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 every Interactive Data File required to be submitted 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 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 ~~May 22, 2019~~June 3, 2020 were ~~16,462,854~~16,521,046 and ~~6,586,780,~~6,608,548, respectively.

	April 30,			January 31,			April 30,			April 30,			January 31,			April 30,
	2019			2019			2018			2020			2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	150,712		$	189,911		$	176,959		$	187,830		$	185,872		$	150,712
Trade receivables, net		85,715			84,026			79,965			49,765			78,388			85,715
Inventories		178,048			165,311			159,032			177,832			171,406			178,048
Other current assets		32,631			28,898			36,213			27,049			28,888			32,631
Total current assets		447,106			468,146			452,169			442,476			464,554			447,106
Property, plant and equipment, net		26,065			26,067			23,560			26,934			29,238			26,065
Operating lease right-of-use assets		87,353			—			—			86,444			89,523			87,353
Deferred and non-current income taxes		24,913			24,503			8,157			67,281			25,403			24,913
Goodwill		135,685			136,033			58,484			—			136,366			135,685
Other intangibles, net		46,570			48,183			21,720			18,272			42,359			46,570
Other non-current assets		60,969			56,769			48,042			56,506			59,865			60,969
Total assets	$	828,661		$	759,701		$	612,132		$	697,913		$	847,308		$	828,661
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	37,477		$	38,650		$	29,333		$	19,241		$	35,488		$	37,477
Accrued liabilities		44,886			44,429			37,356			39,489			44,210			44,886
Accrued payroll and benefits		7,185			18,773			6,616			6,768			6,302			7,185
Current operating lease liabilities		13,771			—			—			15,053			15,083			13,771
Income taxes payable		8,663			10,831			4,650			13,064			8,217			8,663
Total current liabilities		111,982			112,683			77,955			93,615			109,300			111,982
Loans payable to bank		49,060			50,280			—			82,510			51,910			49,060
Deferred and non-current income taxes payable		29,071			29,242			32,998			25,085			25,419			29,071
Non-current operating lease liabilities		79,877			—			—			78,471			81,877			79,877
Other non-current liabilities		65,394			67,120			40,231			44,721			48,393			65,394
Total liabilities		335,384			259,325			151,184			324,402			316,899			335,384
Commitments and contingencies (Note 9)
Commitments and contingencies (Note 11)
Redeemable noncontrolling interest		3,636			3,721			—			2,966			3,165			3,636
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; 27,866,510, 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
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; 0 shares issued											—			—			—
Common Stock, $0.01 par value, 100,000,000 shares authorized; 28,000,364, 27,859,328 and 27,866,510 shares issued and outstanding, respectively											280			279			279
Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,608,548, 6,603,645 and 6,586,780 shares issued and outstanding, respectively											65			65			65
Capital in excess of par value		203,640			201,814			194,792			210,070			208,473			203,640
Retained earnings		430,514			431,180			391,526			305,486			455,479			430,514
Accumulated other comprehensive income		76,337			80,507			85,004			77,074			85,050			76,337
Treasury Stock, 11,388,021, 11,268,492 and 11,093,282 shares, respectively, at cost		(221,194	)		(217,188	)		(210,716	)
Treasury Stock, 11,480,231, 11,443,308 and 11,388,021 shares, respectively, at cost											(223,176	)		(222,809	)		(221,194	)
Total Movado Group, Inc. shareholders' equity		489,641			496,655			460,948			369,799			526,537			489,641
Noncontrolling interest											746			707			—
Total equity											370,545			527,244			489,641
Total liabilities, redeemable noncontrolling interest and equity	$	828,661		$	759,701		$	612,132		$	697,913		$	847,308		$	828,661

Three Months Ended April 30,

2019

2018

Cash flows from 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

3,872

3,383

Transactional gains

(232
)

(242
)
Provision for inventories and accounts receivable

531

483

Deferred income taxes

(134
)

(1,553
)
Stock-based compensation

1,638

1,214

Other

199

—

Changes in assets and liabilities:

Trade receivables

(2,567
)

443

Inventories

(14,756
)

(11,548
)
Other current assets

(4,134
)

(6,583
)
Accounts payable

(896
)

5,690

Accrued liabilities

1,294

5,036

Accrued payroll and benefits

(11,507
)

(8,351
)
Income taxes payable

(2,094
)

1,722

Other non-current assets

(878
)

988

Other non-current liabilities

124

(1,417
)
Net cash used in operating activities

(25,615
)

(2,620
)
Cash flows from investing activities:

Capital expenditures

(2,204
)

(1,686
)
Trademarks and other intangibles

(63
)

(168
)
Net cash used in investing activities

(2,267
)

(1,854
)
Cash flows from financing activities:

Repayments of bank borrowings

—

(25,000
)
Stock awards and options exercised and other changes

(1,234
)

3,105

Stock repurchase

(2,616
)

(1,186
)
Dividends paid

(4,591
)

(4,604
)
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
$
151,247

$
177,559

Reconciliation of cash, cash equivalents, and restricted cash:

Cash and cash equivalents
$
150,712

$
176,959

Restricted cash included in other non-current assets

535

600

Cash, cash equivalents, and restricted cash
$
151,247

$
177,559

	Three Months Ended April 30,
	2020			2019
Net sales	$	69,666		$	146,549
Cost of sales		37,773			67,676
Gross profit		31,893			78,873
Selling, general and administrative		58,137			73,899
Impairment of goodwill and intangible assets (Note 6)		155,919			-
Total operating expenses		214,056			73,899
Operating (loss)/income		(182,163	)		4,974
Interest expense		(271	)		(224	)
Interest income		15			21
(Loss)/income before income taxes		(182,419	)		4,771
(Benefit)/provision for income taxes (Note 12)		(32,330	)		847
Net (loss)/income		(150,089	)		3,924
Less: Net loss attributable to noncontrolling interests		(96	)		(1	)
Net (loss)/income attributable to Movado Group, Inc.	$	(149,993	)	$	3,925

Basic (loss)/income per share:
Weighted basic average shares outstanding		23,141			23,119
Net (loss)/income per share attributable to Movado Group, Inc.	$	(6.48	)	$	0.17

Diluted (loss)/income per share:
Weighted diluted average shares outstanding		23,141			23,452
Net (loss)/income per share attributable to Movado Group, Inc.	$	(6.48	)	$	0.17

The accompanying interim unaudited ~~consolidated financial statements~~Consolidated Financial Statements have been prepared by Movado Group, Inc. (the “Company”), in a manner consistent with that used in the preparation of the annual audited ~~consolidated financial statements~~Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019~~2020 (the ~~“2019~~“2020 Annual Report on Form 10-K”). The unaudited ~~consolidated financial statements~~Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the unaudited ~~consolidated financial statements~~Consolidated Financial Statements and the reported amounts of revenues and expenses during the periods reported. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited ~~consolidated financial statements~~Consolidated Financial Statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and results of operations for the periods presented. The consolidated balance sheet data at January 31, ~~2019~~2020 is derived from the audited annual financial statements, which are included in the Company’s ~~2019~~2020 Annual Report on Form 10-K and should be read in connection with these interim unaudited financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

In December 2019, COVID-19 emerged and subsequently spread worldwide. The World Health Organization declared COVID-19 a pandemic in March 2020, resulting in federal, state and local governments and other authorities mandating various restrictions, including travel restrictions, quarantines and other social distancing requirements. In response to the outbreak, in mid-March 2020, the Company and the majority of the Company’s wholesale customers temporarily closed all of their retail stores for an indefinite period of time due to health concerns associated with COVID-19.

As the full magnitude of the effects on the Company’s business is difficult to predict at this time, the COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on the Company’s business, financial condition, result of operations and cash flows for the foreseeable future. The Company believes that cash flows from operations and its credit lines and on-hand cash provide adequate funds to support its operating, capital and debt service requirements for the next twelve months subsequent to the issuance of these financial statements.

The Company amended its revolving credit facility to modify some of its financial covenants (see Note 8 - Debt and Lines of Credit). As a result, the Company expects to maintain compliance with the covenants for at least one year from the issuance of these financial statements based on the Company’s current expectations. As the ongoing public health impact and the associated containment and remediation efforts related to the COVID-19 pandemic is complex and rapidly evolving, the Company's plans as described below may change.

The Company has taken steps to further strengthen its financial position and balance sheet, and to maintain financial liquidity and flexibility, including suspending the Company’s share repurchase program and reviewing and reducing operating expenses. In addition, the Company borrowed an additional $30.9 million under its revolving credit facility in March of 2020. For additional information see Note 8 - Debt and Lines of Credit. The Company did not declare a dividend for the first quarter of fiscal 2021.

The Company is currently negotiating rent deferrals or other arrangements in respect of its rent obligations beginning with the month of April for all of its Company Stores and certain other leases. Since these negotiations are ongoing with no formal agreements in place, with the exception of its warehouse in Hong Kong, the Company accrued for the April payments.

During the first quarter of fiscal 2021, the Company recorded $7.2 million of corporate initiative costs which includes charges related to the impact on its business due to the COVID-19 pandemic. These costs include a $3.5 million increase in inventory reserves, a $1.5 million write-off related to unrefunded deposits for a canceled global customer event, a $1.1 million increase in bad debt reserves and $1.1 million of restructuring reserves, including severance.

The Company evaluates its long-lived assets, operating lease right of use assets, goodwill and intangible assets for indicators of impairment at least annually in the fourth quarter of each fiscal year or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Given the substantial reduction in the Company’s sales and the reduced cash flow projections as a result of closures of the retail stores of the Company, and its wholesale customers due to the COVID-19 pandemic, as

well as the significant decline in the Company’s market capitalization, the Company determined that a triggering event occurred and that an impairment assessment was warranted for goodwill and intangible assets. This analysis resulted in impairment charges related to goodwill of $133.7 million and intangible assets of $22.2 million in the first quarter of fiscal 2021. See Note 6 – Goodwill and Intangible Assets – for a further discussion of these impairments.

In March 2020, the FASB issued ASU 2020-03, “Codification Improvements to Financial Instruments”, which makes improvements to financial instruments guidance, including the current expected credit losses guidance. The adoption of the new guidance was not material to the Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. This guidance provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for the Company’s borrowing instruments, which use LIBOR as a reference rate, and is effective immediately, but is only available through December 31, 2022. The Company is currently evaluating the impact of the adoption of this standard on its Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in “Income Taxes (Topic 740)”. It also clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. The Company early adopted this standard effective February 1, 2020. The provision of ASU 2019-12 which has the most significant impact on the Company is the removal of a limitation on the tax benefit recognized on pre-tax losses during interim periods which exceed the expected loss for the fiscal year. The Company’s income tax benefit includes an income tax benefit of $2.2 million as a result of early adoption in the first quarter of fiscal 2021.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”, which modifies the disclosure requirements in ASC 820, Fair Value Measurement. This guidance is 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.

The Company adopted ASU 2016-02, “Leases”, on February 1, 2019, the first day of fiscal 2020, using the modified retrospective approach and accordingly the Company is showing a cumulative effect adjustment in the first quarter of 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 a result of $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 results of operations or cash flows. See Note 10 – ~~Leases for additional lease disclosures.~~

In August 2017, the FASB issued ASU 2017-12. ASU 2017-12 amends and simplifies hedge accounting guidance in order to enable entities to better portray the economics of 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 2018-072018-13 during the first quarter of fiscal ~~2020.~~2021. The adoption of this guidance did not have an impact on the Company’s ~~consolidated~~Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequently issued additional guidance that modified ASU 2016-13. This standard introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial ~~statements.~~instruments, including trade receivables. The estimate of expected credit losses requires entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This may result in the earlier recognition of allowance for losses. The Company adopted ASU 2016-13 on February 1, 2020. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. Results for reporting periods as of February 1, 2020 are presented under the new standard, while prior results continue to be reported under the previous standard.

