Business/Financial Results, Non-Reliance of Financial Report (Form 8-K)

The information appearing below under the heading "Preliminary Fourth Quarter and Fiscal Year 2025 Results" in Item 7.01 regarding Movado Group, Inc.'s (the "Company") fourth quarter and fiscal year ended January 31, 2025, is incorporated herein by reference.

The information under this Item 2.02 is deemed "furnished" and not "filed" under Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

In late January 2025, the Company became aware of allegations of misconduct within the Dubai branch (the "Dubai Branch") of the Company's Swiss subsidiary, MGI Luxury Group Sárl, related to sales to certain customers in the Middle East, India & Asia Pacific region (the "Affected Region"). Promptly thereafter, the Company retained outside counsel to conduct an investigation into these allegations. Based on that investigation, which is now substantially complete, the Company has determined that the former managing director of the Dubai Branch, who oversaw the Affected Region, 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 in the Affected Region. 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 (beginning with the Company's fiscal year ended January 31, 2021). The investigation has not identified any impact to reported sales to customers in other regions, nor has the investigation identified any knowledge of, or participation in, the misconduct by Company employees (whether members of management or otherwise) outside of the Affected Region. The Company has terminated the now former managing director of the Dubai Branch.

The Company has concluded that its historical consolidated financial statements for the fiscal years ended January 31, 2024, 2023 and 2022, and the interim periods within fiscal years 2025 and 2024 (the "Affected Periods"), require restatement to properly record the extent and timing of sales earned and credits issued during the relevant time period. Additionally, the restated interim periods of fiscal 2025 reflect a reduction in operating expenses as a result of the reversal of certain accruals due to the lower adjusted operating results. As a result, the Company is including restated unaudited consolidated financial information for the Affected Periods under the heading "Supplemental Schedules" below. The misstatements did not impact the Company's cash flows or compliance with the debt covenants in the Company's credit agreement.

In the course of the investigation referred to above, management identified a material weakness in internal control over financial reporting, wherein the Company's risk assessment process did not properly assess the risks associated with the lack of functional segregation of duties in the Company's Dubai Branch. Management has concluded that the Company's internal control over financial reporting and disclosure controls and procedures for the Affected Periods were not effective. The Company has begun and will continue to implement changes designed to improve its internal control over financial reporting and to remediate the material weakness, including implementing changes to the organizational structure in the Affected Region to mitigate the risk of inappropriate influence being applied to circumvent existing controls. In addition to these remedial actions, the Company is committed to reinforcing its policies and procedures, continuing controls monitoring, deploying additional trainings, and taking additional measures to modify, or add to, these remediation measures, as necessary.