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|Movado Group, Inc. Announces First Quarter Results|
PARAMUS, N.J., May 29 /PRNewswire-FirstCall/ -- Movado Group, Inc.
(NYSE: MOV), today announced first quarter results for the period ended April
First Quarter Fiscal 2009
- Net sales in the first quarter of fiscal 2009 were $101.4 million.
Fiscal 2008 first quarter net sales of $101.4 million included
$2.7 million of sales of excess discontinued product. Excluding the
sales of discontinued product, net sales increased 2.7% from last year.
- On a constant-exchange-rate basis, which excludes the effect of
translating foreign-currency-denominated sales into U.S. dollars, and
excluding the previously mentioned discontinued product sales recorded
in fiscal 2008, net sales decreased 2.6%.
- Gross profit was $65.0 million, or 64.2% of sales, compared to
$61.7 million, or 60.8% of sales last year. Excluding excess
discontinued product sales, adjusted gross profit in the first quarter
of fiscal 2008 was $62.0 million, or 62.9% of sales.
- Operating expenses were $63.4 million versus $58.9 million last year.
On a constant-exchange-rate basis, operating expenses were
- Operating profit was $1.6 million this year compared to $2.8 million in
the year-ago period.
- Income tax expense of $0.6 million reflects a 30.4% tax rate in the
first quarter compared to income tax expense of $0.6 million, or a
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 was $1.2 million, or $0.05 per fully diluted share, versus
$2.4 million, or $0.09 per fully diluted share last year.
Efraim Grinberg, President and Chief Executive Officer, stated, "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. New product introductions remain an important driver to our
business, particularly in the current U.S. consumer spending environment, and
we continue to support each of our brands with compelling advertising
Mr. Grinberg continued, "We 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. To date, we've made significant
headway in the targeted reduction of wholesale doors. 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
Rick Cote, Executive Vice President and Chief Operating Officer, stated,
"Our balance sheet remains strong and we are well positioned to support our
brands and businesses around the world. 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."
Share Repurchase Program
During the first quarter of fiscal 2009, the Company initiated a share
repurchase program to buyback up to one million shares of the Company's common
stock. As of April 30, 2008, the Company had repurchased 238,115 shares of
its common stock at an average cost of $20.26 per share. As of May 27, 2008,
the Company had repurchased 489,331 shares of its common stock at an average
cost of $20.92 per share.
Fiscal 2009 Guidance
Movado Group continues to project fiscal 2009 net sales to range between
$555 million to $565 million. The Company maintains its diluted earnings per
share guidance of approximately $1.65 to $1.72, based on a projected tax rate
of 24%. The Company's guidance continues to reflect a cautious outlook on the
U.S. 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 expected wholesale door closings, certain expenses
related to the Company's ERP implementation, and severance costs to be paid as
part of the Company's previously announced Movado brand strategy. In fiscal
2008, the Company reported adjusted diluted earnings per share of $1.71, which
excluded a net realized tax benefit and an accrual for product returns
recorded in the fourth quarter.
The Company's management will host a conference call today, May 29th at
10:00 a.m. Eastern Time. A live broadcast of the call will be available on
the Company's website: www.movadogroup.com. This call will be archived
online within one hour of the completion of the conference call.
Movado Group, Inc. designs, sources, and distributes Movado, Ebel,
Concord, ESQ, Coach, Tommy Hilfiger, HUGO BOSS, Juicy Couture and Lacoste
watches worldwide, and operates Movado boutiques and company stores in the
In this release, the Company presents certain adjusted financial measures
that are not calculated according to generally accepted accounting principles
in the United States ("GAAP"). These non-GAAP financial measures are designed
to complement the GAAP financial information presented in this release and
management believes they present information regarding the Company that is
useful to investors. The non-GAAP financial measures presented should not be
considered in isolation from or as a substitute for the comparable GAAP
The Company is presenting net sales and gross margin excluding sales of
excess discontinued product because the Company believes that it is useful to
investors to eliminate the effect of these unusual items in order to improve
the comparability of the Company's results for the periods presented.
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. The Company
has tried, whenever possible, to identify these forward-looking statements
using words such as "expects," "anticipates," "believes," "targets," "goals,"
"projects," "intends," "plans," "seeks," "estimates," "may," "will," "should"
and similar expressions. Similarly, statements in this press release that
describe the Company's business strategy, outlook, objectives, plans,
intentions or goals are also forward-looking statements. Accordingly, such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause the Company's actual results, performance or
achievements and levels of future dividends to differ materially from those
expressed in, or implied by, these statements. These risks and uncertainties
may include, but are not limited to: actual or perceived weakness in the U.S.
and global economy and fluctuations in consumer spending and disposable
income, the Company's ability to successfully implement the new Movado brand
strategy, the ability of the new Movado brand strategy to improve the
Company's net sales, profitability and other results of operations, the
Company's ability to successfully introduce and sell new products, the
Company's ability to successfully integrate the operations of newly acquired
and/or licensed brands without disruption to its other business activities,
changes in consumer demand for the Company's products, risks relating to the
fashion and retail industry, import restrictions, competition, seasonality,
commodity price and exchange rate fluctuations, changes in local or global
economic conditions, and the other factors discussed in the Company's Annual
Report on Form 10-K and other filings with the Securities and Exchange
Commission. These statements reflect the Company's current beliefs and are
based upon information currently available to it. Be advised that developments
subsequent to this press release are likely to cause these statements to
become outdated with the passage of time.
(Tables to follow)
MOVADO GROUP, INC.
Consolidated Statements of Income
(in thousands, except per share data)
Three Months Ended
Net sales $101,353 $101,363
Cost of sales 36,333 39,711
Gross profit 65,020 61,652
Selling, general and administrative expenses 63,407 58,880
Operating profit 1,613 2,772
Interest expense (706) (879)
Interest income 957 1,247
Income before income taxes and minority interests 1,864 3,140
Provision for income taxes 567 647
Minority interests 48 93
Net income $1,249 $2,400
Net income per diluted share $0.05 $0.09
Number of shares outstanding 26,565 27,175
MOVADO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
April 30, January 31, April 30,
2008 2008 2007
Cash and cash equivalents $127,475 $169,551 $101,769
Trade receivables, net 89,510 94,328 105,753
Inventories, net 231,402 205,129 212,106
Other current assets 51,417 50,317 39,510
Total current assets 499,804 519,325 459,138
Property, plant and equipment, net 71,115 68,513 58,297
Deferred income taxes 19,908 20,024 26,152
Other non-current assets 38,825 38,354 37,445
Total assets $629,652 $646,216 $581,032
LIABILITIES AND EQUITY
Current portion of long-term debt $10,000 $10,000 $5,000
Accounts payable 27,651 38,397 26,304
Accrued liabilities 44,698 42,770 39,946
Deferred and current taxes payable 7 8,526 2,039
Total current liabilities 82,356 99,693 73,289
Long-term debt 61,435 50,895 71,454
Deferred and non-current income taxes 7,078 6,363 33,086
Other liabilities 25,121 24,205 24,130
Minority interests 1,913 1,865 536
Shareholders' equity 451,749 463,195 378,537
Total liabilities and equity $629,652 $646,216 $581,032
SOURCE Movado Group, Inc.
/CONTACT: Suzanne Rosenberg, Vice President, Corporate Communications,
Movado Group, Inc., +1-201-267-8000; or Leigh Parrish, or Stephanie Rich,
of Financial Dynamics, +1-212-850-5600, for Movado Group, Inc./
/Web site: http://www.movadogroup.com /