Suzanne Rosenberg – VP Corporate Communications Efraim Grinberg – President & CEO Richard Cote – Executive VP & COO Sallie Demarsilis - CFO

Jeff Blaeser – Morgan Joseph Kristine Koerber – JMP Securities Jody Kane – Sidoti & Company David Taylor – David P. Taylor & Company

Good morning ladies and gentlemen and welcome to Movado Group’s first quarter earnings conference call. (Operator Instructions) I would now like to introduce Ms. Suzanne Rosenberg of Movado Group; please go ahead.

Good morning everyone and thank you for joining us today. With me on the call is Efraim Grinberg, President and Chief Executive Officer; Richard Cote, Chief Operating Officer, and Sallie Demarsilis, Chief Financial Officer. Before we begin I would like to note that this conference call contains forward-looking statements which are made in pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors which could cause actual results to be materially different from any future results, expressed or implied, are discussed in our filings with the Securities and Exchange Commission. Such forward-looking statements include statements regarding Movado’s performance for fiscal 2009 and beyond. We currently expect to update estimates. However, the failure to update this information should not be taken as Movado’s acceptance of these estimates on a continuing basis. Movado Group may also choose to discontinue presenting future estimates at any time. During the course of today’s conference call management may present certain non-GAAP figures. For a reconciliation of these figures along with information required under SEC Regulation G, please view our earnings press release which has been posted on our website at www.movadogroup.com. Let me now outline the order of speakers and topics for today’s conference call. Efraim will begin with the highlights of our first quarter, Sallie will then review the financial details and Richard will provide you with an update on our operating initiatives along with our financial outlook. We would then be glad to answer any questions you might have. I would now like to turn the call over to Efraim.

Thank you Suzanne and good morning everyone. In our seasonally smallest quarter the strength of our international business, which generates approximately half of our wholesale watch revenue offset the continued effects of a challenging retail and economic environment in the United States. In the first quarter our licensed watch portfolio delivered a very strong performance, posting a 44% increase in sales over last year. In addition to Coach, Tommy Hilfiger, and Hugo Boss, this segment of our business includes our youngest businesses; Juicy Couture and Lacoste, each of which has significant global growth potential. Our success in this category stems from our heritage as brand builders. We offer brands, a best-in-class approach, to brand management, product development and marketing. Our license portfolio is geographically diverse as we develop our businesses in all regions and countries where the parent brand has a demonstrated success. From a regional perspective, South America has been very productive for our license brands, especially Tommy Hilfiger, with leadership positions in countries such as Venezuela and Brazil. Hugo Boss and Lacoste are also developing nicely in this region. Europe represents that largest component of our licensed brand sales. Here we’ve had excellent success with our joint venture markets; the UK, France and Germany as well as several other key Western European markets. In Asia we’ve experienced significant growth across our licensed portfolio. During the first quarter we transitioned from a distributor to a direct sales model in Japan which will enhance our ability to develop this key coach watch market; increasing both sales and gross margin. Our luxury category, Concord and Ebel, recorded a mid single-digit sales decline primarily resulting from the timing of deliveries of new product introductions in Ebel internationally. Concord continued to build on the excitement of its niche luxury positioning with the expansion of the C1 Collection at Basel this year. The high end of the men’s mechanical watch market remains overheated and this does continue to impact our lead times and deliveries. Nevertheless there is a strong retailer and consumer demand and the worldwide buzz has been terrific, particularly with our launch of the groundbreaking C1 Tourbillon Gravity, featuring the first tourbillon movement outside of the case. In Ebel, the first quarter marked the launch of a new Beluga collection which has been redesigned in a diamond set execution. This important product introduction is strongly supported by new ultra feminine advertising campaign featuring Gisele, [inaudible] in mid April. Our accessible luxury segment comprised of Movado and ESQ was impacted the most by the slowdown in the domestic economy, as this category generates approximately 80% of its sales from the US. Additionally we curtailed shipments to certain wholesale customers who are being challenged in this current environment. We continue to develop and execute strategies with our retail partners, [inaudible] business at all points of sale. And our business in the Caribbean, South America, Latin America, and Canada remain strong. In our Movado brand, we remain focused on protecting and gaining market share, particularly in this difficult environment. We also continue to take a long-term view of our business and as such our team is steadily executing our comprehensive Movado brand strategy announced earlier this year. Already, we have made significant headway in our previously announced 35% targeted reduction of wholesale doors and we are pleased with retailers’ reactions to our strategy. There are significant opportunities to embrace the power of Movado across all channels of distribution and to continue to build on the aspirational nature of the brand. At Basel this year we began to implement product segmentation initiatives. Retailers from around the world saw a wide variety of products tailored to their retail consumer including the new Movado Esperanza with ceramic inserts, the Vizio Chronograph with carbon fiber and a new Ono watch collection. Series 800 delivered excitement at Basel with the launch of a limited edition Derek Jeter Chronograph; [inaudible] to consumers in the fall. In our Movado Boutiques, we are committed to delivering a distinctly branded luxury experience and properly positioning this business for long-term success. Fiscal 2009 is a transition year for the boutiques as we build a stronger base for future growth. We have enhanced the visual presentations of the boutiques with stronger merchandising of key items and hero product along with visual cues that help consumers navigate our stores. We are also focused on leveraging the core strength of Movado and presenting a better balance of watches in our boutiques to create the ultimate watch-buying experience. We will tailor our assortments to the boutique shopper with the newest and most exclusive watch styles; such styles in all price categories will launch in stores over the next 12 to 24 months. We are also in the process of refocusing our jewelry collections into a stronger assortment that truly speaks to the premium Movado consumer. As of April 1st, we appointed a new design director for all Movado products and starting next year you will see a unified and reenergized design philosophy throughout our product offerings. Beginning next spring, you will see revitalized Movado designed jewelry offering as well as a greater focus on Movado diamond assortment. And as previously announced we are in the process of recruiting a new President of Movado Boutiques. Outside of North America we continue to develop the Movado brand in China. At Basel this year we successfully previewed a special collection for this market; Movado Red Label. This all men’s collection features automatic time, with red accents on Movado’s most iconic watch collection such as the classic Museum watch and the sports edition model. In the United States this special collection will only be showcased in our Movado Boutiques. ESQ also continues to be effected by the domestic economic slowdown. Nevertheless we continue to take advantage of the growing opportunity that exists in the $300 to $800 price category. At Basel this year we launched a great amount of excitement with a new Fusion watch for women including one style featuring rose, gold and diamonds. Other collections such as Renegade and Prescott were also very well received. During the first quarter we began to launch ESQ in the Middle East where we believe there is a great appetite for Swiss leadership product at an attainable price point. We continue to manage through the strong macroeconomic headwinds in the US and believe we are well positioned to weather these challenges. We maintain our focus on the long-term success of our brands and our businesses around the world. This commitment combined with our financial strength and flexibility strongly positions Movado Group for the future. As you may recall Sallie Demarsilis was appointed Chief Financial Officer earlier this year, and I would now like to turn the call over to Sallie for a review of our financial results.

