Movado’s Q3 sales climb 18 percent
November 27, 2013
Paramus, N.J.--Movado Group Inc. reported Tuesday that third quarter sales increased 18 percent year-over-year, led by growth in the accessible luxury and licensed brand categories.
Sales in the third quarter, ended Oct. 31, totaled $189.7 million compared with $160.2 million in the prior-year period.
Gross profit was $101.3 million, up from $90.4 million in the same period last year, but down as a percentage of sales, decreasing from 56 percent to 53 percent. The company attributes the decline to the shift in channel and product mix, as well as unfavorable fluctuations in foreign currency exchange rates.
Operating income increased to $34.1 million compared to the $25 million reported during the third quarter last year.
Net income, however, was down, decreasing from $34.5 million in the prior-year period to $23 million, as the company recorded a tax provision of $10.6 million, compared with a tax benefit of $9.9 million last year.
“Our third quarter results represent another quarter of strong sales growth, which, combined with the leveraging of our operating expenses, resulted in 50 basis points in operating margin expansion,” said Movado President and COO Rick Coté. “As a result, we are positioned to exceed our previously issued operating income guidance and are reiterating our fiscal 2014 net income expectations despite an increased tax rate for the year.”
Year-to-date net sales also increased, up 15 percent to $438 million, led by growth in every brand category.
Gross profit was up to $236 million, but was down as a percentage of sales from 56 percent to 54 percent.
Net income for the nine-month period also declined, from $49.2 million to $43.7 million.
The company increased its operating income guidance for fiscal 2014 from $70 million to $72 million.
Headquartered in Paramus, the Movado Group’s brands include Movado, Ebel, Concord, ESQ Movado, Coach, Tommy Hilfiger, Hugo Boss, Juicy Couture, Lacoste and, now, Scuderia Ferrari watches. The company also operates Movado company stores in the United States.