MOVADO GROUP INC Income Taxes Disclosure

NOTE 12 - INCOME TAXES

As of January 31, 2026, the Company had U.S. state and foreign net operating loss carryforwards of $0.7 million and $3.9 million, respectively, with expiration dates ranging from 1-10 years and, with respect to some foreign jurisdictions, an indefinite carryforward period. Of the foreign net operating losses, $1.7 million is related to the United Kingdom, $1.2 million is related to China and the remaining is related to other foreign countries.

A valuation allowance is required to be established unless management determines it is more likely than not that the Company will ultimately utilize the tax benefit associated with a deferred tax asset. The Company has foreign valuation allowances of $3.7 million, which are primarily related to net operating loss carryforwards.

Management will continue to evaluate the appropriate level of valuation allowance on all deferred tax assets considering such factors as prior earnings history, expected future earnings, carryback and carryforward periods and tax and business strategies that could potentially enhance the likelihood of realization of the deferred tax assets.

The Company elected to account for the tax on Global Intangible Low-Taxed Income ("GILTI") as a period cost and therefore has not recorded deferred taxes related to GILTI. The One Big Beautiful Bill Act (“OBBBA”) renamed the provision for taxes on foreign earnings from GILTI to net controlled foreign corporation tested income (“NCTI”).

The effective tax rate for fiscal 2026 was 21.8% and differed from the U.S. statutory tax rate of 21.0% primarily due to nondeductible items, partially offset by the deduction of Foreign-Derived Intangible Income and foreign profits being taxed in lower taxing jurisdictions. The effective tax rate for fiscal 2025 was 27.9% and differed from the U.S. statutory tax rate of 21.0% primarily due to the tax consequences of a foreign currency gain related to an extraordinary intercompany dividend and an increase in valuation allowances against certain foreign losses, partially offset by foreign profits being taxed in lower taxing jurisdictions.

$6.9 million of the U.S. Federal payments listed above was the final payment for the one-time mandatory deemed repatriation tax on cumulative undistributed foreign earnings which have not been previously taxed. $3.9 million of the Hong Kong payments listed above was related to fiscal 2025. Cash paid for income taxes, net of refunds received, during fiscal 2025 and 2024 was $28.4 million and $28.7 million, respectively.

On July 4, 2025, the OBBBA was signed into law by President Trump. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact on the Company's Consolidated Financial Statements for fiscal 2026. The Company will continue to evaluate and monitor potential impacts on future periods and does not expect the OBBBA to have a material impact on its Consolidated Financial Statements.

The Organization for Economic Cooperation and Development (“OECD”) has issued Pillar Two model rules implementing a new global minimum tax of 15%, which was intended to be effective on January 1, 2024 While several countries have adopted and enacted changes to their legislation in response to Pillar Two, in January 2025, the President of the United States issued an executive order announcing the United States’ opposition to aspects of these rules. The Company's revenue currently does not meet the minimum requirements that were set by OECD inclusive framework and rules. Although the Company will continue to evaluate and monitor the enactments of Pillar Two, to the extent that Pillar Two becomes applicable, the Company does not expect a material impact on its Consolidated Financial Statements.

The Company conducts business globally and, as a result, is subject to income taxes in the U.S. federal, state, local and foreign jurisdictions. In the normal course of business, the Company is subject to examinations by taxing authorities in many countries, such as Germany, Hong Kong, Switzerland and the United States. The Company is no longer subject to income tax examination for years ended prior to January 31, 2022, with few exceptions.

Included in the balances at January 31, 2026, January 31, 2025 and January 31, 2024 are $0.5 million for each period of unrecognized tax benefits which would impact the Company’s effective tax rate, if recognized. As of January 31, 2026, January 31, 2025, and January 31, 2024, the Company had $0.3 million, $0.3 million and $0.2 million, respectively, of accrued interest (net of tax benefit) and penalties related to unrecognized tax benefits. Interest (net of tax benefit) and penalties accrued in fiscal years 2026, 2025 and 2024 were immaterial.

At January 31, 2026, the Company had no deferred tax liability for substantially all of the undistributed foreign earnings of approximately $253.4 million because the Company intends to permanently reinvest such earnings in its foreign operations. It is not practicable to estimate the tax liability related to a future distribution of these permanently reinvested foreign earnings.