Thank you Efraim and good morning everyone. Let me start off by saying what a pleasure it is to be a part of this conference call with Movado Group. I’m both honored and thrilled to be working in a great organization with strong values, talented people, and a powerful portfolio of brands, a strong balance sheet, and great opportunities to drive long-term profitable growth. Now let me review our first quarter results. Sales for the first quarter were $101.4 million or flat to last year. The prior year included $2.7 million of excess discontinued product sales. Excluding these sales, net sales increased 2.7% from last year. Sales were favorably impacted by the affect of foreign currency. On a constant exchange rate basis, sales decreased by 2.6%. The balance of my remarks as they relate to sales, will exclude the excess discontinued product sales reported last year. Sales in the wholesale segment increased by $4.2 million or 5.2% to $85.3 million. The increase was driven by growth in our licensed brand category, which is above prior year, by $9.7 million or 44.3%. The growth in licensed brands was primarily driven by our international markets. This increase partially offset decreased in our luxury and accessible luxury categories, which were down $0.9 million and $5.2 million respectively. As Efraim mentioned, the luxury category was impacted by the timing of new product introductions, while the accessible luxury category was impacted by the weak US economy and actions we’ve taken to limit our credit exposure. The US wholesale business was below prior year by 10.6%. The decrease was primarily due to our accessible luxury brand performance as previously discussed. Net sales for the international wholesale segment were $48.1 million, or about prior year by 22%. This was primarily the result of growth and market expansion of our licensed brands. Net sales for our retail segment, which includes our Movado Boutiques and company stores, were $16.1 million; below prior year by 8.6%. Movado Boutique sales were below prior year by $1.3 million and our outlets were slightly below last year. Gross profit for the quarter was $65 million or above last year by $3.3 million. Gross margin increased to 64.2% as compared to 60.8% last year. Excluding the impact of sales of excess discontinued product in the prior year, gross margin was 62.9%. The increase in gross margin was a result of improvements across all brand categories. Operating expenses were $63.4 million or 7.7% above last year. The amount of $2.2 million of this increase was attributable to the negative impact of foreign exchange. On the wholesale side of the business the principal reason for the increase was higher payroll and related costs to support our international and licensed brand growth as well as increased costs to support [inaudible] brands joint venture activity. On the retail side of the business, operating expenses increased due to remodeled stores and stores opened after the first quarter of last year. Income tax expense was $567,000 reflecting a 30.4% tax rate in the first quarter, compared to income tax expense of $647,000 or 20.6% tax rate recorded last year. Income tax expense this year included a charge of $0.2 million versus a net benefit of $0.2 million included in last year’s income tax expense resulting from adjustments recorded in the respective quarters. Net income for the quarter was $1.2 million versus $2.4 million last year and earnings per diluted share were $0.05 versus $0.09 last year. Now turning to our balance sheet, our cash as of April 30, 2008 is $127.5 million versus $101.8 million in the prior year. Accounts receivable of $89.5 million is below prior year by $16.2 million. In constant dollars our accounts receivable are below prior year by 18.6%. The receivable balance for the current year is net of the sales returns accrual made at year-end related to the closing of certain Movado wholesale doors. Inventory of $231.4 million increased from $212.1 million last year. In constant dollars inventory was essentially flat. Total debt consisting of both short and long-term debt was $71.4 million versus $76.5 million last year. Lastly capital expenditures for the quarter were $6.3 million and depreciation expense was $4.2 million. We expect our capital expenditures for the full year to be approximately $29 million which includes spending associated with our new ERP system. Now let me turn the call over to Richard.

