Movado Group, Inc. Announces Fourth Quarter and Fiscal 2010 Results
~ Fourth Quarter and Fiscal Year 2010 Results in Line with Revised Expectations ~

PARAMUS, N.J., April 1, 2010 /PRNewswire via COMTEX/ --Movado Group, Inc. (NYSE: MOV), today announced results for the fourth quarter and fiscal year ended January 31, 2010.

Efraim Grinberg, Chairman and Chief Executive Officer, stated, "Our results for the fourth quarter and fiscal 2010 were in line with our revised expectations.Although we recorded charges related to challenges within the U.S. jewelry market and the proactive steps we took to manage our business within this environment, we were able to significantly strengthen our financial position this year. For fiscal 2011, we are focused on addressing both the challenges and opportunities we see in the current marketplace. We are substantially increasing investments in our brands to elevate our connection with consumers and drive the top-line growth that will enable us to achieve our long-term profitability objectives. We are confident in our ability to leverage the Company's strong assets, including iconic brands, talented people and a solid balance sheet, and maximize our performance over time."

Fourth Quarter Fiscal 2010

Adjusted net loss in the fourth quarter of fiscal 2010 was $7.0 million, or $0.28 per diluted share, compared to an adjusted net loss of $8.8 million, or $0.36 per diluted share, in fiscal 2009 (see attached table for reconciliation of GAAP to non-GAAP measures). On a GAAP basis, fourth quarter 2010 net loss was $23.6 million, or $0.96 per diluted share, which includes the following items: (i) a pre-tax, non-cash reserve of $8.8 million, or $0.28 per diluted share, primarily related to excess non-core component inventory; (ii) a pre-tax, non-cash impairment charge of $7.6 million, or $0.29 per diluted share, primarily related to the write down of certain assets of the Company's Movado boutiques and, to a lesser extent, tradeshow booths for the Basel Fair; and (iii) a tax provision that includes a non-cash deferred tax expense of $11.1 million, or $0.45 per diluted share, related to a valuation allowance on net deferred tax assets, partially offset by a cash income tax benefit of $8.0 million, or $0.32 per diluted share, attributable to the recent U.S. tax law changes increasing the net operating loss carry back period to five years. This compares to a net loss of $22.8 million, or $0.93 per diluted share in the fourth quarter of fiscal 2009, which included one-time items totaling $14.0 million, or $0.57 per diluted share.

Net sales in the fourth quarter of fiscal 2010 decreased 1.9% to $92.2 million compared to $94.0 million in the fourth quarter of fiscal 2009. The decline was primarily the result of the challenging macroeconomic environment and the Company's proactive sales management in light of industry liquidation and credit risks.

Gross profit in the fourth quarter of fiscal 2010 was $36.8 million, or 40.0% of sales compared to $52.0 million, or 55.3% last year. Excluding the impact of the sale of excess discontinued product and the reserve for excess non-core component inventory, gross profit as a percent of sales was 49.3%.

Operating expenses decreased by $10.1 million, or 13.3%, to $65.9 million versus $76.0 million in the same period last year, primarily as a result of the Company's cost reduction plan.

Adjusted operating loss in the fourth quarter of fiscal 2010 was $13.4 million compared to $13.9 million in the same period last year (see attached table for reconciliation of GAAP to non-GAAP measures). On a GAAP basis, operating loss was $29.0 million compared to $24.0 million, which included the aforementioned special items in fiscal 2010 and 2009.

Adjusted EBITDA was a loss of $9.0 million compared to adjusted EBITDA loss of $9.1 million in fiscal 2009. Including the aforementioned items, EBITDA in the fourth quarter of fiscal 2010 was a loss of $24.7 million compared to a loss of $19.1 million in fiscal 2009 (see attached table for reconciliation of GAAP to non-GAAP measures).