The Company presents net ~~income~~income/(loss) attributable to Movado Group, Inc. after adjusting for ~~redeemable~~ noncontrolling ~~interest,~~interests, 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, 2020 and 2019, approximately 891,000 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. For the three months ended April 30, 2020, the Company also had approximately 120,000 stock options outstanding that could potentially dilute earnings per share in future periods that were excluded from the computation of diluted EPS because their effect would have been anti-dilutive given the net loss during the period.

During the first quarter of fiscal 2021 the Company did not declare quarterly cash dividends. During the first quarter of fiscal 2020, 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 November 22, 2019, the Company entered into an agreement and formed a joint venture with GDL Accessories PTY Ltd. (“GDL”), an Australian based company. The agreement established a joint venture, MGDL Distribution Pty Ltd (“MGDL”), and set out the terms in which both parties will govern their relationship as shareholders of MGDL, and the terms on which the joint venture will be managed.

The joint venture was formed to more cost effectively market and distribute Movado products to customers in Australia and in New Zealand (GDL was the sole distributor prior to agreement).

The Company contributed $0.9 million Australian dollars, or $0.6 million US dollars, to the joint venture and is a 51% interest holder. The Company controls all of the significant participating rights of the joint venture. As the Company controls all of the significant participating rights of the joint venture and is the majority interest holder in MGDL, the assets, liabilities and results of operations of the joint venture are consolidated and included in the Company’s Consolidated Financial Statements since the date of acquisition within the Watch and Accessory Brands segment. GDL’s interest is reflected in Net income attributable to noncontrolling interest in the Consolidated Statements of Operations and Noncontrolling interest in the Consolidated Balance Sheets. As of April 30, 2020, all amounts in the Consolidated Financial Statements related to MGDL were immaterial.

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, or $4.8 million, net of cash acquired, and was funded with cash on hand. The results of City Time have been included in the ~~consolidated financial statements~~Company’s 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,~~2020, the Company concluded that the remeasurement adjustment is immaterial. If the noncontrolling interest holder does not exercise its right to sell its interest in City Time to the Company, the Company nevertheless has the option to purchase the noncontrolling interest holder’s interest on each of the same two dates and at the same price as would have applied if the noncontrolling interest holder had exercised its sale option.

On October 1, 2018, the Company acquired MVMT Watches, Inc., owner of the MVMT brand, for an initial payment of $100.0 million and ~~two~~2 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~~Company recorded goodwill (as of October 1, 2018) of $77.5 million based on ~~hand and adds a new brand with significant global growth potential to~~ the ~~Company’s portfolio.~~

~~The results of~~amount by which 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~~purchase price exceeded the fair value of the net assets ~~acquired and liabilities assumed as~~acquired. As the structure of the ~~October 1, 2018~~ acquisition ~~date (in thousands):~~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.

Inventories (as of October 1, 2018) included a step-up adjustment of $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~~included a contingent consideration arrangement based on the 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 (through 2023), volatilities, estimated discount rates, risk-free interest rate, and correlation. ~~Each reporting period after the acquisition, the Company will revalue the~~Based on changes in projected financial performance, the contingent purchase price liability had been remeasured at July 31, 2019 to $1.9 million and ~~record increases~~to 0 at January 31, 2020. Of the $16.9 million (including interest accretion) decrease in the liability, $15.4 million was included in non-operating income (portion of contingent consideration allocated to purchase price) in the Consolidated Statements of Operations for the year ended January 31, 2020, and $0.5 million and $1.0 million were reflected as a reduction of deferred compensation (portion of contingent consideration allocated to deferred compensation based on future service requirements) within other current assets and other non-current assets, respectively, in the Consolidated Balance Sheets.

In connection with the remeasurement of the contingent consideration during the fiscal year ended January 31, 2020, the Company assessed the undiscounted cash flows associated with the long-lived assets pertaining to MVMT. Current estimates at that time indicated that carrying amounts were expected to be recovered. The undiscounted cash flows related to the MVMT long-lived assets as of January 31, 2020 exceeded the carrying value by approximately 33%. See Note 6 – Goodwill and Intangible Assets for impairment of MVMT’s long-lived assets as of April 30, 2020.

The Company performs its annual impairment assessment of goodwill as well as brand intangibles at the beginning of the fourth quarter of each fiscal year or ~~decreases in~~if an event occurs that would more likely than not reduce the fair value ~~of the liability in~~below its Consolidated Statements of Operations. Changes in fair value will result from changes in actual and 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. carrying amount.

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 a reduction in operating income in the Consolidated Statement of Operations forDuring the three months ended April 30, ~~2019. Refer~~2020, in light of the COVID-19 pandemic that resulted in the closing of the Company’s stores and of the vast majority of the stores of the Company’s wholesale customers (resulting in a decrease in revenues and gross margin), a decrease in customer spending and the recent decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred during the first quarter, resulting in the need to ~~Note 7 for further discussion of fair value measurements.~~perform a quantitative interim impairment assessment over the Company’s Olivia Burton, MVMT and Company Stores’ long-lived assets as well as the Watch and Accessory reporting unit.

The Company performed recoverability tests for the long-lived assets of MVMT, Olivia Burton and the Company Stores as of April 30, 2020. The Company concluded that the carrying amounts of the long-lived assets of Olivia Burton and the Company Stores were recoverable, while the long-lived assets of MVMT may not be recoverable. Utilizing a royalty rate to determine discounted projected future cash flows in the valuation of MVMT’s trade name and a discounted cash flow method for the valuation of MVMT’s customer relationships, the Company concluded that the fair values of MVMT’s tradenames and customer relationships did not exceed their carrying values. As a result, the Company recorded impairment charges in the Watch and Accessory Brands segment totaling $22.2 million during the three months ended April 30, 2020, decreasing MVMT’s trade name to $2.4 million and MVMT’s customer relationships to 0.

After adjusting the carrying value of MVMT’s intangible assets, the Company completed an interim quantitative impairment test of goodwill ~~(as~~as of ~~October 1, 2018) of $77.5 million based on the amount by~~April 30, 2020 in which the ~~purchase price exceeded~~Company compared the fair value of the ~~net assets acquired. As~~Watch and Accessory reporting unit to its respective carrying value. An impairment test of goodwill was not performed for the ~~structure~~Company Stores reporting unit as there was 0 goodwill at this reporting unit. The fair value estimate for the Watches and Accessory reporting unit was based on the income and market approaches. The discounted cash flow method under the income approach involves estimating the cash flows in a discrete forecast period and a terminal value based on the Gordon Growth Model and discounting at a rate of return that reflects the relative risk of the ~~acquisition allowed for a step up in basis for tax purposes,~~cash flows. The market approach involves applying valuation multiples to the ~~full amount~~operating performance of ~~goodwill is deductible for federal income tax purposes over 15 years.~~

~~The following table provides~~ the ~~Company’s unaudited pro forma net sales, net income~~Watch and ~~net income per basic~~Accessory reporting unit derived from comparable publicly traded companies based on the relative historical and ~~diluted common share as if the results of~~projected operations of the ~~MVMT brand had been included~~reporting unit.

The key estimates used in the discounted cash flows model included the Company’s ~~operations commencing on February 1, 2018,~~weighted average cost of capital and projected cash flows, notably revenue growth rates and margin assumptions. The Company’s assumptions were based on ~~available information relating to operations~~the actual historical performance of the ~~MVMT brand. This pro forma information is not necessarily indicative either~~reporting units and took into account the recent severe and continued weakening of operating results as well as the anticipated rate of recovery, and implied risk premiums based on market prices of the ~~combined results of operations that actually would have been realized by the Company had the MVMT brand acquisition been consummated at the beginning~~Company’s common stock as of the ~~period for which~~assessment date. The significant estimates in the ~~pro forma information is presented, or~~market approach model included identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples in estimating the fair value of ~~future results.~~the reporting unit. The excess of the Watch and Accessory unit’s carrying value over the estimate of the fair value was recorded in the Watch and Accessory Brands segment as the goodwillimpairment charge in the first quarter of 2020, totaling $133.7 million. As of April 30, 2020, 0 goodwill remains.

The changes in the carrying amount of other intangible assets during the three months ended April 30, ~~2019~~2020 are as follows (in thousands):

Amortization expense for intangible assets was $1.3 million and $1.5 million for the three months ended April 30, 2020 and 2019, respectively.

On October 12, 2018, the Company, together with Movado Group Delaware Holdings Corporation, Movado Retail Group, Inc. and Movado LLC (together with the Company, the “U.S. Borrowers”), each a wholly owned domestic subsidiary of the Company, and Movado Watch Company S.A. and MGI Luxury Group S.A. (collectively, the “Swiss Borrowers” and, together with the U.S. Borrowers, the “Borrowers”), each a wholly owned Swiss subsidiary of the Company, entered into an Amended and Restated Credit Agreement (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 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”) provided thereunder to October 12, 2023. The Facility includes a $15.0 million letter of credit subfacility, a $25.0 million swingline subfacility and a $75.0 million sublimit for borrowings by the Swiss Borrowers, with provisions for uncommitted increases to the Facility of up to $50.0 million in the aggregate subject to customary terms and conditions.

On June 5, 2020, the Company and its lenders entered into an amendment (the “Second Amendment”) to the Credit Agreement effective as of April 30, 2020. Among other things, the Second Amendment provides for the following temporary relief with respect to the financial maintenance covenants in the Credit Agreement from April 30, 2020 through the date on which the Company delivers a compliance certificate in respect of the period ended July 31, 2021 (or earlier if the Company demonstrates satisfaction of certain earnings and leverage milestones) (the “Suspension Period”): (i) the maximum consolidated leverage ratio is increased from 2.50 to 1.0 to 2.75 to 1.0 for the four quarter period ended April 30, 2020 and suspended thereafter until the end of the Suspension Period when it resumes at 2.50 to 1.0 and (ii) the minimum EBITDA covenant levels are reduced. In addition, the Second Amendment provides that (i) through April 30, 2021, the Company is required to maintain minimum liquidity (comprised of unrestricted cash and cash equivalents and unutilized commitments under the Credit Agreement) of $100.0 million, (ii) during the Suspension Period, certain covenants, including covenants related to dividends, debt incurrence, investments and capital expenditures, have been tightened and (iii) during the Suspension Period, the interest rate for borrowings under the Credit Agreement is increased to LIBOR plus 2.75% per annum and the commitment fee in respect of the unutilized commitments is increased to 0.45% per annum. In addition, the Second Amendment permanently increased the LIBOR floor for loans under the Credit Agreement from 0% to 1.00% and permanently reduced the minimum EBITDA financial covenant level to $35.0 million starting with the four-quarter period ending July 31, 2021.

