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Movado Group, Inc. Reports Strong Second Quarter Results
     - Company Posts 28% Sales Gain Over LY, Including Ebel Acquisition -

PARAMUS, N.J., Sept. 8 /PRNewswire-FirstCall/ -- Movado Group, Inc. (NYSE: MOV), today announced second quarter results for the period ended July 31, 2004. These results include the Ebel business, which was acquired on March 1, 2004. All share data has been adjusted to reflect a two-for-one stock split distributed to shareholders on June 25, 2004.

    Second Quarter Fiscal 2005
     * Net sales increased 27.8% to $97.8 million from $76.5 million last
       year.  The acquisition of Ebel accounted for net sales of $9.4 million.
     * Comparable store sales increased 11.8% at the Company's Movado
       boutiques.
     * Gross margin was 59.3% this year compared to 61.7% last year.  The
       acquisition of Ebel had a negative effect on gross margins in the
       second quarter of fiscal 2005 of approximately 0.7%.
     * Operating profit was $8.7 million versus $8.8 million in the year-ago
       period.  The acquisition of Ebel resulted in a $1.7 million decrease in
       operating profit in the second quarter of fiscal 2005.
     * Net income was $7.1 million, or $0.28 per diluted share, compared to
       net income of $5.8 million, or $0.23 per diluted share, in the prior
       year period.  Second quarter net income includes the dilutive impact of
       Ebel, which was partially offset by the previously announced gain of
       $835,000, or $0.03 per diluted share, associated with a legal
       settlement the Company reached with Swiss Army Brands.  The combined
       effect of these two items reduced net income in the second quarter of
       fiscal 2005 by approximately $500,000, or $0.02 per diluted share.

    First Half Fiscal 2005
     * Net sales increased 25.8% to $172.0 million from $136.7 million last
       year.  The acquisition of Ebel accounted for net sales of
       $12.8 million.
     * Comparable store sales increased 18.4% at the Company's Movado
       boutiques.
     * Gross margin was 58.9% compared to 61.2%.  The acquisition of Ebel had
       a negative effect on gross margins in the first half of fiscal 2005 of
       approximately 0.8%.
     * Operating profit was $10.5 million versus $10.8 million in the year-ago
       period.  The acquisition of Ebel resulted in a $4.1 million decrease in
       operating profit in the first half of fiscal 2005.
     * Net income was $7.8 million, or $0.31 per diluted share, compared to
       net income of $6.6 million, or $0.27 per diluted share, in the prior
       year period.  Net income for the first half of fiscal 2005 includes the
       dilutive impact of Ebel, which was partially offset by the
       aforementioned gain associated with a legal settlement the Company
       reached with Swiss Army Brands during the second quarter of fiscal
       2005.  The combined effect of these two items reduced net income in the
       first half of fiscal 2005 by approximately $2.3 million, or $0.09
       per diluted share.

Efraim Grinberg, President and Chief Executive Officer, commented, "Our solid results during the second quarter reflect strength across our brands, geographic regions, and channels of business. Movado boutiques continue to gain traction, with double-digit comparable store sales increases posted in the second quarter. Our overall success continues to be driven by the execution of our strategy to support our brands with innovative advertising campaigns, to deliver unique and compelling product assortments, and to maintain an intense focus on our customers."

Mr. Grinberg continued, "The integration and revitalization of the Ebel brand continues and we are encouraged by our progress thus far. We are looking forward to the important second half of the year when our customers will begin to see the impact of our efforts to-date. On the advertising front, we have launched a powerful image-building global campaign featuring internationally recognized supermodel, Claudia Schiffer. This campaign, along with a new Ebel men's campaign, has a prominent presence in the key fall fashion publications. We also expect Ebel to benefit from exciting new products and refined marketing programs we have planned for the second half of the year, which represent a return to the successful roots of the brand and truly convey the luxury image and rich heritage of Ebel."

Rick Cote, Executive Vice President and Chief Operating Officer, stated, "Our business is strong, and we are poised for growth across all areas of our organization. We continue to be focused on the fundamentals of our business and our investments are bearing fruit. Throughout the first half of this year, top line initiatives including product development efforts, marketing and advertising, drove consumer interest and translated into strong sales gains. These efforts were supported and enhanced by our efficient operating structure, allowing us to generate strong bottom line results, despite the planned dilutive impact of the Ebel acquisition. Additionally, our strong balance sheet and focus on cash flow management ensure we have the ability to continue to appropriately invest across all of our businesses and capitalize on growth initiatives."