Fiscal 2010

Adjusted net loss in fiscal 2010 was $11.9 million, or $0.48 per diluted share, compared to adjusted net income of $16.4 million, or $0.64 per diluted share in fiscal 2009 (see attached table for reconciliation of GAAP to non-GAAP measures). On a GAAP basis net loss was $54.6 million, or $2.23 per diluted share, which includes: (i) the aforementioned items recorded in the fourth quarter related to the reserve for excess non-core component inventory and asset write downs totaling $16.4 million pre-tax, or $0.57 per diluted share; (ii) a pre-tax charge in interest expense of $1.3 million, or $0.03 per diluted share, related to the refinancing and repayment of the Company's former credit and note agreements that was recorded in the second quarter of fiscal 2010; (iii) a pre-tax charge of $2.4 million, or $0.06 per diluted share, for sales of excess discontinued product; and (iv) a tax provision that includes a non-cash deferred tax expense of $34.5 million, or $1.41 per diluted share, related to a valuation allowance on net deferred tax assets, partially offset by a cash income tax benefit of $8.0 million, or $0.33 per diluted share, attributable to the recent U.S. tax law changes. This compares to net income of $2.3 million, or $0.09 per diluted share, in fiscal 2009, which included one-time items, totaling $14.1 million, or $0.55 per diluted share.

Net sales in fiscal 2010 decreased 17.9% to $378.4 million compared to $460.9 million in fiscal 2009. The decline is primarily the result of the challenging macroeconomic environment, retailer destocking which occurred throughout the year, and proactive sales management in light of industry liquidation and credit risks. Net sales for the year included $14.6 million of excess discontinued inventory.

Gross profit in fiscal 2010 was $184.5 million, or 48.8% of sales compared to $284.9 million, or 61.8% last year. Excluding the impact of the sale of excess discontinued product and the reserve for excess non-core component inventory, gross profit as a percent of sales was 53.8%.

Operating expenses decreased by $60.6 million, or 21.5%, to $221.0 million versus $281.6 million in the same period last year, primarily as a result of the Company's cost reduction plan.

Adjusted operating loss in fiscal 2010 was $17.7 million compared to adjusted operating income of $19.0 million in the same period last year (see attached table for reconciliation of GAAP to non-GAAP measures). On a GAAP basis, operating loss was $36.4 million compared to operating profit of $3.4 million, which included the aforementioned special items in fiscal 2010 and 2009.

Adjusted EBITDA in fiscal 2010 was $1.0 million compared to adjusted EBITDA of $37.5 million in fiscal 2009 (see attached table for reconciliation of GAAP to non-GAAP measures). Including the aforementioned items, EBITDA was a loss of $17.7 million compared to EBITDA of $21.8 million in fiscal 2009.

At the end of fiscal 2010, the Company had net cash of $61.0 million, up from $21.6 million at the end of fiscal 2009. For fiscal 2010, the Company also had cash flow from operations of $34.7 million. Additionally, the Company reduced its total debt at year-end to $10.0 million, down from $65.0 million at the end of the prior fiscal year.

Fiscal 2011 Guidance

Rick Cote, President and Chief Operating Officer, stated, "Executing our strategies to return to top-line sustainable growth will be the driver for us to improve our profitability long-term. In the coming year, we will build the business for our core portfolio of brands - including Movado, Ebel and ESQ by Movado - with a focus on product innovation, improved execution of product segmentation and pricing and increased marketing investments. At the same time, we will focus on maintaining our strong licensed brands business and reducing the negative contribution from areas of our business that are underperforming. We are currently evaluating our long-term business plans to incorporate the changed consumer and market environments and we continue to expect to share our multi-year growth plan with investors when we report second quarter earnings."

The Company reaffirmed its previous guidance for fiscal 2011 provided on March 15, 2010. The Company continues to anticipate that it will improve adjusted EBITDA from a slight gain in fiscal 2010 to range between $15 million and $20 million in fiscal 2011. With the requirement to record a tax valuation allowance, the Company anticipates recording a tax expense in fiscal 2011 and therefore expects to report a net loss for the year. On a GAAP basis, the Company continues to anticipate a net loss in the range of $5 million to $10 million, or $0.20 to $0.40 per diluted share. This guidance is predicated on, among other things, a 10% to 15% sales increase for the year (excluding fiscal 2010 excess discontinued product sales) and an increase in operating expenses due to the Company's investments in brand building. The Company's guidance assumes no unusual charges for fiscal 2011.

Conference Call Information

The Company's management will host a conference call today at 10:00 a.m. ET. A live broadcast of the call will also be available on the Company's website: www.movadogroup.com. The call will be archived online within one hour of the completion of the call.

Movado Group, Inc. designs, sources, and distributes Movado, Ebel, Concord, ESQ by Movado, Coach, Tommy Hilfiger, HUGO BOSS, Juicy Couture and Lacoste watches worldwide, and operates Movado boutiques and company stores in the United States.