Thank you Sallie, good morning everyone. The accessible luxury market in the US remains challenging and while department stores have been generating traffic with promotions many mall-based jewelers and independents are having a harder time. During the first quarter we continued to be mindful of the current economic environment and took appropriate actions to limit our credit exposure. We are also cognizant of our expense infrastructure and expect to appropriately manage costs during these uncertain times. It is imperative that we maintain the same level of financial rigor and discipline regardless of the economic environment. Importantly our balance sheet remains strong and we are well positioned to support our brands and businesses around the world. In our last conference call I outlined three key operating initiatives for fiscal 2009. First we are focused on executing our Movado brand strategy across our wholesale and retail channels. As Efraim mentioned we are working closely with our retail partners and have made good progress closing certain wholesale doors. These door-closings obviously impacted the sell-in of Movado during the first quarter and we expect this to continue in the second quarter. Over the near-term we would expect productivity per door to improve significantly because of the bold actions we are taking today. Our second operating initiative is aimed at maximizing growth opportunities in our existing businesses, particularly in our licensed brand portfolio. We would expect licensed brands to continue to be a primary driver of growth in fiscal 2009, not only as they increase in scale but also because their strong international presence provides a good counter balance to the slowdown taking place in the domestic economy. And third, the multi year rollout of a worldwide enterprise resource planning system. We intend to go live with our ERP implementation in early February of next year. This is an important undertaking for our company and will ultimately provide us with globalized, standard processes in a fully integrated end-to-end view of our multiple businesses. In April of this year, we completed a one million share repurchase program that was initiated last year. During the first quarter of fiscal 2009 we initiated a new repurchase program to buyback up to one million additional shares of our company’s common stock. To date, with both programs, we have repurchased a total of 1.5 million shares at a total cost of $29.7 million. Now I’d like to turn to our financial outlook. We continue to project fiscal 2009 net sales to range between $555 million and $565 million. We are also maintaining our guidance for diluted earnings per share to range between $1.65 and $1.72 based on a projected tax rate of 24%. Our guidance continues to reflect a cautious outlook on the US economic environment and favorable foreign exchange rates. This guidance also continues to include an approximate $0.20 per fully diluted share negative impact related to wholesale door closings, certain expenses related to the company’s ERP implementation, and severance costs to be completed as part of our Movado brand strategy. As a reminder, in fiscal 2008, our company reported adjusted diluted earnings per share of $1.71 which excluded a net realized tax benefit and an accrual for product returns reported in the fourth quarter. With that I would now like to open up the call for your questions.

(Operator Instructions) Your first question comes from the line of Jeff Blaeser – Morgan Joseph Jeff Blaeser – Morgan Joseph: Quick question on gross margins, I would estimate that the Movado line has probably one of the stronger gross margins and licenses lower due to the royalty costs, was product mix somewhat of a relative drag and if so were there other aspects that offset that with the strong year-over-year gross margin increase?