The Company anticipates diluted earnings per share for the full year to range between $0.95 and $1.00, including the dilutive impact of Ebel and the legal settlement gain. The Company plans fiscal year 2005 sales to be approximately $410 million, an increase in excess of 20% from last year, including sales from Ebel which are now projected to range between $40 million and $45 million.

The Company's management will host a conference call today, September 8th at 10:00 a.m. Eastern Time. A live broadcast of the call will be available on the Company's website: http://www.movadogroupinc.com. This call will be archived online within one hour of the completion of the conference call.

Movado Group, Inc. designs, manufactures, and distributes Movado, Ebel, Concord, ESQ, Coach and Tommy Hilfiger watches worldwide, and operates Movado boutiques and Company stores in the United States.

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," "projects," "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: the Company's ability to successfully introduce and sell new products, the Company's ability to successfully integrate the operations of Ebel without disruption to its other business activities, changes in consumer demand for the Company's products, risks relating to the retail industry, import restrictions, competition, seasonality 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.


                                MOVADO GROUP, INC.
                       Consolidated Statements of Operations
                      (in thousands, except per share data)
                                     (Unaudited)

                                     Three Months Ended      Six Months Ended
                                          July 31,               July 31,
                                      2004        2003      2004         2003

    Net sales                      $97,788     $76,545   $171,975     $136,715

    Cost of sales                   39,810      29,306     70,612       53,036

    Gross profit                    57,978      47,239    101,363       83,679

    Selling, general and
     administrative expenses        49,230      38,426     90,908       72,894

    Operating profit                 8,748       8,813     10,455       10,785

    Interest expense                   783         825      1,508        1,608

    Income before litigation
     settlement                      7,965       7,988      8,947        9,177
    Litigation settlement            1,444          --      1,444           --

    Income before taxes              9,409       7,988     10,391        9,177

    Income tax                       2,352       2,237      2,598        2,570

    Net income                      $7,057      $5,751     $7,793        6,607

    Net income per diluted share     $0.28       $0.23      $0.31        $0.27
    Shares used in per share
     computation                    25,484      25,140     25,416       24,906


                               MOVADO GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS
                       (in thousands, except per share data)
                                 (Unaudited)

                                             July 31,  January 31,   July 31,
                                              2004        2004        2003
    ASSETS


       Cash and cash equivalents             $27,438     $82,083     $47,737
       Trade receivables, net                 95,841      88,800      99,192
       Inventories                           181,784     121,678     125,325
       Other                                  30,818      26,693      22,767
           Total current assets              335,881     319,254     295,021

       Property, plant and equipment, net     48,193      42,112      39,127
       Other assets                           38,902      29,601      27,631
                                            $422,976    $390,967    $361,779

    LIABILITIES AND SHAREHOLDERS' EQUITY


       Loans payable to banks                $25,000          $0     $14,000
       Current portion of long-term debt       5,000      10,000       5,000
       Accounts payable                       30,965      23,631      21,836
       Accrued liabilities                    29,264      25,781      23,812
       Deferred and current taxes payable     16,989      18,111      14,962
           Total current liabilities         107,218      77,523      79,610

           Long-term debt                     25,000      25,000      30,000
           Deferred and non-current
            income taxes                         800       2,282       2,835
           Other liabilities                  13,322      11,449       9,568
           Shareholders' equity              276,636     274,713     239,766
                                            $422,976    $390,967    $361,779
SOURCE  Movado Group, Inc.
    -0-                             09/08/2004
    /CONTACT:  Rick Cote, Executive Vice President and Chief Operating
Officer, +1-201-267-8000, or Investor Relations: Suzanne Michalek
Director of Corporate Communications, +1-201-267-8000, both of Movado Group,
or Melissa Myron of Financial Dynamics, +1-212-850-5600 for Movado Group/
    /Web site:  http://www.movadogroupinc.com /
    (MOV)

CO:  Movado Group, Inc.
ST:  New Jersey
IN:  REA FAS
SU:  ERN CCA

MP 
-- NYW060 --
6838 09/08/2004 07:30 EDT http://www.prnewswire.com