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FinancialsMar 30, 2018
Movado Group’s Q4 Sales Up 14%
Full-year net sales increased 3 percent as owned and licenses brands continued to do well internationally.
CEO Efraim Grinberg said the Movado brand performed well in retail channels in Q4, in particular its Museum Dial Bauhaus collection and the Movado Connect smartwatch, pictured here.
Paramus, N.J.--Movado Group said net sales were up in both its fourth quarter and full year as its owned and licensed brands continued to perform well in markets outside the United States.
According to the watch manufacturer, net sales in the fourth quarter ended Jan. 31 were up 14 percent to $149.2 million.
Gross profit for the three-month period was $78.7 million, or 53 percent of sales, compared with $64.7 million, or 50 percent of sales, in the same period last year.
Operating income was up 79 percent to $13.3 million but the company recorded a net loss of $33.9 million, compared with net income of $5.2 million last year, as the company suffered a $45 million charge in the fourth quarter relating to the 2017 Tax Act that was enacted at the end of the year.
Movado also noted that comparable sales for its Movado company stores were up 6 percent for the quarter and that, during the period, performance was driven by the strength of its owned and licensed brands as well accelerated growth of its subsidiaries in the U.K., France and Germany.
The company also reported a very strong performance from the Olivia Burton brand, acquired last summer, with CEO Efraim Grinberg saying in a conference call Thursday morning that the company sees “a great opportunity for continued innovation and growth on a global basis.”
For its biggest brand, Movado, Grinberg said sales dropped by mid-single digits in the fourth quarter as certain wholesale channels in the United States remain “challenging.”
Strong performers from the brand during the holiday season were the Museum Dial Bauhaus collection—introduced to honor the 75th anniversary of the museum dial—men’s bracelet watches and the Movado Connect smartwatch.
The CEO also said that Movado.com’s sales were up 53 percent in the fourth quarter.
For the full year, Movado Group’s net sales were up 3 percent, increasing from $552.8 million to $568 million.
Gross profit was $298.1 million, or 53 percent of sales, compared with gross profit of $294.8 million, again 53 percent of sales, in the prior year.
Net loss was $15.2 million for fiscal 2018, compared with net income of $35.1 million last year, though the company offered no explanation Thursday behind this, while operating income was $43.2 million, compared with $54 million last year.
The company did not exhibit at Baselworld this year, opting instead to invest in a “more personal
venue” to communicate and showcase products to wholesale customers, Grinberg said. The company held its first Movado Group Summit in Davos, Switzerland, around the same time as Baselworld.
Movado is using the money it would have spent on the show for consumer-facing initiatives as well, which so far has included the establishment of a Digital Center of Excellence and the appointment of a chief digital officer and a vice president of social media.
Driving growth in digital will be a focus this year, Grinberg said. He also noted during the company’s earnings conference call that it expects to see sales grow in North America this year.
Movado said it anticipates overall net sales for fiscal 2019 to be in the range of $605 million to $615 million and for operating income to be about $68 million to $71 million.
In addition to launching its Movado Museum Classic, which Grinberg said received a “strong” response from the retailers who were in Davos, the company will evolve its new Movado advertising campaign for print, outdoor and digital during the coming fiscal year.
Movado is using the money it would have spent on the show for consumer-facing initiatives as well, which so far has included the establishment of a Digital Center of Excellence and the appointment of a chief digital officer and a vice president of social media.
Driving growth in digital will be a focus this year, Grinberg said. He also noted during the company’s earnings conference call that it expects to see sales grow in North America this year.
Movado said it anticipates overall net sales for fiscal 2019 to be in the range of $605 million to $615 million and for operating income to be about $68 million to $71 million.
In addition to launching its Movado Museum Classic, which Grinberg said received a “strong” response from the retailers who were in Davos, the company will evolve its new Movado advertising campaign for print, outdoor and digital during the coming fiscal year.
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