	275	$	—	$	—	$	275
Short-term investment	Other current assets		164		—		—		164
SERP assets - employer	Other non-current assets		994		—		—		994
SERP assets - employee	Other non-current assets		38,577		—		—		38,577
Hedge derivatives	Other current assets		—		544		—		544
Total		$	40,010	$	544	$	—	$	40,554
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	38,577	$	—	$	—	$	38,577
Hedge derivatives	Accrued liabilities		—		46		—		46
Total		$	38,577	$	46	$	—	$	38,623

		Fair Value at July 31, 2017
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	313	$	—	$	—	$	313
Short-term investment	Other current assets		161		—		—		161
SERP assets - employer	Other non-current assets		1,394		—		—		1,394
SERP assets - employee	Other non-current assets		34,007		—		—		34,007
Hedge derivatives	Other current assets		—		402		—		402
Total		$	35,875	$	402	$	—	$	36,277
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	34,007	$	—	$	—	$	34,007
Hedge derivatives	Accrued liabilities		—		489		—		489
Total		$	34,007	$	489	$	—	$	34,496

	Operating Income (3) (4)
	2018		2017
Wholesale	$	8,202	$	4,797
Retail		4,658		3,520
Consolidated total	$	12,860	$	8,317

	Total Assets
	July 31, 2018		January 31, 2018		July 31, 2017
Wholesale	$	601,788	$	621,965	$	609,893
Retail		25,460		23,415		24,180
Consolidated total	$	627,248	$	645,380	$	634,073

	Net Sales				Operating Income / (Loss) (3) (4)
	2018		2017		2018			2017
United States (1)	$	59,020	$	61,845	$	(2,209	)	$	1,401
International (2)		85,073		66,936		15,069			6,916
Consolidated total	$	144,093	$	128,781	$	12,860		$	8,317

	Asset Derivatives							Liability Derivatives
	Balance Sheet Location	April 30, 2019 Fair Value		January 31, 2019 Fair Value		April 30, 2018 Fair Value		Balance Sheet Location	April 30, 2019 Fair Value		January 31, 2019 Fair Value		April 30, 2018 Fair Value
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other Current Assets	$	8	$	22	$	—	Accrued Liabilities	$	509	$	156	$	704
Total Derivative Instruments		$	8	$	22	$	—		$	509	$	156	$	704

	Three Months Ended April 30,
(In thousands)	2019
Balance at January 31, 2019	$	16,718
Payments		—
Adjustments included in earnings		166
Ending Balance	$	16,884

Lease Expense	Consolidated Statements of Operation Location	For the Three Months Ended April 30, 2019
Operating lease expense	SG&A	$	4,676
Short-term lease cost	SG&A		139
Variable lease cost	SG&A		1,720
Total operating lease expense		$	6,535
Finance lease cost:
Amortization of right-of-use assets	SG&A	$	29
Interest on lease liabilities	Interest expense	$	4

Leases	Consolidated Balance Sheets Location	April 30, 2019
Assets
Operating	Operating lease right-of-use assets	$	87,353
Finance	Other non-current assets	$	370

Liabilities
Current:
Operating	Current operating lease liabilities	$	13,771
Finance	Accrued liabilities	$	113
Noncurrent:
Operating	Non-current operating lease liabilities	$	79,877
Finance	Other non-current liabilities	$	258

Lease Term and Discount Rate	April 30, 2019
Weighted-average remaining lease term - in years
Operating leases	7.66
Finance leases	3.15
Weighted-average discount rate:
Operating leases		3.67	%
Finance leases		3.86	%

Fiscal Year	Operating Leases			Finance Leases
2020 (remaining)	$	12,879		$	94
2021		15,758		125
2022		14,228		125
2023		12,338		49
2024		11,774			—
Thereafter		41,622			—
Total lease payments	$	108,599		$	393
Less: Interest		(14,951	)		(22	)
Total lease obligations	$	93,648		$	371

Fiscal Year Ending January 31,
2020	$	14,036
2021		11,325
2022		10,135
2023		8,279
2024		7,683
Thereafter		35,020
	$	86,478

	For the Three Months Ended April 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,146
Operating cash flows from finance leases	4
Financing cash flows from finance leases	29
Leased assets obtained in exchange for new operating lease liabilities	489
Leased assets obtained in exchange for new financing lease liabilities	399

	Currency Translation Adjustments			Available-for-sale securities		Hedging Contracts			Total
Balance, January 31, 2018	$	100,190		$	191	$	(38	)	$	100,343
Other comprehensive (loss) / income before reclassifications		(19,901	)		64		(380	)	$	(20,217	)
Amounts reclassified from accumulated other comprehensive income (1)							276		$	276
Net current-period other comprehensive (loss) / income		(19,901	)		64		(104	)		(19,941	)
Balance, July 31, 2018	$	80,289		$	255	$	(142	)	$	80,402