The Company is presenting adjusted net income (loss)), which is net income (loss) excluding sales of excess discontinued product, non-cash reserves related to excess non-core component inventory, the write down of certain assets of its Movado boutiques and tradeshow booths for the Basel Fair, severance related expenses, refinancing related expenses, the tax provision related to the valuation allowance on net deferred tax assets and the income tax benefit attributable to the recent U.S. tax law change increasing the net operating loss carryback period to five years. The Company is presenting adjusted operating income (loss), which is operating income (loss) excluding sales of excess discontinued product, non-cash reserves related to excess non-core component inventory, severance related expenses and the write-down of certain assets of its Movado boutiques and trade show booths for the Basel Fair. The Company believes that it is useful to investors to eliminate the effect of these unusual items in order to improve the comparability of the Company's results for the periods presented.

The Company is presenting adjusted EBITDA, which is adjusted operating income (loss) plus depreciation and amortization because the Company believes that adjusted EBITDA is a useful performance measure for assessing the performance of the Company's ongoing operating activities, as it reflects the Company's earnings trends without the impact of certain non-cash charges and is frequently used by investors and other interested parties in the evaluation of companies in our industry.

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, whenever possible, to identify these forward-looking statements using words such as "expects," "anticipates," "believes," "targets," "goals," "projects," "intends," "plans," "seeks," "estimates," "may," "will," "should" and similar expressions. Similarly, statements in this press release that describe the Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual results, performance or achievements and levels of future dividends to differ materially from those expressed in, or implied by, these statements. These risks and uncertainties may include, but are not limited to: actual or perceived weakness in the U.S. and global economy and fluctuations in consumer spending and disposable income, the Company's ability to successfully implement its brand strategy, the ability of the Company's brand strategy to improve its net sales, profitability and other results of operations, the Company's ability to successfully introduce and sell new products, the Company's ability to successfully integrate the operations of newly acquired and/or licensed brands without disruption to its other business activities, changes in consumer demand for the Company's products, risks relating to the fashion and retail industry, import restrictions, competition, seasonality, the ability of the Company's U.S. operations to generate sufficient income to use accumulated tax losses, commodity price and exchange rate fluctuations, changes in local or global economic conditions, and the other factors discussed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time. The Company assumes no duty to update its forward looking statements and this release shall not be construed to indicate the assumption by the Company of any duty to update its guidance in the future.


                               MOVADO GROUP, INC.
                        Consolidated Statements of Income
                      (in thousands, except per share data)
                                   (Unaudited)


                           Three Months Ended            Twelve Months Ended
                              January 31,                    January 31,
                              -----------                    -----------

                            2010            2009           2010          2009
                            ----            ----           ----          ----

    Net sales            $92,154         $93,969       $378,396      $460,857

    Cost of sales         55,313          41,969        193,857       175,913
                          ------          ------        -------       -------

    Gross profit          36,841          52,000        184,539       284,944

    Selling, general
     and
     administrative
     expenses             65,867          75,983        220,965       281,554
                          ------          ------        -------       -------

    Operating (loss) /
     income              (29,026)        (23,983)       (36,426)        3,390

    Other income               -             681              -           681
    Interest expense        (736)           (724)        (4,533)       (2,915)
    Interest income           24             239            111         2,132
                             ---             ---            ---         -----

    (Loss) /income
     before income
     taxes and
     noncontrolling
     interests           (29,738)     (23,787)    (40,848)     3,288

    (Benefit from) /
     provision for
     income taxes         (6,172)         (1,066)        13,553           736
    Net (loss) /
     income attributed
     to noncontrolling
     interests                (8)             78            224           237
                             ---             ---            ---           ---

    Net (loss) /
     income attributed
     to Movado Group,
     Inc.              ($23,558)        ($22,799)     ($54,625)        $2,315
                        ========        ========       ========        ======

    Net (loss) /
     income per
     diluted share        ($0.96)         ($0.93)        ($2.23)        $0.09
    Weighted diluted
     average shares
     outstanding          24,636          24,453         24,541        25,554


                               MOVADO GROUP, INC.
                              Reconciliation tables
                      (in thousands, except per share data)
                                   (Unaudited)


                        Three Months Ended        Twelve Months Ended
                            January 31,               January 31,
                            -----------               -----------

                           2010            2009        2010          2009
                           ----            ----        ----          ----