As of April 30, ~~2019,~~2020, and April 30, ~~2018,~~2019, there ~~were~~was 70.0 million and 50.0 million in Swiss ~~francs~~Francs, respectively (with a dollar equivalent of $72.5 million and $49.1 ~~million) and~~ ~~zero~~million, respectively), ~~respectively,~~in addition to $10.0 million as of April 30, 2020, in loans outstanding under the Facility. Availability under the Facility was reduced by the aggregate number of letters of credit outstanding, issued in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada, totaling approximately $0.3 million at both April 30, ~~2019~~2020 and April 30, ~~2018.~~2019. At April 30, ~~2019,~~2020, the letters of credit have expiration dates through ~~April 26,~~June 1, 2020. As of April 30, ~~2019,~~2020, and April 30, ~~2018,~~2019, availability under the Facility was $17.2 million and $50.6 million, ~~and $99.7 million,~~ respectively.

The Company had weighted average ~~borrowing~~borrowings under the facility of $65.6 million and $49.8 million during the three months ended April 30, 2020 and ~~$7.8 million,~~2019, respectively, with a weighted average interest rate of ~~1.00%~~1.17% and ~~0.96%,~~1.00% during the ~~first quarter of fiscal~~three months ended April 30, 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 April 30, ~~2019,~~2020, and ~~2018,~~2019, these lines of credit totaled 6.5 million Swiss ~~francs~~Francs for both periods, with a dollar equivalent of ~~$6.4~~$6.7 million and ~~$6.6~~$6.4 million, respectively. As of April 30, ~~2019,~~2020, and ~~2018,~~2019, there were no0 borrowings against these lines. As of April 30, 2020, and 2019, ~~and 2018, two~~2 European banks had guaranteed obligations to third parties on behalf of ~~two~~2 of the Company’s foreign subsidiaries in the dollar equivalent of ~~$1.1~~$1.2 million and ~~$1.2~~$1.1 million, respectively, in various foreign currencies, of which ~~$0.5~~$0.6 million and ~~$0.6~~$0.5 million, respectively, was a restricted deposit as it relates to lease agreements.

Cash paid for interest, including unused commitments fees, was $0.2 million for ~~both~~the three-month period ended April 30, ~~2019~~2020 and April 30, ~~2018.~~2019.

As of April 30, ~~2019,~~2020, the Company’s entire net forward contracts hedging portfolio consisted of ~~40.4~~38.4 million Chinese Yuan equivalent, ~~31.0~~12.0 million Swiss ~~francs~~Francs equivalent, ~~15.3~~9.8 million US dollars equivalent, ~~14.2~~17.9 million Euros equivalent and ~~1.9~~2.5 million British Pounds equivalent with various expiry dates ranging through ~~October 29, 2019.~~September 10, 2020. 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,~~cost of sales, selling and general and administrative expenses in the Consolidated Statements of Operations. The cash flows related to these foreign currency contracts are classified toin operating activities.

~~The following table summarizes the~~See Note 10 – Fair Value Measurements for fair value and presentation in the Consolidated Balance Sheets for ~~derivatives (in thousands):~~

For the quarter ended April 30, ~~2019,~~2020, the Company did ~~not~~0t have any cash flow hedges.

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 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~~2020 and ~~2018~~2019 and January 31, ~~2019~~2020 (in thousands):

		Fair Value at April 30, 2019									Fair Value at April 30, 2020
	Balance Sheet Location	Level 1		Level 2		Level 3		Total		Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	178	$	—	$	—	$	178	Other current assets	$	133	$	—	$	—	$	133
Short-term investment	Other current assets		152		—		—		152	Other current assets		148		—		—		148
SERP assets - employer	Other non-current assets		978		—		—		978	Other non-current assets		964		—		—		964
SERP assets - employee	Other non-current assets		41,268		—		—		41,268	Other non-current assets		41,759		—		—		41,759
Defined benefit plan assets	Other non-current liabilities		—		—		31,202		31,202	Other non-current liabilities		—		—		22,799		22,799
Hedge derivatives	Other current assets		—		8		—		8	Other current assets		—		5		—		5
Total		$	42,576	$	8	$	31,202	$	73,786		$	43,004	$	5	$	22,799	$	65,808
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	41,268	$	—	$	—	$	41,268	Other non-current liabilities	$	41,735	$	—	$	—	$	41,735
Hedge derivatives	Accrued liabilities		—		509		—		509	Accrued liabilities		—		29		—		29
Contingent purchase price liability	Other non-current liabilities		—		—		16,884		16,884
Total		$	41,268	$	509	$	16,884	$	58,661		$	41,735	$	29	$	—	$	41,764

		Fair Value at January 31, 2019									Fair Value at January 31, 2020
	Balance Sheet Location	Level 1		Level 2		Level 3		Total		Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	177	$	—	$	—	$	177	Other current assets	$	184	$	—	$	—	$	184
Short-term investment	Other current assets		155		—		—		155	Other current assets		156		—		—		156
SERP assets - employer	Other non-current assets		860		—		—		860	Other non-current assets		988		—		—		988
SERP assets - employee	Other non-current assets		38,170		—		—		38,170	Other non-current assets		45,256		—		—		45,256
Defined benefit plan assets	Other non-current liabilities		—		—		33,223		33,223	Other non-current liabilities		—		—		24,227		24,227
Hedge derivatives	Other current assets		—		22		—		22	Other current assets		—		347		—		347
Total		$	39,362	$	22	$	33,223	$	72,607		$	46,584	$	347	$	24,227	$	71,158
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	38,170	$	—	$	—	$	38,170	Other non-current liabilities	$	45,264	$	—	$	—	$	45,264
Hedge derivatives	Accrued liabilities		—		156		—	$	156
Contingent purchase price liability	Other non-current liabilities		—		—		16,718		16,718
Contingent consideration										Other non-current liabilities		—		—		—		—
Total		$	38,170	$	156	$	16,718	$	55,044		$	45,264	$	—	$	—	$	45,264

		Fair Value at April 30, 2018									Fair Value at April 30, 2019
	Balance Sheet Location	Level 1		Level 2		Level 3		Total		Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	251	$	—	$	—	$	251	Other current assets	$	178	$	—	$	—	$	178
Short-term investment	Other current assets		157		—		—		157	Other current assets		152		—		—		152
SERP assets - employer	Other non-current assets		1,008		—		—		1,008	Other non-current assets		978		—		—		978
SERP assets - employee	Other non-current assets		37,210		—		—		37,210	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		—		124		—		124	Other current assets		—		8		—		8
Total		$	38,626	$	124	$	—	$	38,750		$	42,576	$	8	$	31,202	$	73,786
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	37,210	$	—	$	—	$	37,210	Other non-current liabilities	$	41,268	$	—	$	—	$	41,268
Hedge derivatives	Accrued liabilities		—		704		—		704	Accrued liabilities		—		509		—		509
Contingent consideration										Other non-current liabilities		—		—		16,884		16,884
Total		$	37,210	$	704	$	—	$	37,914		$	41,268	$	509	$	16,884	$	58,661

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~~Franc and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates. The carrying amount of debt approximated fair value as of April 30, ~~2019,~~2020, January 31, 2020, and ~~January 31,~~April 30, 2019, due to the availability and floating rate for similar instruments.

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~~2020 and ~~January 31,~~April 30, 2019.

The ~~fair value of the Level 3~~ contingent purchase price liability related to the acquisition of MVMT Watches, Inc., owner of the MVMT ~~a global aspirational lifestyle~~ brand, is ~~measured using~~considered a ~~Monte Carlo simulation with key assumptions that include~~Level 3 liability. Based on updated revenue and ~~brand~~ EBITDA (as defined in the acquisition agreement) ~~of the acquired business~~performance expectations during the earn-out period ~~volatilities, estimated discount rates, risk-free rate, and correlation. The~~for MVMT, the Company remeasured the contingent consideration to 0 at January 31, 2020. During the three months ended April 30, 2019, the liability iswas revalued ~~each reporting period after the acquisition and increases or decreases~~with an increase in the fair value of the liability ~~are~~of $0.2 million and was recorded in the Consolidated ~~Statements~~Statement 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 no0 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 had previously recorded an obligation of $28.2 million due to the 2017 Tax ~~Cuts and Jobs~~ Act, which was signed into law on December 22, 2017 and imposed a one-time mandatory deemed repatriation tax on cumulative undistributed foreign earnings which have not been previously taxed. The obligation, which was recorded in prior years, is payable in installments over eight years, with the first payment having been made in the second quarter of 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, 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 $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 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~~2 future contingent payments that combined could total up to $100 million. ~~Although~~Based on updated revenue and EBITDA (as defined in the acquisition agreement) performance expectations during the earn-out period for MVMT, the Company ~~has established appropriate reserves for this liability based on its current estimate of~~remeasured 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~~contingent consideration 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~~0 at January 31, 2020 (see Note 45 – ~~Acquisitions)~~Acquisitions and Note 10 – Fair Value Measurements).

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 April 30, ~~2019,~~2020, 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 March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which provides economic relief to assist American families and companies during the COVID-19 global pandemic. The CARES Act includes, among other things, provisions related to net operating loss carryback periods, refundable payroll tax credits and the delay of certain payroll taxes, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act allows U.S. net operating losses generated in fiscal 2019, 2020, and 2021 to be carried back up to five years and to offset 100% of regular taxable income in such years. The Company anticipates that there will be a U.S. net operating loss generated in fiscal 2021 which will be carried back to prior taxable years. The Company continues to evaluate other impacts of the CARES Act.

The Company recorded an income tax benefit of $32.3 million and income tax expense of $0.8 ~~million and income tax benefit $0.1~~ million for the three months ended April 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

The effective tax rate was17.7% for both three months ended April 30, 2020 and ~~-1.8%~~2019, respectively. The significant components of the effective tax rate changed primarily due to the recording of valuation allowances on certain foreign deferred tax assets and impairments of the portion of goodwill of the Watch and Accessory reporting unit which is not tax deductible, both of which occurred during the first quarter of fiscal 2021. These changes were partially offset by changes in foreign profits in lower tax jurisdictions and the impact of the CARES Act, which enables the Company to carry back U.S. net operating losses generated in fiscal 2021 into prior taxable years with a U.S. statutory tax rate of 35.0%.

The effective tax rate for the three months ended April 30, ~~2019 and 2018, respectively. The change in~~2020 differs from the ~~effective~~U.S. statutory tax rate ~~was~~of 21.0% primarily due to impairments of the ~~release~~portion of ~~valuation allowances against certain foreign deferred~~goodwill of the Watch and Accessory reporting unit which is not tax ~~assets~~deductible, partially offset by the impact of the CARES Act, which enables the Company to carry back U.S. net operating losses generated in ~~the~~fiscal 2021 into prior ~~year.~~taxable years with a U.S. statutory tax rate of 35.0%.

The effective tax rate for the three months ended April 30, 2019 differs from the U.S. statutory tax rate of 21.0% primarily due to foreign profits ~~being taxed~~ in lower ~~taxing~~tax jurisdictions and excess tax benefits related to stock-based compensation, partially offset by no0 tax benefit being recognized on operating results of certain foreign subsidiaries.

In December 2019, the FASB issues ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in “Income Taxes (Topic 740)”. It also clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. The Company early adopted this standard effective February 1, 2020. The provision of ASU 2019-12 which has the most significant impact on the Company is the removal of a limitation on the tax ~~rate~~benefit recognized on pre-tax losses during interim periods which exceed the expected loss for the ~~three months ended~~fiscal year. The Company’s income tax benefit includes an income tax benefit of $2.2 million as a result of early adoption in the first quarter of fiscal 2021.