As you know the gross margin for the quarter was slightly above 64% which reverses a comparable number of under 63% last year so good growth in the gross margin as a percent of sales but your comments are correct that obviously Movado is one of our stronger gross margin products and with the accessible luxury category being impacted, that margin was held back as a result of the mix impact. So therefore, it would have been a little bit stronger and part of that is benefited because of the strength of our licensed brands and the strength of the European business that we have. Jeff Blaeser – Morgan Joseph: On the ERP system moving into Q1 of next year, will the cost move into that quarter as well or still in this fiscal year?

As you know we have three components built into that 20%, $0.20 negative impact that we have. Obviously with ERP there will be some shift but we’ll talk to that later on in the year as we have a better handle around all three of those cost components and the impact they will have and we will disclose that once we have a better feel as to the total of those three components.

Your next question comes from the line of Kristine Koerber – JMP Securities Kristine Koerber – JMP Securities: Looking at the international markets, was there strength across the board, I guess what I’m trying to figure out, were there any pockets of weakness or is international still holding up quite well?

We are seeing good resiliency internationally, although you are starting to see some pockets of weakness even in the first quarter a little bit in Spain which is probably the hardest hit market in Europe right now and there probably are some concerns in the UK as well. But we’ve seen fairly good strength across Europe but they also are getting higher energy costs now as well. Kristine Koerber – JMP Securities: As far as wholesale, the wholesale doors reduction, where do you stand? How many doors have you closed?

We’re in the process through the first and second quarters of closing these doors. We have now talked to all of our retail partners and we’ve agreed on the door closures. We’ve got a very good reception and a positive—people are very bullish on what this will do for the Movado brand and the value that we’re creating for them in their remaining doors. We expect to be completed by year-end with all of our door closures. But we’re very strongly on our way in that process.

Your next question comes from the line of Jody Kane – Sidoti & Company Jody Kane – Sidoti & Company: Can you talk a little bit about or just go a little more in depth into inventory, its up a little and I just want to figure out if that’s anticipation of more sales or just more product to be sold?

In Sallie’s comments we did mention that inventories on a constant currency basis were flat. So inventory is actually flat over last year and it’s really our international inventories that in the translation rise in our balance sheet.

The only other thing I would add to that is as you know we usually do build in the first half of the year inventory because obviously our lowest level is usually at our year-end, after the holiday sales. Jody Kane – Sidoti & Company: Should we expect inventory to start to decline as you start to exit the wholesale doors?

Well what you’ll see, again the doors that we’re exiting as a percent to our sales were relatively minor so no I don’t think you’re going to see a significant shift in inventory as a result of that. And also this year I wouldn’t expect any major shift from a decline standpoint in inventory because as we gear up for our ERP implementation, obviously we will also want to make sure that we have inventory aboard during that period of implementation that will take place in the first quarter of next year. Jody Kane – Sidoti & Company: Was there any impact to gross margin from wholesale door closures that you’ve done over the last, in the last quarter?

No not really, again that’s part of the mix aspect that we talked about with the previous question, but no not really and again, the door closures are relatively minor percent of our overall group sales. Jody Kane – Sidoti & Company: Do you think it will affect or do you think it will help the gross margin slightly or is it not going to make any difference what so ever?

No I think again because of the size of that, its immaterial so do not expect any change in gross margin as a result of the door closings itself. Jody Kane – Sidoti & Company: And then with SG&A being up a little bit, was there any increase in advertising or marketing expenditures because of new lines or new products or anything?

On a constant currency basis just because again some of the increase was based on currency, we’re up about 4.5% and most of that is really anniversarying investments that occurred in the second half or infrastructure for our licensed brands that occurred in the second half of the year and were not present in the first quarter of last year.

But we do remain a strong investor and will continue in supporting our brands and our marketing expenditures so no, you are not seeing reductions in that area. We’re seeing continued growth in that area now.

One of our focuses and I said it in my comments, but is very important to us, that in a challenging economic environment, the company is very focused on protecting and increasing its market share across its brands and so we have a history of doing that and that having very positive effects to the company over the long-term. Jody Kane – Sidoti & Company: Richard, in your prepared comments you said something about focusing on the cost side of the business can you just elaborate on that and if its not going to be advertising, where is it going to come from?

