Good day, everybody, and welcome to the Movado Group, Incorporated Third Quarter Fiscal Year 2025 Earnings Conference Call. As a reminder, today's call is being recorded and may not be reproduced in full or in part without permission from the company. At this time, I would like to turn the conference over to Allison Malkin of ICR. Please go ahead.

Good morning, everyone. With me on the call is Efraim Grinberg, Chairman and Chief Executive Officer; and Sallie DeMarsilis, Executive Vice President and Chief Operating Officer and Chief Financial Officer. Before we get started, I would like to remind you of the company's safe harbor language, which I'm sure you're all familiar with. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release. If any non-GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release. Now, I would like to turn the call over to Efraim Grinberg, Chairman and Chief Executive Officer of Movado Group.

Thank you, Allison. Welcome to Movado Group's third quarter conference call. With me today is Sallie DeMarsilis, our COO and CFO. I will first review our overall results and our progress against our strategic initiatives and then Sallie will review our financial results in greater detail. Over the last year, we have made significant progress on a number of strategic initiatives, including the introduction of iconic new product families across our brand portfolio and revitalizing our marketing efforts and storytelling across our brands and regions. As we began the year, we made the decision to invest in driving revenue growth and brand awareness with increased marketing spend. While net sales are down 2.9% for the year-to-date period, we continue to believe that the investments we've made have strengthened our brands and provide a solid foundation for growth in the coming years. Nonetheless, given the challenging environment for both our category and retailers in the US and Europe and consistent with the message conveyed on our second quarter conference call, we have started to take the steps needed to drive improving financial performance. Our focus now is on a successful holiday season and building a strong business model for next year that will reduce costs, continue our brand-building initiatives while rationalizing marketing investments, delivering on key growth opportunities such as jewelry and growth markets like India and Southeast Asia and returning North America and our Movado brand to higher levels of profitability. With $182 million of cash and no debt, we continue to have a strong balance sheet and believe that our dividend is a priority to continue to return value to our shareholders. Today, we also announced that our Board of Directors approved a new $50 million share repurchase plan. During the third quarter, retailers continued to tightly manage inventories…

Thank you, Efraim, and good morning, everyone. For today's call, I will review our financial results for the third quarter and year-to-date period of fiscal 2025, and then I will provide an update on our outlook for the year. My comments today will focus on adjusted results. Please refer to the description of the special items included in our results for the third quarter and year-to-date period of fiscal 2025 in our press release issued earlier today, which also includes a reconciliation table of GAAP and non-GAAP measures. Overall, our performance for the third quarter of fiscal 2025 continued to be negatively impacted by a challenging environment, both in our category and by retailers in the United States and Europe. Despite being down year-over-year, as Efraim mentioned, we made good progress on our strategic initiatives and maintained an extremely strong balance sheet. Turning to a review of the quarter. Sales were $182.7 million as compared to -- I'm sorry, $187.7 million last year, a decrease of 2.6%. In constant dollars, the decrease in net sales was 3.5%. Net sales decreased across owned brands and company stores, partially offset by an increase in licensed brands. By geography, US net sales decreased 7.1% as compared to the third quarter of last year. International net sales increased 0.4%. On a constant currency basis, International net sales decreased 1.1% with continued softening in our largest international market, Europe. Gross profit as a percent of sales was 53.8% compared to 54.5% in the third quarter of last year. The year-over-year decrease in gross margin rate was primarily driven by unfavorable channel and product mix and the deleverage of higher fixed costs over lower sales. Operating expenses were $89.1 million as compared to $81.6 million for the same period of last year. The increase was driven…

[Operator Instructions] Our first question comes from the line of Michael Legg with The Benchmark Company. Please proceed with your question.

Thanks, good morning. On the new stock buyback authorization, is there any change to your usage of it as far as being active in stock buyback versus just offsetting dilution.

Right now, it's focused on offsetting dilution. And then as we hopefully will generate more cash, we're open to change that as well.

And then you mentioned that inventory levels at retail are light. Can you talk about historic when you see trends [Technical Difficulty]

You've gotten quiet, Mike. It's gone very quiet.

Can you hear me now?

Yeah, I can hear you.

Okay. So retail inventory levels, you mentioned were light, can you talk about any leading indicators that you've seen in the past as when purchasing trends change and how lead time you have with that and any of the leading indicators you look for positive consumer behavior? Thanks.

Sure. So I think the inventory levels now are pretty -- getting to a historic historically low level in both the US and Europe, which are the two markets for us that are the most developed and the markets that are most sensitive and focused on that. Historically, as the economic environment improves and retail improves, I think that we've seen a bounce back and an openness to rebuild inventories as retailers realize that they're losing sales. I think one of the differences in the dynamic today is that people have built e-commerce businesses that carry less inventory than in-store businesses. But in really no cases is the dot-com business more than 20% to 25% of a retailer's overall business.

Okay. Thank you.

Thank you. And we have reached the end of the question-and-answer session. I'll now turn the floor back to Efraim Grinberg for closing remarks.

Okay. Thank you very much for being with us on the call today. I am optimistic about the category overall, beginning to see improvements in the future. But we are really focused as a company of continuing to focus on what we can control and very focused on driving down our expenses next year as a company and returning to an acceptable level of profitability. With that, I'd like to wish everybody a great holiday season and wish you all the best. So, thank you very much.

And this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.