    Operating (loss) /
     income (GAAP)     ($29,026)       ($23,983)   ($36,426)       $3,390
    Sales of excess
     discontinued
     inventory (1)         (682)              -       2,407             -
    Inventory reserves
     (2)                  8,777               -       8,777             -
    Severance related
     expenses (3)             -           5,536           -        11,122
    Asset write-downs
     (4)                  7,575           4,526       7,575         4,526
    Adjusted operating
     (loss) /income
     (non-GAAP)         (13,356)        (13,921)    (17,667)       19,038

    Depreciation and
     amortization         4,352           4,842      18,698        18,457
    Adjusted EBITDA
     (non-GAAP)         ($9,004)        ($9,079)     $1,031       $37,495
                        =======         =======      ======       =======


                        Three Months Ended       Twelve Months Ended
                            January 31,              January 31,
                            -----------              -----------

                           2010            2009        2010          2009
                           ----            ----        ----          ----

    Net (loss) /
     income (GAAP)     ($23,558)       ($22,799)   ($54,625)       $2,315
    Sales of excess
     discontinued
     inventory (1)         (427)              -       1,507             -
    Inventory reserves
     (2)                  6,864               -       6,864             -
    Severance related
     expenses (3)             -           3,770           -         7,574
    Asset write-downs
     (4)                  7,042           2,851       7,042         2,851
    Refinancing
     expenses and fees
     (5)                      -               -         839             -
    Tax adjustments
     (6)                 11,100           7,388      34,500         3,648
    Tax law changes
     (7)                 (8,000)              -      (8,000)            -
    Adjusted net
     (loss) /income
     (non-GAAP)         ($6,979)        ($8,790)   ($11,873)      $16,388
                        =======         =======    ========       =======

    Adjusted net
     (loss) /income
     per share (non-
     GAAP)               ($0.28)         ($0.36)     ($0.48)        $0.64
    Weighted diluted
     average shares
     outstanding         24,636          24,453      24,541        25,554




    (1)  (Income) /losses associated with sales of excess discontinued
    inventory.
    (2)  Non-cash reserve primarily for excess non-core component inventory.
    (3)  Charges related to the implementation of the Company's expense
    reduction plans.
    (4)  Amounts in current year primarily represent non-cash impairment
    charges related to Movado boutiques and the write-down of certain
    assets related to trade booths for the Basel Fair.  Amounts in the
    prior year represent non-cash impairment charges related to the
    Movado boutiques.
    (5)  Expenses and fees associated with the refinancing and repayment
    of the Company's former credit and note agreements.  Such charges
    were recorded in Interest Expense on the Consolidated Statements of
    Income.
    (6)  Taxes recorded in the current period primarily reflect a non-
    cash charge to record valuation allowances on the Company's net
    deferred tax assets as necessary.  Actual taxes in the prior period
    include a $7.4 million charge on the future repatriation of foreign
    earnings.  Additionally, taxes recorded in the prior year twelve
    month period reflect utilization of the acquired Ebel net operating
    loss tax carryforward.
    (7)  Income tax benefit attributable to the recent tax law changes
    increasing the net operating loss carryback period to five years.

                        MOVADO GROUP, INC.
                    CONSOLIDATED BALANCE SHEETS
                          (in thousands)
                            (Unaudited)


                                            January        January
                                               31,            31,
                                                2010           2009
                                                ----           ----
    ASSETS
    ------


      Cash and cash equivalents              $70,975        $86,621
      Trade receivables, net                  67,206         76,710
      Inventories, net                       204,096        228,884
      Other current assets                    38,014         47,863
          Total current assets               380,291        440,078
                                             -------        -------

      Property, plant and equipment, net      47,394         66,749
      Deferred income taxes                   12,347         23,449
      Other non-current assets                29,345         33,714
                                              ------         ------
          Total assets                      $469,377       $563,990
                                            ========       ========

    LIABILITIES AND EQUITY
    ----------------------


      Loan payable to banks                       $-        $40,000
      Current portion of long-term debt            -         25,000
      Accounts payable                        22,661         20,794
      Accrued liabilities                     35,161         47,686
      Deferred and current income taxes
       payable                                   541            430
                                                 ---            ---
          Total current liabilities           58,363        133,910
                                              ------        -------

      Long-term debt                          10,000              -
      Deferred and non-current income
       taxes payable                           7,874          6,856
      Other non-current liabilities           21,688         22,459
      Noncontrolling interests                 1,884          1,506
      Shareholders' equity                   369,568        399,259
                                             -------        -------
          Total liabilities and equity      $469,377       $563,990
                                            ========       ========



SOURCE Movado Group, Inc.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Movado Group Inc's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.