As of April 30, ~~2018 differs from~~2020, the ~~U.S. statutory tax rate of 21.0% primarily due to the release of a valuation allowance against certain foreign~~Company had 0 deferred tax ~~assets and a decrease~~liability for the undistributed foreign earnings of approximately $181.3 million because the Company intends to continue permanently reinvesting such earnings in its foreign operations. It is not practicable to estimate the ~~deferred withholding~~ tax liability ~~on unremitted earnings resulting from changes in currency exchange rates.~~related to a future distribution of these permanently reinvested foreign earnings.

The components of equity for the three months ended April 30, ~~2019~~2020 and ~~2018~~2019 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

$
—

			Movado Group, Inc. Shareholders' Equity
	Preferred Stock		Common Stock (1)		Class A Common Stock (2)		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest			Total Movado Group, Inc. Shareholders' Equity			Redeemable Noncontrolling Interest
Balance, January 31, 2020	$	—	$	279	$	65	$	208,473		$	455,479		$	85,050		$	(222,809	)	$	707		$	527,244		$	3,165
Net income/(loss) attributable to Movado Group, Inc.											(149,993	)								59			(149,934	)		(155	)
Stock options exercised				1				(1	)								(367	)					(367	)
Supplemental executive retirement plan								26															26
Stock-based compensation expense								1,572															1,572
Net unrealized loss on investments, net of tax benefit of $13														(38	)								(38	)
Amortization of prior service cost, net of tax provision of $4														13									13
Foreign currency translation adjustment (3)														(7,951	)					(20	)		(7,971	)		(44	)
Balance, April 30, 2020	$	—	$	280	$	65	$	210,070		$	305,486		$	77,074		$	(223,176	)	$	746		$	370,545		$	2,966

	Preferred Stock		Common Stock (1)		Class A Common Stock (2)		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest			Total Movado Group, Inc. Shareholders' Equity			Redeemable Noncontrolling Interest
Balance, January 31, 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

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~~Under the 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 $5.5~~ ~~million had been repurchased. Under the existing program, 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. See Note 8 – Debt and Lines of Credit – for restrictions on share repurchase under the Company’s revolving credit facility.

During the three months ended April 30, ~~2019,~~2020, the Company did 0t repurchase shares of its common stock under the ~~existing~~ repurchase ~~program,~~program. Duringthe three months ended April 30, 2019, the Company repurchased a total of 78,402 shares of its common stock under the share repurchase program 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.

At April 30, ~~2019, $38.0~~2020, $36.4 million remains available for purchase under the Company’s ~~current~~ repurchase program.

There were ~~42,127~~36,923 and ~~16,111~~42,127 shares of common stock repurchased during the three months ended April 30, ~~2019~~2020 and ~~2018,~~2019, 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.

The accumulated balances at April 30, ~~2019~~2020 and ~~2018,~~2019, and January 31, ~~2019,~~2020, related to each component of accumulated other comprehensive income (loss) are as follows (in thousands):

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 1718 – 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 Watch and Accessory Brands ~~Segment~~segment (see Note 1718 – 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, ecommerce and ~~ecommerce~~consumer repairs is included within the Watch and Accessory Brands ~~Segment;~~segment; revenue derived from outlet stores is included within the Company Stores Segment (see Note 1718 – Segment and Geographic Information). Direct to Consumer revenue is included in either the Watch and Accessory Brands segment or 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 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 customers and authorized third party repair centers, and sale of watch parts. The Company recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied and control is transferred to the customer. After-sales service revenue is measured as the amount of consideration the Company ultimately expects to receive in exchange for transferring goods. Revenue from after sales service, including consumer repairs, is included entirely within the Watch and Accessory Brands ~~Segment,~~segment, consistent with how management makes decisions about the allocation of resources and performance measurement.

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~~three 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, 2020 and 2019 ~~and April 30, 2018~~ was ~~$0.2~~$0.1 million (net of tax of ~~$0.1 million)~~approximately $22,000) and ~~$0.4~~$0.2 million (net of tax of $0.1 million), respectively. As As of April 30, ~~2019,~~2020, all stock options have vested so, as a result, there was $~~0.4~~ ~~million of~~ 0 unrecognized compensation cost related to unvested stock options. Total consideration received for stock option exercises during the three months ended April 30, 2020 and 2019 was 0 and ~~2018 was $0.2~~$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:~~2021:

~~The fair value of~~There were 0 stock options exercised during the first quarter of fiscal ~~2020 was approximately $63,000 and the intrinsic value was approximately $47,000~~2021.

Under the Plan, the Company can also grant stock awards to ~~employees.~~employees and directors. For the three months ended April 30, ~~2019~~2020 and ~~April 30, 2018,~~2019, compensation expense for stock awards was $1.1 million (net of tax of $~~0.3~~0.4 million), and $~~1.1~~$1.1 million (net of tax of $~~0.4~~$0.3 million), respectively. As of April 30, ~~2019,~~2020, there was $~~13.1~~6.4 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:~~2021:

Outstanding stock awards can be classified as either time-based stock awards or performance-based stock awards. Time-based stock awards vest over time subject to continued employment. Performance-based stock awards vest over time subject both to continued employment and to the achievement of corporate financial performance goals. Upon the vesting of a stock award, shares are issued from the pool of authorized shares. For performance-based stock awards, the number of shares issued related to the performance units granted can vary from 0% to 150% of the target number of underlying stock award units, depending on the extent of the achievement of predetermined financial goals. The total fair value of stock award units that vested during the first ~~quarter~~three months of fiscal ~~2020~~2021 was $~~4.7~~ 3.8 million. The number of shares issued related to the remaining stock awards are established at grant date.

The Company conducts its business in ~~two~~2 operating segments: Watch and Accessory Brands and Company Stores. The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, 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 physical retail outlet locations. The Chief Executive Officer of the Company is the chief operating decision maker (“CODM”) and regularly reviews operating results for each of the two operating segments to assess performance and makes operating decisions about the allocation of the Company’s resources.

The Company divides its business into ~~two~~2 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), Asia and the Middle East accounted for 37.8%, 9.1%, 8.3% and 3.8%, respectively, of the Company’s total net sales for the three months ended April 30, 2020. For the three months ended April 30, 2019, 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~~2020 and ~~2018~~2019 (in thousands):

Geographic Location Data as of and for the Three Months Ended April 30, ~~2019~~2020 and ~~2018~~2019 (in thousands):

~~The~~ United States and International net sales are net of intercompany sales of ~~$77.9~~$42.8 million and ~~$64.6~~$77.9 million for the three months ended April 30, ~~2019~~2020 and ~~2018,~~2019, 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, inventory levels, plans for future operations, expectations regarding capital expenditures, operating efficiency initiatives and other items, cost savings initiatives, and operating expenses, effective tax rates, margins, interest costs, and income as well as assumptions relating to the foregoing. Forward-looking statements are subject to certain risks and uncertainties, some of which cannot be predicted or quantified. Actual results and future events could differ materially from those indicated in the forward-looking statements, due to several important factors herein identified, among others, and other risks and factors identified from time to time in the Company’s reports filed with the SEC, including, without limitation, the following: general economic and business conditions which may impact disposable income of consumers in the United States and the other significant markets (including Europe) where the Company’s products are ~~sold,~~sold; uncertainty regarding such economic and business ~~conditions,~~conditions; trends in consumer debt levels and bad debt ~~write-offs,~~write-offs; general uncertainty related to possible terrorist attacks, natural disasters, pandemics, including the effect of the COVID-19 pandemic and other diseases on travel and traffic in the Company’s retail stores and wholesale business; supply disruptions and delivery delays from the Company’s Chinese and other suppliers as a result of the COVID-19 pandemic; adverse impact on the Company’s wholesale customers and customer traffic in the Company’s stores as a result of increased uncertainty and economic disruption caused by the COVID-19 pandemic; the stability of the European Union (including the impact of the United Kingdom’s process to exit from the European Union); the stability of the United Kingdom after its exit from the European Union, and defaults on or downgrades of sovereign debt and the impact of any of those events on consumer ~~spending,~~spending; changes in consumer preferences and popularity of particular designs, new product development and ~~introduction,~~introduction; decrease in mall traffic and increase in ~~e-commerce,~~e-commerce; the ability of the Company to successfully implement its business strategies, competitive products and ~~pricing,~~pricing; the impact of “smart” watches and other wearable tech products on the traditional watch ~~market, seasonality,~~market; seasonality; availability of alternative sources of supply in the case of the loss of any significant supplier or any supplier’s inability to fulfill the Company’s ~~orders,~~orders; the loss of or curtailed sales to significant ~~customers,~~customers; the Company’s dependence on key employees and ~~officers,~~officers; the ability to successfully integrate the operations of acquired businesses ~~(including the Olivia Burton and MVMT brands)~~ without disruption to other business ~~activities,~~activities; the possible impairment of acquired intangible assets including goodwill if the carrying value of any reporting unit were to exceed its fair value; volatility in reported earnings resulting from changes in the estimated fair value of contingent acquisition consideration; the continuation of the ~~company’s~~Company’s major warehouse and distribution ~~centers,~~centers; the continuation of licensing arrangements with third ~~parties,~~parties; losses possible from pending or future ~~litigation,~~litigation; the ability to secure and protect trademarks, patents and other intellectual property ~~rights,~~rights; the ability to lease new stores on suitable terms in desired markets and to complete construction on a timely ~~basis,~~basis; the ability of the Company to successfully manage its expenses on a continuing ~~basis,~~basis; information systems failure or breaches of network ~~security,~~security; the continued availability to the Company of financing and credit on favorable ~~terms,~~terms; business ~~disruptions,~~disruptions; and general risks associated with doing business outside the United States including, without limitation, import duties, tariffs (including retaliatory tariffs), quotas, political and economic stability, changes to existing laws or regulations, and success of hedging strategies with respect to currency exchange rate fluctuations.

These risks and uncertainties, along with the risk factors discussed under Item 1A. “Risk Factors” in the Company’s ~~2019~~2020 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 Company’s ~~consolidated financial statements~~Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and those significant policies are more fully described in Note 1 to the Company’s ~~consolidated financial statements.~~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 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 on various other factors that are believed to be reasonable under the circumstances. Actual results could differ from 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 ~~2019~~2020 Annual Report on Form 10-K and are incorporated by reference herein.

~~Under~~In the ~~MVMT acquisition agreement,~~first quarter of 2020, the ~~estimated fair value~~Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13. As a result of adoption, the Company replaced its methodology in determining the allowance for doubtful accounts which was based on an analysis of the ~~contingent consideration was determined using a Monte Carlo simulation with key assumptions that include revenue and brand EBITDA~~aging of accounts receivable, assessments of collectability based on historical trends, the financial condition of the ~~acquired business~~Company’s customers and an evaluation of economic conditions with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss rate for its trade accounts receivables. The adoption had no material impact on the Company’s Consolidated Financial Statements.

The Company performs its annual impairment assessment of goodwill and long-lived intangible assets at the beginning of the fourth quarter of each fiscal year. The Company determined that there was no impairment in fiscal 2020. During the three months ended April 30, 2020, in light of the COVID-19 induced closing of the Company’s stores and the stores of the vast majority of the Company’s wholesale customers (resulting in a decrease in revenues and gross margin), decrease in customer spending and the recent decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred during the ~~earn-out period, volatilities, estimated discount rates, risk-free rate,~~first quarter, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Olivia Burton, MVMT and ~~correlation (see Note 4 – Acquisitions).~~Company Stores’ long-lived assets, as well as the Watch and Accessory reporting unit. The assessment concluded that the fair values of MVMT’s tradename and customer relationships and Watch and Accessory reporting unit did not exceed their respective carrying values. This analysis resulted in impairment charges related to goodwill of $133.7 million and intangible assets of $22.2 million in the first quarter of fiscal 2021.

