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Movado Group, Inc. Reports Strong Third Quarter Results

- Company Delivers Double Digit Sales & Profit Growth in Q3 and YTD Period -

PARAMUS, N.J., Dec. 8 /PRNewswire-FirstCall/ -- Movado Group, Inc. (NYSE: MOV), today announced third quarter results for the period ended October 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.

    Third Quarter Fiscal 2005
     * Net sales increased 26.1% to $127.0 million from $100.8 million last
       year.  The acquisition of Ebel accounted for net sales of
       $15.7 million.

     * Comparable store sales increased 12.8% at the Company's Movado

     * Gross margin remained strong at 60.7% this year compared to 60.9%
       last year.

     * Operating profit was $16.0 million versus $14.8 million in the year-ago

     * Net income increased 12.5% to $11.3 million, or $0.44 per diluted
       share, compared to net income of $10.1 million, or $0.40 per diluted
       share, in the prior year period.  Third quarter net income includes the
       slightly dilutive impact of Ebel of $0.1 million, or less than $0.01
       per diluted share.

    Nine-Month Results
     * Net sales increased 25.9% to $299.0 million from $237.5 million last
       year.  The acquisition of Ebel accounted for net sales of
       $28.6 million.

     * Comparable store sales increased 16.7% at the Company's Movado

     * Gross margin was 59.7% compared to 61.1%.

     * Operating profit was $26.4 million versus $25.5 million in the year-ago

     * Net income rose 14.7% to $19.1 million, or $0.75 per diluted share,
       compared to net income of $16.7 million, or $0.67 per diluted share, in
       the prior year period. Net income for the nine-month period includes
       the dilutive impact of Ebel, which was partially offset by a legal
       settlement gain recorded in the second quarter of fiscal 2005.  The
       combined effect of these two items reduced net income in the nine-month
       period by approximately, $2.4 million, or $0.09 per diluted share.

Efraim Grinberg, President and Chief Executive Officer, commented, "Our company delivered a strong performance in the third quarter with year-over-year sales increases recorded in each of our brands and businesses. The results were driven by the steadfast execution of our strategy to develop and support our distinctive portfolio of brands through strong product development, compelling advertising campaigns, and consistent marketing support. We are also very pleased with the performance of our Movado boutiques, demonstrating consumers continued appreciation and desire for luxury jewelry and accessories with signature Movado styling."

Rick Cote, Executive Vice President and Chief Operating Officer, stated, "In our seasonally strongest quarter, we are very pleased that Ebel delivered an attractive sales level driven by the recently launched global advertising campaign featuring Claudia Schiffer and certain new product introductions such as the Sportwave. We expect this momentum to continue as we enhance and accelerate new product introductions beginning next year. Given the restructuring actions taken to-date, we are pleased that Ebel neared the breakeven mark to the bottom line in the third quarter. The appropriate cost structure is in place and we anticipate this business will be modestly accretive to the bottom line next year, with the potential for significant operating leverage in the future."

Mr. Grinberg concluded, "We believe our company is well positioned for the important holiday season. Our market presence is strong with significant merchandising and marketing initiatives in place to support our diverse brand portfolio and drive sales. At the same time, we remain focused on our business fundamentals and operating disciplines to further enhance our bottom line results."

The Company projects diluted earnings per share for the fiscal year ending January 31, 2005 to range between $0.98 and $1.02, compared to management's previously issued financial projections for full year earnings per share to range between $0.96 and $1.00. These projections include the anticipated dilutive impact of Ebel and a legal settlement gain recorded in the second quarter of fiscal 2005.

The Company's management will host a conference call today, December 8th at 10:00 a.m. Eastern Time. A live broadcast of the call will be available on the Company's website: 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)

                                   Three Months Ended      Nine Months Ended
                                       October 31,            October 31,

                                    2004         2003      2004         2003

    Net sales                    $127,023     $100,767  $298,998     $237,482

    Cost of sales                  49,882       39,428   120,494       92,464

    Gross profit                   77,141       61,339   178,504      145,018

    Selling, general and
     administrative expenses       61,157       46,584   152,065      119,478

    Operating profit               15,984       14,755    26,439       25,540

    Interest expense                  872          764     2,380        2,372

    Income before litigation
     settlement                    15,112       13,991    24,059       23,168
    Litigation settlement               -            -     1,444            -

    Income before taxes            15,112       13,991    25,503       23,168

    Income tax                      3,778        3,917     6,376        6,487

    Net income                    $11,334      $10,074   $19,127       16,681

    Net income per diluted share    $0.44        $0.40     $0.75        $0.67
    Shares used in per share
     computation                   25,621       25,257    25,497       25,007

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

                                               October   January     October
                                                  31,       31,         31,
                                                 2004      2004        2003

       Cash and cash equivalents               $35,870   $82,083     $60,957
       Trade receivables, net                  137,861    88,800     120,706
       Inventories                             192,811   121,678     123,074
       Other                                    40,359    26,693      20,341
           Total current assets                406,901   319,254     325,078

       Property, plant and equipment, net       50,105    42,112      40,744
       Other assets                             41,641    29,601      29,052
                                              $498,647  $390,967    $394,874


       Loans payable to banks                  $16,300        $0     $22,000
       Current portion of long-term debt         5,000    10,000       5,000
       Accounts payable                         41,928    23,631      22,115
       Accrued liabilities                      47,180    25,781      31,084
       Deferred and current taxes payable       20,911    18,111      17,868
           Total current liabilities           131,319    77,523      98,067

           Long-term debt                       45,000    25,000      30,000
           Deferred and non-current income taxes 3,291     2,282       2,406
           Other liabilities                    12,826    11,449      10,518
           Shareholders' equity                306,211   274,713     253,883
                                              $498,647  $390,967    $394,874

SOURCE Movado Group, Inc. -0- 12/08/2004 /CONTACT: Rick Cote, Executive Vice President and Chief Operating Officer, or Investor Relations, Suzanne Michalek, Director of Corporate Communications, both of Movado Group, Inc., +1-201-267-8000; or Melissa Myron of Financial Dynamics, +1-212-850-5600, for Movado Group, Inc./ /Web site: / (MOV)