Luxury watch company Movado (NYSE: MOV) reported Q2 CY2026 results topping the market’s revenue expectations, with sales up 4.9% year on year to $169.8 million. Its GAAP profit of $0.53 per share was 50.4% above analysts’ consensus estimates.

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Company Overview

With its watches displayed in 20 museums around the world, Movado (NYSE: MOV) is a watchmaking company with a portfolio of watch brands and accessories.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Movado struggled to consistently increase demand as its $689.9 million of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and is a sign of poor business quality.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Movado’s annualized revenue growth of 3% over the last two years is above its five-year trend, which is encouraging.

This quarter, Movado reported modest year-on-year revenue growth of 4.9% but beat Wall Street’s estimates by 3.4%.

Looking ahead, sell-side analysts expect revenue to grow 1.2% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Movado’s operating margin has risen over the last 12 months and averaged 5.5% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports inadequate profitability for a consumer discretionary business.

In Q2, Movado generated an operating margin profit margin of 8.8%, up 5.7 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Movado’s full-year EPS dropped 94.3%, or 24.8% annually, over the last three years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. Consumer Discretionary companies are particularly exposed to this, and if the tide turns unexpectedly, Movado’s low margin of safety could leave its stock price susceptible to large downswings.

In Q2, Movado reported EPS of $0.53, up from $0.13 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Movado’s full-year EPS to grow 13.4% from $1.80 to $2.04.

Key Takeaways from Movado’s Q2 Results

It was good to see Movado beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 5% to $36.70 immediately following the results.

Movado had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).