As of April 30, 2020, there have been no material changes to any of the Company’s critical accounting policies ~~disclosed in~~other than the ~~Company’s 2019 Annual Report on Form 10-K.~~

On 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 June 25, 2019 to all shareholders of record as of the close of business on June 11, 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.changes mentioned above.

The Company conducts its business ~~primarily~~ 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 and, to a lesser extent, jewelry and other accessories, of ~~quality~~ owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Company Stores segment includes the Company’s physical retail outlet 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 and accessory business into two principal categories: the owned brands category and the licensed brands category. The owned brands category consists of the Movado®, ~~Ebel®~~Concord®, ~~Concord®~~Ebel®, Olivia Burton® and MVMT® brands. ~~Watches~~Products 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®, 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 due to the impact of royalty payments made on the licensed brands. Gross margins in the Company’s e-commerce business generally earn higher gross margin percentages than those of the traditional wholesale business. Gross margins in the Company’s outlet business are affected by the mix of product sold and may exceed those of the wholesale business since the Company earns margins on its outlet store sales from manufacture to point of sale to the consumer.

In light of the COVID-19 pandemic, the Company’s results of operations for the first quarter of fiscal 2021 may not be indicative of the results that the Company will experience in the full fiscal year 2021. In addition to the delivery delays from the Company’s Chinese suppliers that resulted from factory closures in China during the initial phase of the crisis, the virus has now impacted the Company’s worldwide operations as well as those of the Company’s customers. In response to the outbreak, in mid-March 2020, the Company and the majority of the Company’s wholesale customers closed all of their retail stores indefinitely due to health concerns associated with the COVID-19 pandemic; however, in certain regions, the Company’s wholesale customers have begun to open their stores. Furthermore, various containment and mitigation measures that have been imposed by governmental and other authorities around the world (such as quarantines and other social distancing requirements) have materially adversely affected sales of the Company’s products, which are heavily dependent on customer traffic in our Company Stores and in the stores of the Company’s wholesale customers. The continuation or tightening of such measures would have a further material adverse effect on the Company’s results of operations and financial condition. In addition, as the Company’s potential customers face layoffs and other negative economic impacts from the COVID-19 outbreak, their disposable income for discretionary purchases and their actual or perceived wealth may be negatively impacted, potentially exacerbating the impact on the Company’s net sales. The ongoing impact of the outbreak of COVID-19 on the Company’s liquidity, revenues, impairment considerations surrounding the Company’s indefinite and long-lived assets and results of operations cannot be reasonably predicted at this time due to the high level of uncertainty, unknown future developments, duration of containment measures and the timeline for recovery.

In response to this challenging environment, while the Company’s focus remains on the health and safety of our associates, customers and business partners, the Company is taking the following actions:

In addition, the Company is developing a long-term strategy to reduce operating expenses, streamline the organization and maintain a high level of variable expenses enabling the Company to be more responsive to further shifts in trends and the retail environment.

The Company will continue to consider near-term demands and the long-term financial health of the business as steps are taken to mitigate the consequences of the COVID-19 pandemic and the uncertain business environment.

During the three months ended April 30, 2020, in light of the COVID-19 pandemic that resulted in the closing of the Company’s stores and of the vast majority of the stores of the Company’s wholesale customers (resulting in a decrease in revenues and gross margin), a decrease in customer spending and the recent decline in global equity markets, the Company concluded that a triggering event had occurred during the first quarter, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Olivia Burton, MVMT and Company Stores’ long-lived assets as well as the Watch and Accessory reporting unit.

The Company made revisions to its internal forecasts, resulting in a reduction in both current and future expected cash flows, due to the COVID-19 pandemic and the uncertain business environment. As a result, during the first quarter of fiscal 2021, the Company recorded impairment charges related to goodwill of $133.7 million and intangible assets related to MVMT’s tradename and customer relationships of $22.2 million.

During the first quarter of fiscal 2021, the Company recorded $3.5 million of increases in inventory reserves and $1.1 million increases in allowance for doubtful accounts, similarly driven by current and expected changes to operations as result of the COVID-19 pandemic.

Starting in July 2018, the Trump Administration announced a series of lists covering thousands of categories of Chinese origin products subject to potential U.S. special tariffs of 10% to 25% of import value, in addition to the regular tariffs that have historically applied to such products. Certain of the Company’s packaging products became subject to a U.S. special 10% tariff in September 2018, which was increased to 25% effective May 10, 2019. In addition, all of the Company’s smart watches became subject to a U.S. special 15% tariff on September 1, 2019, and in a third-party ruling, U.S. Customs and Border Patrol (“CBP”) has taken the position that this U.S. special 15% tariff applies broadly to China-sourced cases and bands on watches assembled in China and other countries. Under this position, most of the cases and bands used in the production of the Company’s traditional watches imported into the U.S. became subject to the U.S. special 15% tariff effective September 1, 2019. A pending request to CBP for reconsideration and revocation of the ruling has been filed on behalf of the Company and certain other watch importers on the basis that the CBP ruling is inconsistent with CBP’s longstanding position that the country of origin of the movement confers the country of origin of a traditional watch. On January 15, 2020, the United States and China signed a “Phase One” trade agreement pursuant to which this 15% U.S. special tariff was reduced to 7.5%, effective February 14, 2020.

Results of operations for the three months ended April 30, ~~2019~~2020 as compared to the three months ended April 30, ~~2018~~2019

During the first quarter of fiscal 2021, the Company’s and many of the wholesale customers have been impacted by closures, reduced store hours or reduced traffic. The Company has seen and expects to continue to see material reductions in sales as a result of the COVID-19 pandemic and the uncertain business environment. In addition, these reductions in sales have not been entirely offset by proportional decreases in expenses, as the Company continues to incur costs such as operating lease costs, depreciation expense, and certain other costs such as compensation and administrative expenses, resulting in a negative effect on the relationship between the Company’s expenses and sales. The Company continues to take steps to manage the Company’s resources by reducing or deferring capital expenditures, reducing advertising expenditures, reducing compensation costs, in part through employee furloughs, salary reductions and European government subsidies of a portion of employees’ wages, as well as reducing overall operating expenses to mitigate the adverse impact of the pandemic. The current circumstances are dynamic and the impacts of the COVID-19 pandemic on the Company’s business operations, including the duration and impact on overall consumer demand, cannot be reasonably predicted at this time. The Company anticipates the COVID-19 pandemic will have a material adverse impact on its business, results of operations, financial condition and cash flows for the year ending January 31, 2021. As the COVID-19 pandemic is complex and rapidly evolving, the Company’s plans may change.

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

Net sales for the three months ended April 30, ~~2019~~2020 were ~~$146.5~~$69.7 million, ~~$19.4~~$76.9 million or ~~15.3% above~~52.5% below the prior year period. This decrease is primarily due to the COVID-19 pandemic. For the three months ended April 30, 2019, fluctuations in foreign currency exchange rates negatively impacted net sales by ~~$4.7~~$0.7 million when compared to the prior ~~year.~~year period.

Net sales for the three months ended April 30, ~~2019~~2020 in the Watch and Accessory Brands segment were ~~$131.5~~$63.3 million, ~~above~~below the prior year period by ~~$19.4~~$68.2 million, or ~~17.3%~~51.9%. The ~~increase~~decrease in net sales was primarily attributable to ~~increases~~the COVID-19 pandemic and the resultant closure of the stores of the Company’s wholesale customers during the period. There were decreases in net sales in both the ~~International~~United States and ~~United States~~International locations of the Watch and Accessory Brands segment.

Net sales for the three months ended April 30, ~~2019~~2020 in the United States ~~location~~locations of the Watch and Accessory Brands segment were ~~$44.7~~$22.3 million, ~~above~~below the prior year period by ~~$10.9~~$22.4 million, or ~~32.2%~~50.1%, resulting from net sales ~~increase~~decreases across all brands in both the owned and licensed brand ~~categories.~~categories due to the COVID-19 pandemic. The net sales recorded in the owned brands category ~~increased~~decreased by ~~$6.9~~$15.2 million, or ~~27.9%~~48.5%, ~~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 recorded in the licensed ~~brands~~brand category ~~increased $2.7~~decreased $4.2 million, or ~~41.0%~~45.8%.

Net sales for the three months ended April 30, ~~2019~~2020 in the International ~~location~~locations of the Watch and Accessory Brands segment were ~~$86.8~~$41.0 million, ~~above~~below the prior year by ~~$8.5~~$45.8 million, or ~~10.9%~~52.8%, which included fluctuations in foreign currency exchange rates which unfavorably impacted net sales by ~~$4.7~~$0.7 million when compared to the prior ~~year. This increase was driven by~~year period. The decrease in net sales ~~increases~~were across all brands in both the owned and licensed ~~brands and owned brands categories.~~brand categories due to the COVID-19 pandemic. The net sales ~~increase in the licensed brands category was $4.3 million, or 7.2%, primarily due to net sales increases in Europe, Asia and Latin America. The net sales increase~~decrease recorded in the owned brands category was ~~$3.5~~$11.3 million, or ~~20.4%~~55.3% and is due to sales ~~increases~~decreases primarily in Europe, the Americas (excluding the United States), Asia, and the Middle East. The net sales ~~increase~~decrease in the ~~owned~~licensed brands category ~~also included~~was $32.9 million, or 51.7%, primarily due to net sales ~~attributable to~~decreases in Europe, the ~~addition of~~Americas (excluding the ~~MVMT brand.~~United States), Asia and the Middle East.

Net sales for the three months ended April 30, ~~2019~~2020 in the Company Stores segment ~~was relatively flat in comparison to~~were $6.4 million, $8.7 million or 57.6% below the prior year ~~period at $15.0 million. Although the conversion rate remained strong as products continue to resonate well with customers,~~period. The net sales decrease in comparable stores ~~decreased~~is primarily ~~as a~~the result of the closure of ~~two~~the Company’s retail stores ~~for renovation during~~in mid-March in response to the ~~current quarter.~~COVID-19 pandemic. This decrease was offset by the addition of new ~~store openings.~~stores that did not exist in the prior-year period but contributed to sales in the current period prior to the COVID-19 related closures in mid-March. As of April 30, ~~2019,~~2020, and ~~2018,~~2019, the Company operated 4447 and 4044 retail outlet locations, respectively.

Gross profit for the three months ended April 30, ~~2019~~2020 was $31.9 million or 45.8% of net sales as compared to $78.9 million or 53.8% of net sales ~~as compared to $67.5 million or 53.1% of net sales~~ in the prior ~~year.~~year period. The ~~increase~~decrease in gross profit of ~~$11.4~~$47.0 million was primarily due to ~~higher~~lower net sales and a ~~higher~~lower gross margin percentage. The ~~increase~~decrease in the gross margin percentage of approximately 70800 basis points for the three months ended April 30, ~~2019~~2020 resulted primarily from corporate initiatives related to an increase in inventory reserves in response to the ~~favorable impact of sales mix~~COVID-19 pandemic of approximately ~~120~~500 basis points, ~~and~~ the ~~increased leveraging~~decreased deleveraging of certain fixed costs as a result of ~~higher~~lower sales of approximately 40150 basis points, ~~partially offset by the~~additional U.S. special tariffs of approximately 70 basis points, an unfavorable impact of sales mix of approximately 60 basis points and a negative impact of fluctuations in foreign currency exchange rates of approximately ~~110~~30 basis points.