I think obviously as Efraim said, the first quarter where we have cost increases that took place in the second half of last year so obviously we’re not anniversarying that in the first quarter, we will be post here, but obviously as we’re looking at the US economy and what’s taking place, we are very focused on managing all line items of our P&L and balance sheet and expenses so clearly we’re looking at taking some initiatives to manage our cost and to bring some of our costs down so that we’re not looking at that type of percent increase for the rest of the year. Again just managing our overall business to make sure that we remain strong in all aspects including the EPS. Jody Kane – Sidoti & Company: The reason for the share buyback is that just to offset options or is that because you feel the stock is undervalued?

We don’t really talk about the value of the stock, but we believe it’s a very good place to use our cash right now and as you know we have a lot of cash on our balance sheet. The first program we did put in to offset dilution as well and we did complete that program and added an additional program during the first quarter and are well on our way on that program as well.

Your next question comes from the line of David Taylor – David P. Taylor & Company David Taylor – David P. Taylor & Company: The problem you’re having in terms of getting delivery of luxury components for Ebel and Concord is there anything you can do about that?

We’re not having problems in getting deliveries, it’s just that as the mechanical watch market has increased, and capacity has not increased as much so lead times are longer. So there are shifts in deliveries and it affects Concord to a greater extent then Ebel. But it also is a very—when you have something as strong as what we’re doing in Concord it’s very positive to have more demand then we’re able to supply right now. David Taylor – David P. Taylor & Company: Is there anything you can do to speed up the delivery though?

I think we’re very focused on managing ahead and projecting out for a longer term so that we’re able to make sure that in the future we do have the right capacity but there’s nothing that you can do to speed up the deliveries for the short-term. David Taylor – David P. Taylor & Company: So with planning you might be able to alleviate the problem though.

I don’t—that depends if the demand can exceed the plan and that’s actually what’s occurring to us today in Concord. David Taylor – David P. Taylor & Company: Data processing, I had thought that this data processing project was going to be fully online this summer, has that time shifted?

From a standpoint we had a very, very aggressive timetable in trying to go in before the summer, that’s too aggressive, we don’t think its as prudent and when we’re done, delaying it a couple of months is not a practical solution here because we don’t want to implement anything new in our most important season which is the holiday season. So basically you implement it in the June timeframe which is one month, or one year from when we originally launched it—the next window is really February 1 and we’re just very comfortable that we should be doing this on a global basis across all of our countries all at the same time and therefore its more prudent to be doing that in the February 1 timeframe. David Taylor – David P. Taylor & Company: I’d like to follow-up on a question that another analyst asked about the program to close the 35% of Movado doors, you said you were well along. If I were to just draw a line and say half, would it be more or less then half of those doors?

We’re well, well on our way—we basically agreed with all of our partners on which doors will be closed and they’re in the process of implementing that and many of these are multiple store operators with numerous stores and within their framework of planning they have to be able to plan getting the watches out of those stores and all of those things. So we would expect that by the end of the second quarter we would be very far along in terms of that. And by the end of the year, we will have completed that process.

Also it is important to note that, and I think I’ve said this before, that we have not been shipping to those doors at all this year and even near the end of last year. From a sell-in standpoint and from ourselves those doors are—we’re not getting any activity from that at all. David Taylor – David P. Taylor & Company: But the inventory will be out of those doors, should be out of those doors virtually most of it by the end of the second quarter and by the end of the year for sure.

Your final question is a follow-up from the line of Jody Kane – Sidoti & Company Jody Kane – Sidoti & Company: I just want to make sure I understand, you said that the significant demand for mechanical movements is that right?

Yes. Within the luxury category there has been over the last number of years, increased demand in the men’s market for mechanical movements as an effect on Ebel and Concord. We’re also developing a stronger presence in Movado in that category. And then even within the fashion watch category, there is a growth in automatic movements. Obviously those movements come from Asia versus Switzerland but so there’s a trend moving in that category as well in terms of mechanical movements. Jody Kane – Sidoti & Company: So there’s greater demand for mechanical movements because of the shift from quartz to mechanical and most of the mechanical comes out of Asia versus--?

No, most of the mechanical comes out of Switzerland for the high end brand and for the fashion watch brands like Tommy Hilfiger come out of Asia. Jody Kane – Sidoti & Company: The demand is outstripping the supply?

I think that they’re getting into balance, but at the current time and before you began to see an economic slowdown in the US, I think that that would be correct but I think its getting more balanced.

That concludes our question and answer session today. I’ll now turn the call over to management for any closing comments they may have.

I would like to thank all of you for participating today. We remain very, very focused on ensuring that our brands remain strong in the marketplace and we also continue to manage our spending appropriately in the current business environment. Thank you again for participating today.