Movado Group, Inc. Announces Second Quarter and First Half Results
PARAMUS, N.J., Sep 4, 2003 /PRNewswire-FirstCall via COMTEX/ -- Movado Group, Inc. (NYSE: MOV), today announced second quarter fiscal 2004 results for the period ended July 31, 2003.
Second Quarter Fiscal 2004 * Net sales increased 6.0% to $76.5 million compared to net sales of $72.2 million last year. On a constant dollar basis, sales increased 4.4%. * Comparable store sales increased 26.5% at the Company's Movado boutiques. * Gross margin increased to 61.7% from 61.4% in the year-ago period. * Operating profit increased 3.1% to $8.8 million versus $8.5 million last year. * Net income increased 7.1% to $5.8 million compared to $5.4 million last year. * Earnings per diluted share increased 4.5% to $0.46 from $0.44 last year, with a 2.6% increase in diluted shares outstanding. Six-Month Results * Net sales increased 5.6% to a record $136.7 million versus $129.5 million last year. On a constant dollar basis, sales increased 3.6%. * Comparable store sales increased 25.7% at the Company's Movado boutiques. * Gross margin remained strong at 61.2%. * Operating profit increased 8.5% to $10.8 million. * Net income increased 15.8% to $6.6 million, or $0.53 per fully diluted share, compared to net income of $5.7 million, or $0.47 per fully diluted share, in the comparable period last year.
Efraim Grinberg, President and Chief Executive Officer, stated, "We are pleased with our performance in the second quarter, as top and bottom line results slightly exceeded our expectations. During the quarter, we continued to deliver excitement to the marketplace with innovative new products and compelling advertising campaigns. Sales were primarily driven by the domestic growth of our Movado brand, international expansion of the Tommy Hilfiger watch business and strong sales of our Coach watch brand. We also continue to build upon the Movado image as we evolve into a lifestyle brand through our boutique retail strategy."
Rick Cote, Executive Vice President and Chief Operating Officer, commented, "As we highlighted earlier this year, our operating structure is efficient and our balance sheet is strong, allowing us to focus on driving top-line growth through appropriate investments in our brands, inventory and infrastructure. Both our retail customers and core brands -- Movado, Concord, ESQ and Coach -- will benefit from strong advertising along with increased selling support and training. We are also appropriately investing in our accelerated growth initiatives, as we expand our Tommy Hilfiger business geographically and increase the number of Movado boutiques."
Mr. Grinberg concluded, "As we enter the second half of this year, we believe our company is poised for growth. We continue to invest in our most important assets -- our brands -- with innovative products such as the new Movado automatic museum watch being introduced this fall, enhanced marketing programs and powerful advertising campaigns including national television advertising this holiday season. Initiatives such as these will enable us to continue to introduce excitement and newness to the marketplace."
The Company continues to estimate diluted earnings per share for the full year to range between $1.75 and $1.78.
The Company's management will host a conference call today, September 4, 2003 at 10:00 a.m. Eastern Time. A live broadcast of the call will be available on the Company's website: 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, 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 with respect to the future performance of Movado Group that involve risks and uncertainties. Movado's actual results could differ materially from those expressed or indicated by forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the Company's ability to successfully introduce and sell new products, changes in consumer demand for the Company's products, risks relating to the retail industry, import restrictions, competition, seasonality and other factors discussed in Movado's filings with the Securities and Exchange Commission.
MOVADO GROUP, INC. Consolidated Statements of Operations (in thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended July 31, July 31, 2003 2002 2003 2002 Net sales $76,545 $72,244 $136,715 $129,515 Cost of sales 29,306 27,871 53,036 49,963 Gross profit 47,239 44,373 83,679 79,552 Selling, general and administrative expenses 38,426 35,825 72,894 69,616 Operating profit 8,813 8,548 10,785 9,936 Interest expense 825 1,087 1,608 2,014 Income before taxes 7,988 7,461 9,177 7,922 Income tax 2,237 2,089 2,570 2,218 Net income $5,751 $5,372 $6,607 $5,704 Net income per share $0.46 $0.44 $0.53 $0.47 Shares used in per share computation 12,570 12,248 12,453 12,194 MOVADO GROUP, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (Unaudited) July 31, January 31, July 31, 2003 2003 2002 ASSETS Cash and cash equivalents $47,737 $38,365 $29,355 Trade receivables, net 99,192 94,438 102,120 Inventories 125,325 111,736 119,858 Other 24,114 36,646 32,970 Total current assets 296,368 281,185 284,303 Property, plant and equipment, net 39,127 39,939 38,250 Other assets 26,284 24,030 26,171 $361,779 $345,154 $348,724 LIABILITIES AND SHAREHOLDERS' EQUITY Loans payable to banks $14,000 $0 $32,000 Current portion of long-term debt 5,000 0 5,000 Accounts payable 21,836 22,712 22,037 Accrued liabilities 23,812 22,735 24,639 Deferred and current taxes payable 14,962 16,318 12,851 Total current liabilities 79,610 61,765 96,527 Long-term debt 30,000 35,000 35,000 Deferred and non-current income taxes 2,835 4,229 1,708 Other liabilities 9,568 7,948 7,844 Shareholders' equity 239,766 236,212 207,645 $361,779 $345,154 $348,724
SOURCE Movado Group, Inc.
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 Investor Relations: Melissa Myron, or Press: Stephanie Sampiere, +1-212-850-5600, both of Financial Dynamics for Movado Group, Inc.