SG&A expenses for the three months ended April 30, ~~2019~~2020 were ~~$73.9~~$58.1 million, representing ~~an increase~~a decrease from the prior year period of ~~$14.5~~$15.8 million, or ~~24.4%. The increase in SG&A expenses was attributable to higher~~21.3%, primarily from lower marketing expenses of ~~$7.1 million due primarily to the addition of MVMT; an increase~~$9.8 million; a decrease in payroll related expenses of ~~$3.4~~$5.0 million primarily as a result of the ~~acquisition~~furloughing of ~~MVMT~~employees, salary reductions and European government subsidies starting at the ~~opening~~beginning of ~~new company stores; higher rent and related expenses~~April in response to the COVID-19 pandemic; a decrease 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~~$2.7 million in ~~expenses~~trade show costs due to the cancellation of a global customer event due to COVID-19 health concerns and travel restrictions; a $0.8 million decrease in consulting and recruiting charges and a decrease of $0.6 million in travel and entertainment charges due to travel restrictions related to the ~~amortization of intangible assets and deferred compensation of MVMT; $1.1 million of expenses related to its new joint venture~~COVID-19 pandemic. The decrease 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~~SG&A was partially offset by ~~the favorable effect of foreign currency translation on SG&A expenses related~~an increase in corporate initiative charges primarily in response to the ~~foreign subsidiaries~~COVID-19 pandemic of $3.7 million consisting of $1.5 million in write-off of unrefunded trade show deposits, $1.1 ~~million.~~

~~Watch~~million in additional accounts receivable reserves and ~~Accessory Brands Operating Income~~

$1.1 million in restructuring charges. For the three months ended April 30, ~~2019~~2020, fluctuations in foreign currency rates related to the foreign subsidiaries positively impacted SG&A expenses by $0.2 million when compared to the prior year period.

As a result of the economic conditions caused by the response to COVID-19, the Company performed a quantitative assessment of its goodwill and long-lived intangible assets at April 30, 2020. The Company recorded a goodwillimpairment of $133.7 million related to the Company’s Watch and Accessory reporting unit as the carrying value of goodwill exceeded the fair value at April 30, 2020. The Company also recorded a $22.2 millionimpairment charge related to MVMT’s trade name and customer relationships as the carrying amount of these long-lived intangible assets exceeded the fair value.

For the three months ended April 30, 2020 the Company recorded an operating loss of $179.6 million in the Watch and Accessory Brands segment which included goodwill and intangible assets impairment charges of $133.7 million and $22.2 million, respectively. Without these charges, for the three months ended April 30, 2020, operating loss would have been $23.7 million as compared to operating income of $3.1 million ~~and $6.4 million,~~for the three months ended April 30, 2019, which includes ~~$9.0~~$6.0 million and ~~$10.1~~$9.0 million of unallocated corporate expenses as well as ~~$13.0~~$11.1 million and ~~$11.0~~$13.0 million, respectively, of certain intercompany profits related to the Company’s supply chain operations. ~~The $3.3 million~~In addition to the assets impairments, the decrease in operating income was the result of ~~higher~~a decrease in gross profit of $41.6 million, which included corporate initiative costs of $3.5 million comprising an increase in inventory reserves, partially offset by a decrease in SG&A expenses of ~~$14.0 million, partially offset by an increase in gross profit of $10.7~~$14.8 million when compared to the prior ~~year.~~year period. The ~~increase~~decrease in gross profit was the result of ~~higher~~lower gross margin percentage and ~~higher~~lower sales. The ~~increase~~decrease in SG&A expenses ~~was~~of $14.8 million resulted primarily ~~attributable to higher~~from lower marketing expenses of ~~$7.1~~$9.8 million; a decrease in payroll related expenses of $4.1 million primarily as a result of the furloughing of employees, salary reductions and European government subsidies starting at the beginning of April in response to the COVID-19 pandemic; a decrease of $2.7 million in trade show costs due to the cancellation of a global customer trade show due to COVID-19 health concerns and travel restrictions; a $0.8 million decrease in consulting and recruiting charges and a decrease of $0.6 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic. The decrease in SG&A was partially offset by an increase in ~~payroll related~~corporate initiative charges primarily in response to the COVID-19 pandemic of ~~$3.3 million; higher rent related expenses~~$3.7 million consisting of ~~$1.2 million; an increase of $1.3~~$1.5 million in ~~expenses related to the amortization~~write-off of ~~intangible assets and deferred compensation of MVMT;~~unrefunded trade show deposits, $1.1 million in additional accounts receivable reserves and $1.1 million ~~of expenses related to the Company’s 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.~~restructuring charges. For the three months ended April 30, ~~2019~~2020, fluctuations in foreign currency exchange rates ~~negatively~~positively impacted the Watch and Accessory Brands segment operating ~~income~~loss by ~~$1.4~~$0.1 million when compared to the prior ~~year.~~year period.

InFor the three months ended April 30, 2020 the Company recorded an operating loss of $117.6 million in the United States ~~location~~locations of the Watch and Accessory Brands segment which included goodwill and impairment charges of $77.5 million and $22.2 million, respectively. Without these charges, for the three months ended April 30, 2020, operating loss would have been $17.9 million as compared to operating loss of $10.8 million for the three months ended April 30, 2019, which includes unallocated corporate expenses of $6.0 million and ~~2018,~~$9.0 million, respectively. In addition to the assets impairments, the increase in operating loss was the result of lower gross profit of $17.7 million, which included corporate initiative costs of $3.5 million comprising an increase in inventory reserves, partially offset by lower SG&A expenses of $10.6 million. The decrease in gross profit of $17.7 million was due to lower sales and a lower gross margin percentage. The decrease in SG&A expenses of $10.6 million resulted primarily from lower marketing costs of $7.1 million; a decrease in payroll related expenses of $3.1 million primarily as a result of the furloughing of employees and salary reductions starting at the beginning of April in response to the COVID-19 pandemic; a decrease of $0.4 million in consulting and recruiting charges and a decrease of $0.3 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic. The decrease in SG&A was partially offset by an increase in corporate initiative charges primarily in response to the COVID-19 pandemic of $1.2 million consisting of $1.1 million in additional accounts receivable reserves and $0.1 million in restructuring charges.

For the three months ended April 30, 2020 the Company recorded an operating loss of $10.8 million and $7.7 million, respectively, which includes unallocated corporate expenses of $9.0 million and $10.1 million. The increase in operating loss of $3.1 million was the result of higher SG&A expenses of $9.9 million, partially offset by higher gross profit of $6.8 million. The increase in gross profit of $6.8 million was due to higher sales of $10.9 million and a higher gross margin percentage. The increase in SG&A expenses of $9.9 million was primarily attributable to higher marketing costs of $5.5 million, an increase of $1.3$62.0 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.~~

In the International ~~location~~locations of the Watch and Accessory Brands segment which included goodwill impairment charges of $56.2 million. Without these charges, for the three months ended April 30, 2020, operating loss would have been $5.8 million as compared to operating income of $13.9 million for the three months ended April 30, 2019, ~~and 2018, the Company recorded operating income of $13.9~~which amounts include $11.1 million and ~~$14.1~~$13.0 million, respectively, ~~which includes $13.0 million and $11.0 million~~ of certain intercompany profits related to the Company’s International supply chain operations. ~~The~~In addition to the goodwill impairment charges, the decrease in operating income was primarily related to lower gross profit of ~~$0.2~~$23.9 million, partially offset by lower SG&A expenses of $4.2 million. The decrease in gross profit of $23.9 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~~lower net sales ~~partially offset by~~and a lower gross margin percentage. The ~~increase~~decrease in SG&A expenses of ~~$4.1~~$4.2 million ~~was attributable to higher~~resulted primarily from lower marketing ~~expenses~~costs of ~~$1.5~~$2.7 million; ~~higher~~a decrease in payroll related expense of ~~$1.9 million; an increase~~$1.0 million primarily as a result of ~~$1.1~~the furloughing of employees, salary reductions and European government subsidies starting at the beginning of April in response to the COVID-19 pandemic; a decrease of $2.7 million in ~~rent related expenses;~~trade show costs due to cancellation of a global customer event due to COVID-19 health concerns and ~~$1.1~~travel restrictions; a decrease in $0.4 million in consulting and recruiting charges; and a decrease of ~~expenses~~$0.3 million in travel and entertainment charges due to travel restrictions related to the ~~Company’s new joint venture~~COVID-19 pandemic. The decrease in ~~Spain.~~SG&A was partially offset by an increase in corporate initiative charges primarily in response to the COVID-19 pandemic of $2.5 million consisting of $1.5 million in write-off of unrefunded trade show deposits and $1.0 million in restructuring charges. Fluctuation in foreign currency exchange rates ~~negatively~~positively impacted operating ~~income~~loss by ~~$1.4~~$0.1 million when compared to the prior ~~year.~~year period.

The Company recorded operating ~~income~~loss of ~~$1.9~~$2.5 million and ~~$1.8~~operating income $1.9 million in the Company Stores segment for the three months ended April 30, ~~2019~~2020 and ~~2018,~~2019, respectively. The ~~increase~~decrease in operating income of ~~$0.1~~$4.4 million was ~~the result of higher~~primarily related to lower gross profit of ~~$0.6~~$5.4 million partially offset by ~~higher~~lower SG&A expenses of ~~$0.5~~$1.0 million. The ~~higher gross profit was the result of higher gross margin percentage. The increase~~decrease in SG&A expenses of ~~$0.5~~$1.0 million was primarily due to ~~rent and~~a decrease in payroll related ~~costs associated with~~expenses of $0.9 million due to the ~~opening~~closing of ~~new~~the Company’s stores and the furloughing of employees due to the COVID-19 pandemic. As of April 30, 2020, and 2019, the Company operated 47 and 44 retail outlet ~~locations.~~locations, respectively.

The Company recorded an income tax benefit of $32.3 million and an income tax expense of $0.8 ~~million and income tax benefit $0.1~~ million for the three months ended April 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

The effective tax rate was 17.7% for both three months ended April 30, 2020 and ~~-1.8%~~2019, respectively. The significant components of the effective tax rate changed primarily due to the recording of valuation allowances on certain foreign deferred tax assets and impairments of the portion of goodwill of the Watch and Accessory reporting unit which is not tax deductible, both of which occurred during the first quarter of fiscal 2021. These changes were partially offset by changes in foreign profits in lower tax jurisdictions and the impact of the CARES Act, which enables the Company to carry back U.S. net operating losses generated in fiscal 2021 into prior taxable years with a U.S. statutory tax rate of 35.0%.

The effective tax rate for the three months ended April 30, ~~2019 and 2018, respectively. The change in~~2020 differs from the ~~effective~~U.S. statutory tax rate ~~was~~of 21.0% primarily due to impairments of the ~~release~~portion of ~~valuation allowances against certain foreign deferred~~goodwill of the Watch and Accessory reporting unit which is not tax ~~assets~~deductible, partially offset by the impact of the CARES Act, which enables the Company to carry back U.S. net operating losses generated in fiscal 2021 into prior ~~year.~~taxable years with a U.S. statutory tax rate of 35.0%.

The effective tax rate for the three months ended April 30, 2019 differs from the U.S. statutory tax rate of 21.0% primarily due to foreign profits ~~being taxed~~ in lower ~~taxing~~tax 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 three months ended 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 a decrease in the deferred withholding tax liability on unremitted earnings resulting from currency exchange rates.