	Balance at January 31, 2018		Cash payments			Foreign exchange			Balance in Accrued Liabilities at July 31, 2018
Severance and payroll related	$	931	$	(601	)	$	—		$	330
Other		919		(181	)		(50	)		688
Occupancy charges		74		(22	)		(4	)		48
Total	$	1,924	$	(804	)	$	(54	)	$	1,066

	As of
	July 31, 2018
	Gross carrying amount		Accumulated amortization			Foreign exchange		Net
Intangible assets subject to amortization:
Trade name	$	12,766	$	(1,428	)	$	132	$	11,470
Customer relationships		8,598		(1,603	)		104		7,099
Total intangible assets	$	21,364	$	(3,031	)	$	236	$	18,569

	As of July 31, 2018
	As reported		Balances Without Adoption		Impact of Adoption
Assets
Trade Receivables, net	$	83,818	$	82,760	$	1,058
Inventories	$	171,417	$	171,965	$	(548	)
Deferred and non-current income taxes	$	8,074	$	8,099	$	(25	)
Liabilities
Accrued liabilities	$	50,054	$	49,893	$	161
Income taxes payable	$	5,996	$	5,957	$	39
Deferred and non-current income taxes	$	29,718	$	29,706	$	12

	Three months ended July 31, 2018
	As reported		Amounts Without Adoption		Impact of Adoption
Net sales	$	144,093	$	145,210	$	(1,117	)
Gross profit	$	77,834	$	78,323	$	(488	)
Net income	$	9,140	$	9,384	$	(244	)

	Six months ended July 31, 2018
	As reported		Amounts Without Adoption		Impact of Adoption
Net sales	$	271,242	$	270,184	$	1,058
Gross profit	$	145,358	$	144,848	$	510
Net income	$	17,255	$	16,982	$	273

	Three months ended		Six months ended
	July 31, 2018		July 31, 2018		Three Months Ended		Three Months Ended
Customer Type					April 30, 2019		April 30, 2018
Wholesale	$	117,735	$	223,709	$	115,161	$	105,974
Direct to consumer		25,329		45,111		30,356		19,782
After-sales service		1,029		2,422		1,032		1,393
Consolidated	$	144,093	$	271,242
Net Sales					$	146,549	$	127,149

	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, 2019 (264,244 options exercisable)		566,260		$	28.43	$ 23.35-$42.12		6.2		$	2,654
Granted		—			—
Exercised		(5,150	)	$	30.36	$	30.36
Cancelled		—			—
Options outstanding at April 30, 2019		561,110		$	28.41	$ 23.35-$42.12		5.9		$	4,482
Exercisable at April 30, 2019		399,905		$	30.45			5.1		$	2,499
Expected to vest at April 30, 2019		159,065		$	23.35				8.0	$	1,956

	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, 2019		447,022		$	32.27	1.4	$	14,282
Units granted		261,067		$	32.91
Units vested		(160,483	)	$	29.35
Units forfeited		(2,263	)	$	31.18
Units outstanding at April 30, 2019		545,343		$	33.53	2.2	$	17,447

	Operating Income ^{(3) (4)}
	2019		2018
Watch and Accessory Brands	$	3,095	$	6,366
Company Stores		1,879		1,773
Consolidated total	$	4,974	$	8,139

	Total Assets (1)
	April 30, 2019		January 31, 2019		April 30, 2018
Watch and Accessory Brands	$	766,571	$	735,244	$	587,052
Company Stores		62,090		24,457		25,080
Consolidated total	$	828,661	$	759,701	$	612,132

	Net Sales				Operating Income / (Loss) ^(3) (4⁾
	2019		2018		2019			2018
United States (1)	$	59,494	$	48,843	$	(8,952	)	$	(5,982	)
International (2)		87,055		78,306		13,926			14,121
Consolidated total	$	146,549	$	127,149	$	4,974		$	8,139

	Three Months Ended July 31,				Three Months Ended April 30,
	2018		2017		2019		2018
Wholesale:
Watch and Accessory Brands:
United States	$	38,218	$	44,082	$	44,662	$	33,793
International		84,864		66,936		86,833		78,306
Total Wholesale		123,082		111,018
Retail		21,011		17,763
Total Watch and Accessory Brands						131,495		112,099
Company Stores:
United States						14,832		15,050
International						222		—
Total Company Stores						15,054		15,050
Net Sales	$	144,093	$	128,781	$	146,549	$	127,149

	Six Months Ended July 31,
	2018		2017
Wholesale:
United States	$	72,011	$	76,772
International		163,171		121,406
Total Wholesale		235,182		198,178
Retail		36,060		29,868
Net Sales	$	271,242	$	228,046


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 ~~July 31, 2018~~April 30, 2019 filed with the SEC, formatted in Extensible Business Reporting Language (XBRL): (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.