On April 11, 2025, Movado disclosed that it had “[become] aware of allegations of misconduct within the Dubai branch” of its Swiss subsidiary, MGI Luxury Group Sárl, relating to “sales to certain customers in the Middle East, India & Asia Pacific region.” Thereafter, Movado “determined that the former managing director of the Dubai Branch . . . as well as certain employees under his direction, took actions that resulted in an overstatement of sales, premature recognition of sales, and underreporting of credit notes (e.g., sales discounts) owed to customers.” These actions included “the use of a third-party warehouse unknown to the Company’s management to facilitate the premature recognition of sales, and the falsification of documents to circumvent internal controls. The conduct occurred over a period of approximately five years[.]” The Company further determined that its financial statements dating back to 2022 require restatements in order to “properly record the extent and timing of sales earned and credits during the relevant time period” and disclosed that management had concluded that “the Company’s internal control over financial reporting and disclosure controls and procedures…were not effective.”
On this news, Movado’s stock price fell, closing at $13.56 per share, a 1.81% decrease from the previous day’s closing price of $13.81.
