Movado Group, Inc. Announces Second Quarter and First Half Results

September 4, 2003 at 7:33 AM EDT
~ Company Posts Q2 EPS of $0.46 vs. EPS of $0.44 LY ~ ~ First Half Net Income Increases 15.8% ~

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

     *  Comparable store sales increased 26.5% at the Company's Movado

     *  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

     *  Comparable store sales increased 25.7% at the Company's Movado

     *  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: 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)

                                    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)

                                            July 31,  January 31,    July 31,
                                                2003        2003        2002

       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


       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.