The Company recorded net loss attributable to Movado Group, Inc. of $150.0 million and net income attributable to Movado Group, Inc. of $3.9 million, ~~and $8.1 million,~~ for the three months ended April 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

At April 30, 2019 and April 30, 2018, the Company had $150.7 million and $177.0 million, respectively, of cash and cash equivalents. Of this total, $134.4 million and $148.9 million, respectively, consisted of cash and cash equivalents at the Company’s foreign subsidiaries.

The Company ~~recorded a deferred tax liability for foreign withholding~~believes that cash flows from operations and ~~U.S. income taxes of $2.9 million related~~its credit lines and on-hand cash provide adequate funds to $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 recordedsupport its operating, capital and debt service requirements for the ~~remaining undistributed foreign earnings~~next twelve months subsequent to the issuance of ~~approximately $158.0 million, because~~these financial statements. During the fiscal year ended January 31, 2020 the Company’s liquidity needs were funded through cash from operations. However, during the first quarter of fiscal 2021, the Company’s cash generated from operations was negatively impacted due to widespread closures of the Company’s retail locations and the Company’s wholesale customers’ stores as a result of the COVID-19 pandemic and the Company ~~intends~~borrowed $30.9 million under its revolving credit facility as a precautionary measure in order to ~~permanently reinvest such earnings~~increase the Company’s cash position and preserve liquidity given the upcoming uncertainty in global markets from the COVID-19 pandemic. Given the disruption to the Company’s business caused by the COVID-19 pandemic, in June 2020, the Company amended its ~~foreign operations. It~~credit agreement to provide for temporary relief under some of the Company’s financial covenants for a specified period. Although the Company believes it has adequate sources of liquidity over the long term, continued uncertainty surrounding the COVID-19 pandemic, an economic recession or a slow recovery could adversely affect the Company’s business and liquidity.

In response to the uncertainty, the Company has taken other actions to reinforce its liquidity and financial flexibility. Specific actions that the Company is undertaking include, but are not ~~practicable~~limited to, ~~estimate~~actively reducing SG&A expense by minimizing non-essential operating costs, right-sizing marketing expenses to the ~~tax liability related to~~lower revenue base while maintaining a ~~future distribution of these permanently reinvested foreign earnings.~~focus on digital, driving procurement savings, including by reducing third party services, tightly managing inventories by delaying or cancelling inventory receipts as deliveries are prioritized, reducing capital expenditures while prioritizing investment in high-return projects particularly in digital and suspending quarterly dividend and share repurchases for the foreseeable future.

At April 30, ~~2019,~~2020 the Company had working capital of ~~$335.1~~$348.9 million as compared to ~~$374.2~~$335.1 million at April 30, ~~2018.~~2019. The ~~decrease~~increase in working capital was primarily the result of ~~the addition~~additional cash and cash equivalents of ~~current operating lease liabilities of $13.8~~$37.1 million primarily due to an increase in ~~accordance with the Company’s adoption of ASU 2016-02, “Leases”; the acquisition of MVMT in October 2018;~~borrowings and a decrease in ~~other current assets primarily as a result of recovery of VAT of $4.6 million.~~accounts payable. These factors were ~~partially~~ offset by ~~an increase~~a decrease in ~~inventories.~~accounts receivable resulting primarily from lower sales due to the COVID-19 pandemic. The Company defines working capital as the difference between current assets and current liabilities.

The Company had $25.6 million of cash used in operating activities for the three months ended April 30, ~~2019~~2020 as compared to ~~$2.6~~$25.6 million of cash used in operating activities for the three months ended April 30, ~~2018. For~~2019. Cash used by operating activities for the ~~three months~~quarter ended April 30, ~~2019 operating cash flow was the result of~~2020 included net ~~income~~loss attributable to the Movado Group, Inc. of ~~$3.9~~$150.0 million, positively adjusted ~~for the effects of~~by $127.5 million related to non-cash items totaling $5.9 million, including $3.9 million of 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 $0.1 million benefit for deferred taxes.items. Cash used in operating activities included a decrease in accounts payable and accrued liabilities totaling $21.8 million primarily as a result of a reduction in expenditures during the quarter and timing of payments to vendors and an increase in investment in inventories of ~~$14.8~~$10.3 million primarily due to ~~support~~lower sales ~~growth,~~resulting from the COVID-19 pandemic. Cash provided by operating activities for the quarter ended April 30, 2020 included a $25.4 million decrease in trade receivables primarily due to lower sales resulting from the COVID-19 pandemic and an increase in ~~current assets~~income taxes payable of ~~$4.1~~$4.8 million due to timing of payments of annual fees, decrease in accrued payroll and 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 payments made during the quarter.tax payments.

Cash used in investing was $1.0 million for the three months ended April 30, 2020 as compared to $2.3 million for the three months ended April 30, ~~2019 as compared to $1.9 million for the three months ended April 30, 2018.~~2019. The cash used in the three months ended April 30, ~~2019~~2020 was ~~primarily $2.2 million in capital expenditures~~ primarily related to the ~~opening and renovation of the Company stores and to the~~ construction of ~~shop-in-shop~~shop-in-shops at some of the Company’s wholesale customers.

Cash ~~used in~~provided by financing activities was $30.5 million for the three months ended April 30, 2020 as compared to cash used by financing activities of $8.4 million for the three months ended April 30, ~~2019 as compared to $27.7 million of cash used in financing activities for the three months ended April 30, 2018.~~2019. The cash ~~used~~provided in the three months ended April 30, ~~2019~~2020 included ~~$4.6~~proceeds from bank borrowings of $30.9 million ~~dividends paid, $2.6~~as a precautionary measure in order to increase the Company’s cash position, preserve financial flexibility and maintain liquidity in response to the COVID-19 pandemic, offset by $0.4 million in stock ~~repurchased in the open market, and $1.2 million stock option options and~~ awards exercised, net of ~~$1.4~~$0.4 million of shares repurchased as a result of the surrender of shares in connection with the vesting of certain stock awards. In response to the COVID-19 pandemic, the Company has suspended its quarterly dividend and share repurchases effective the first quarter of fiscal 2021. The Company paid $4.6 million in dividends and $2.6 million in share repurchases during the first quarter of fiscal 2020.

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 April 30, ~~2019,~~2020, and April 30, ~~2018,~~2019, there ~~were~~was 70.0 million and 50.0 million in Swiss ~~francs~~Francs, respectively (with a dollar equivalent of $72.5 million and $49.1 ~~million) and zero, respectively,~~million, respectively), in addition to $10.0 million as of April 30, 2020, in loans outstanding under the Facility. Availability under the Facility was reduced by the aggregate number of letters of credit outstanding, issued in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada, totaling approximately $0.3 million at both April 30, ~~2019~~2020 and April 30, ~~2018.~~2019. At April 30, ~~2019,~~2020, the letters of credit have expiration dates through ~~April 26,~~June 1, 2020. As of April 30, ~~2019,~~2020, and April 30, ~~2018,~~2019, availability under the Facility was $17.2 million and $50.6 million, respectively. For additional information regarding the Facility, see Note 8 – Debt and ~~$99.7 million, respectively.~~Lines of Credit to the Consolidated Financial Statements.

The Company had weighted average ~~borrowing~~borrowings under the facility of $65.6 million and $49.8 million during the three months ended April 30, 2020 and ~~$7.8 million,~~2019, respectively, with a weighted average interest rate of ~~1.00%~~1.17% and ~~0.96%~~1.00% during the ~~first quarter of fiscal~~three months ended April 30, 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 April 30, ~~2019,~~2020, and ~~2018,~~2019, these lines of credit totaled 6.5 million Swiss ~~francs~~Francs for both periods, with a dollar equivalent of ~~$6.4~~$6.7 million and ~~$6.6~~$6.4 million, respectively. As of April 30, ~~2019,~~2020, and ~~2018,~~2019, there were no borrowings against these lines. As of April 30, ~~2019,~~2020, and ~~2018,~~2019, 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~~$1.2 million, and ~~$1.2~~$1.1 million, respectively, in various foreign currencies, of which ~~$0.5~~$0.6 million and ~~$0.6~~$0.5 million, respectively, was a restricted deposit as it relates to lease agreements.

Cash paid for interest, including unused commitments fees, was $0.2 million for ~~both~~the three months ended April 30, ~~2019~~2020 and April 30, ~~2018.~~2019.

The Company did not pay cash dividends during the three months ended April 30, 2020. The Company paid cash dividends of $0.20 per share or $4.6 million during the three months ended 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. The Company is committed to resuming dividend payments when the environment and its business stabilize and dividends are permitted by the terms of its revolving credit facility (see Note 8 – Debt and Lines of Credit).

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. 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. See Note 8 – Debt and Lines of Credit – for restrictions on share repurchase under the Company’s revolving credit facility. During the three months ended April 30, ~~2019,~~2020, the Company ~~repurchased a total of 78,402~~did not repurchase any shares of its common ~~stock at a total cost of $2.6~~stock. At April 30, 2020, $36.4 million ~~or an average of $33.36 per share.~~remains available for purchase under the Company’s repurchase program.

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

See Note 23- Recent Accounting Pronouncements to the accompanying unaudited ~~consolidated financial statements~~Consolidated Financial Statements for a description of certain accounting changes and recent accounting pronouncements which may impact the Company’s ~~consolidated financial statements~~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 (see Note 7 9 – Derivative Financial Instruments to the Consolidated Financial Statements). A significant portion of the Company’s purchases are denominated in Swiss ~~francs~~Francs and, to a lesser extent, the Japanese Yen. The Company also sells to third-party customers in a variety of foreign currencies, most notably the Euro, Swiss Franc and the British Pound. The Company reduces its exposure to the Swiss ~~franc,~~Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rate risk through a hedging program. Under the hedging program, the Company manages most of its foreign currency exposures on a consolidated basis, which allows it to net certain exposures and take advantage of natural offsets. In the event these exposures do not offset, from time to time the Company uses various derivative financial instruments to further reduce the net exposures to currency fluctuations, predominately forward and option contracts. Certain of these contracts meet the requirements of qualified hedges. In these circumstances, the Company designates and documents these derivative instruments as a cash flow hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transactions. Changes in the fair value of hedges designated and documented as a cash flow hedge and which are highly effective, are recorded in other comprehensive income until the underlying transaction affects earnings, and then are later reclassified into earnings in the same account as the hedged transaction. The earnings impact is mostly offset by the effects of currency movements on the underlying hedged transactions. To the extent that the Company does not engage in a hedging program, any change in the Swiss ~~franc,~~Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rates to local currency would have an equal effect on the Company’s earnings.

From time to time the Company uses forward exchange contracts, which do not meet the requirements of qualified hedges, to offset its exposure to certain foreign currency receivables and liabilities. These forward contracts are not designated as qualified hedges and, therefore, changes in the fair value of these derivatives are recognized in earnings in the period they arise, thereby offsetting the current earnings effect resulting from the revaluation of the related foreign currency receivables and liabilities.

