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MajorsNov 22, 2017
Movado Group’s Q3 Sales Up 6%
They increased to $190.7 million, with a challenging U.S. market offset by strong global performances.
Though the Movado brand saw sales decline in the U.S., Movado Group said it continues to gain market share. Seen here is the Movado Connected, the brand’s new smartwatch powered by Android Wear 2.0.
Paramus, N.J.--Movado Group said net sales were up in the company’s third quarter ended Oct. 31 despite continued struggles in the U.S.
The company said sales increased 6 percent to $190.7 million during the period, compared with $179.8 million in the third quarter last year. On a constant dollar basis, net sales were up 5 percent.
Operating income was $25.2 million, compared to $31.1 million in the same period last year, while operating expenses increased $11.4 million to $78.9 million.
Gross profit was $104.1 million, or 54.6 percent of sales, compared to $98.6 million, or 54.8 percent of sales, in the third quarter of the last fiscal year.
CEO Efraim Grinberg said that despite a challenging U.S. market, international sales growth led its performance, noting particular strength in Europe, Latin America, China and the Middle East.
The Movado brand saw a low double digit sales decline in the U.S., though Grinberg noted in a conference call Tuesday morning that the brand continued to gain market share in the $300 to $3,000 price category. Sales from Movado.com doubled during the quarter after an increase in digital marketing and new product introductions.
For the quarter, licensed brands grew 9 percent, with strong growth for Tommy Hilfiger, Hugo Boss and Lacoste, driven in international markets. The U.S. faces challenged in the fashion watch category, the company said.
The acquisition of the Olivia Burton brand was completed in July. The company has launched a U.S.-based website for the brand, which it said is already seeing very strong results. It now will convert the U.K. site into the salesforce platform on which the U.S. site is hosted and will launch a global website for the brand.
Meanwhile, the company also noted strong results in its outlet division, which saw comps increase 11 percent during the quarter.
Movado Group continues to make investments in the digital space, which it said has helped elevate its brands with retailers and consumers.
This factor, along with the changing retail landscape and the growing importance of online channels, has led Movado to decide to pull out of Baselworld for next year.
RELATED CONTENT: Baselworld Cuts Number of Exhibitors by HalfThe company plans to reinvest the approximate $10 million trade show costs it will save in other marketing activities, including digital brand-building and sales growth initiatives.
Movado Group is updating its outlook for fiscal 2018
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upward; it now expects net sales to be in a range of $550 million to $555 million, up from an anticipated $530 to $545 million announced in the second quarter fiscal results, and operating income to be approximately $58 million to $60 million, up from a prediction of $53 to $58 million.
The company anticipates net income in fiscal 2018 to be between approximately $39.7 million and $41 million.
The company anticipates net income in fiscal 2018 to be between approximately $39.7 million and $41 million.
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