As of April 30, ~~2019,~~2020, the Company’s entire net forward contracts hedging portfolio consisted of 38.4 million Chinese Yuan equivalent, 12.0 million Swiss Francs equivalent, 9.8 million US dollars equivalent, 17.9 million Euros equivalent and 2.5 million British Pounds equivalent with various expiry dates ranging through September 10, 2020, compared to a portfolio of 40.4 million Chinese Yuan equivalent, 31.0 million Swiss ~~francs~~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, ~~compared to a portfolio of 16.0 million Swiss francs equivalent, 9.0 million Euros equivalent and 2.8 million British Pounds equivalent, with various expiry dates ranging through October 9, 2018~~ as of April ~~30,2018.~~30, 2019. If the Company were to settle its Swiss ~~franc~~Franc forward contracts at April 30, ~~2019,~~2020, the net result would be ~~a loss of $0.4 million, net of tax benefit of $0.1 million.~~an immaterial loss. As of April 30, ~~2019,~~2020, the Company’s British Pound, Chinese Yuan, US Dollar and Euro forward contracts had no gain or loss. The Company had no ~~Swiss franc, Euro or British Pound option contracts related to~~ cash flow hedges as of April 30, ~~2019~~2020 and April 30, ~~2018,~~2019, 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. 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. The Company did not hold any future contracts in its gold hedge portfolio as of April 30, ~~2019~~2020 and ~~2018,~~2019, 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, 2020 and 2019 totaled $82.5 million (70 million in Swiss francs and ~~2018 totaled~~$10 million) and $49.1 million (50 million in Swiss francs) ~~and zero,~~, respectively. The debt outstanding at April 30, ~~2019~~2020 is based on LIBOR plus a spread ranging from 1.00% to 1.75% per annum or on a base rate plus a spread ranging from 0% to 0.75% per ~~annum.~~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,~~2020, the Company had weighted average borrowings of $65.6 million with a weighted average interest rate of 1.17%. As of April 30, 2020, the Company’s spreads were ~~1.00%~~1.25% over LIBOR and 0%0.25% over the base rate. The Company does not hedge these interest rate risks. Based on the average floating rate debt outstanding during the three months ended April 30, 2020, a one-percent increase or decrease in the average interest rate during the period would have resulted in a change to interest expense of ~~$0.1~~$0.2 million for the three months ended April 30, ~~2019.~~2020.

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.

The 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 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 excluded MVMT Watches, Inc. from that evaluation in accordance with the rules relating to recently-acquired entities.

There have been no ~~other~~ changes in the Company’s internal control over financial reporting during the three months ended April 30, ~~2019~~2020, that have materially affected, or ~~are~~is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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. The Company continues to provide U.S. Customs with supplemental analyses and information supporting the Company’s historical allocation 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,~~matter, 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 beyond the amounts accrued, or cash flows.

As of April 30, ~~2019,~~2020, there have been no material changes to any of the risk factors previously reported in the Company’s ~~2019~~2020 Annual Report on Form ~~10-K, except as described below.~~10-K.

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 through August 29, 2020, 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. During the three months ended April 30, ~~2019,~~2020, the Company ~~repurchased a total of 78,402~~did not repurchase any shares of its common ~~stock at a total cost of $2.6 million, or an average of $33.36 per share.~~stock.

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 operations may be materially harmed.

Starting in July 2018, the 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, including certain of the 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 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 the production of 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 the exercise price of an option may be tendered to the Company in payment of the option exercise price and netted from the shares of common stock issued upon the option exercise. An aggregate of ~~42,127~~36,923 shares were repurchased during the three months ended April 30, ~~2019~~2020 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 April 30, ~~2019~~2020 of equity securities that are registered by the Company pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

On June 5, 2020, the Company entered into an amendment (the “Second Amendment”) to the Company’s Amended and Restated Credit Agreement (the “Credit Agreement”) dated October 12, 2018 with the lenders party thereto and Bank of America, N.A., as administrative agent, governing the terms of the Company’s $100.0 million senior secured revolving credit facility. Among other things, the Second Amendment provides for the following temporary relief with respect to the financial maintenance covenants in the Credit Agreement from the Second Amendment’s effective date of April 30, 2020 through the date on which the Company delivers a compliance certificate in respect of the period ended July 31, 2021 (or earlier if the Company demonstrates satisfaction of certain earnings and leverage milestones) (the “Suspension Period”): (i) the maximum consolidated leverage ratio is increased from 2.50 to 1.0 to 2.75 to 1.0 for the four quarter period ended April 30, 2020 and suspended thereafter until the end of the Suspension Period when it resumes at 2.50 to 1.0 and (ii) the minimum EBITDA covenant levels are reduced. In addition, the Second Amendment provides that (i) through April 30, 2021, the Company is required to maintain minimum liquidity (comprised of unrestricted cash and cash equivalents and unutilized commitments under the Credit Agreement) of $100.0 million, (ii) during the Suspension Period, certain covenants, including covenants related to dividends, debt incurrence, investments and capital expenditures, have been tightened and (iii) during the Suspension Period, the interest rate for borrowings under the Credit Agreement is increased to LIBOR plus 2.75% per annum and the commitment fee in respect of the unutilized commitments is increased to 0.45% per annum. In addition, the Second Amendment permanently increased the LIBOR floor for loans under the Credit Agreement from 0% to 1.00% and permanently reduced the minimum EBITDA financial covenant level to $35.0 million starting with the four-quarter period ending July 31, 2021. The foregoing summary of the Second Amendment is qualified by reference to the full text of the amendment, which is attached as Exhibit 4.1 hereto and incorporated herein by reference.

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)

Large accelerated filer	☒☐	Accelerated filer	☐☒	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

			Page
Part I	Financial Information (Unaudited)
	Item 1.	Consolidated Balance Sheets at April 30, 2020, January 31, 2020 and April 30, 2019	3
		Consolidated Statements of Operations for the three months ended April 30, 2020 and April 30, 2019	4
		Consolidated Statements of Comprehensive (Loss) Income for the three months ended April 30, 2020 and April 30, 2019	5
		Consolidated Statements of Cash Flows for the three months ended April 30, 2020 and April 30, 2019	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4.	Controls and Procedures	32
Part II	Other Information
	Item 1.	~~Consolidated Balance Sheets at April 30, 2019, January 31, 2019 and April 30, 2018~~Legal Proceedings	333
		~~Consolidated Statements of Operations for the three months ended April 30, 2019 and April 30, 2018~~	4
	Item 1A.	~~Consolidated Statements of Comprehensive Income for the three months ended April 30, 2019 and April 30, 2018~~Risk Factors	5
		~~Consolidated Statements of Cash Flows for the three months ended April 30, 2019 and April 30, 2018~~	6
		~~Notes to Consolidated Financial Statements~~	733
	Item 2.	~~Management’s Discussion~~Unregistered Sales of Equity Securities and ~~Analysis~~Use of ~~Financial Condition and Results of Operations~~Proceeds	2333
	Item 3.5.	~~Quantitative and Qualitative Disclosures About Market Risk~~Other Information	29
	~~Item 4.~~	~~Controls and Procedures~~	29
~~Part II~~	~~Other Information~~
	~~Item 1.~~	~~Legal Proceedings~~	31
	~~Item 1A.~~	~~Risk Factors~~	31
	~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	3134
	Item 6.	Exhibits	3335
Signature			3436

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	)


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


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

	Trade names			Customer relationships			Other (1)			Total			Trade names			Customer relationships			Other (1)			Total
Weighted Average Amortization Period (in years)	10			7			7						10			7			9
Balance at January 31, 2019	$	34,771		$	12,181		$	1,231		$	48,183
Balance at January 31, 2020													$	31,075		$	10,154		$	1,130		$	42,359
Impairment														(18,595	)		(3,570	)		-			(22,165	)
Additions		—			—			63			63			—			—			41			41
Amortization		(938	)		(506	)		(94	)		(1,538	)		(720	)		(456	)		(90	)		(1,266	)
Foreign exchange impact		(40	)		(78	)		(20	)		(138	)		(449	)		(240	)		(8	)		(697	)
Balance at April 30, 2019	$	33,793		$	11,597		$	1,180		$	46,570
Balance at April 30, 2020													$	11,311		$	5,888		$	1,073		$	18,272

	April 30, 2019		January 31, 2019		April 30, 2018		April 30, 2020		January 31, 2020		April 30, 2019
Finished goods	$	132,797	$	123,947	$	118,057	$	129,918	$	125,603	$	132,797
Component parts		43,304		39,752		39,651		43,411		41,708		43,304
Work-in-process		1,947		1,612		1,324		4,503		4,095		1,947
	$	178,048	$	165,311	$	159,032	$	177,832	$	171,406	$	178,048

	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

	Three Months Ended		Three Months Ended		For the Three Months Ended April 30,
Customer Type	April 30, 2019		April 30, 2018		2020		2019
Wholesale	$	115,161	$	105,974	$	52,910	$	115,161
Direct to consumer		30,356		19,782		16,304		30,356
After-sales service		1,032		1,393		452		1,032
Net Sales	$	146,549	$	127,149	$	69,666	$	146,549

	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)		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 outstanding at January 31, 2020										490,239		$	33.50	1.4	$	8,442
Units granted		261,067		$	32.91					86,500		$	10.00
Units vested		(160,483	)	$	29.35					(141,235	)	$	26.88
Units forfeited		(2,263	)	$	31.18					(3,409	)	$	25.75
Units outstanding at April 30, 2019		545,343		$	33.53	2.2	$	17,447
Units outstanding at April 30, 2020										432,095		$	31.02	1.3	$	4,455

	Operating Income ^{(3) (4)}				Operating (Loss)/Income (3)(4)(5)
	2019		2018		2020			2019
Watch and Accessory Brands	$	3,095	$	6,366	$	(179,621	)	$	3,095
Company Stores		1,879		1,773		(2,542	)		1,879
Consolidated total	$	4,974	$	8,139	$	(182,163	)	$	4,974

	Total Assets (1)						Total Assets (1)
	April 30, 2019		January 31, 2019		April 30, 2018		April 30, 2020		January 31, 2020		April 30, 2019
Watch and Accessory Brands	$	766,571	$	735,244	$	587,052	$	634,135	$	782,339	$	766,571
Company Stores		62,090		24,457		25,080		63,778		64,969		62,090
Consolidated total	$	828,661	$	759,701	$	612,132	$	697,913	$	847,308	$	828,661

	Net Sales				Operating Income / (Loss) ^(3) (4⁾						Net Sales				Operating (Loss)/Income (3)(4)(5)
	2019		2018		2019			2018			2020		2019		2020			2019
United States (1)	$	59,494	$	48,843	$	(8,952	)	$	(5,982	)	$	28,534	$	59,494	$	(119,990	)	$	(8,952	)
International (2)		87,055		78,306		13,926			14,121			41,132		87,055		(62,173	)		13,926
Consolidated total	$	146,549	$	127,149	$	4,974		$	8,139		$	69,666	$	146,549	$	(182,163	)	$	4,974

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

4.1		Second Amendment, dated June 5, 2020 and effective April 30, 2020, to the Amended and Restated Credit Agreement, dated as of October 12, 2018, among the Company, certain U.S. and Swiss subsidiaries thereof, the lenders party thereto and Bank of America, N.A. as administrative agent.

10.1*		License Agreement among Tommy Hilfiger Licensing LLC, Movado Group, Inc. and Swissam Products Limited, effective as of January 1, 2020, amending and restating the prior license agreement among such parties dated September 16, 2009.

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 April 30, ~~2019~~2020 filed with the SEC, formatted in Inline Extensible Business Reporting Language ~~(XBRL)~~(iXBRL): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements. XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document.

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

		* Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.

		MOVADO GROUP, INC.
		(Registrant)
Dated: ~~May 30, 2019~~June 9, 2020	By:	/s/ Sallie A. DeMarsilis
		Sallie A. DeMarsilis Senior Vice President, Chief Financial Officer and Principal Accounting Officer