Movado Group, Inc. Posts 14% Increase in Third Quarter Net Income

December 2, 2003 at 7:32 AM EST
                 - Third Quarter EPS Increases 10% Over LY -

      - Company Generates Record Nine Months Cash Flow From Operations -

PARAMUS, N.J., Dec. 2 /PRNewswire-FirstCall/ -- Movado Group, Inc. (NYSE: MOV), today announced third quarter fiscal 2004 results for the period ended October 31, 2003.

    Third Quarter Fiscal 2004
     * Net sales increased 10.7% to $100.8 million compared to net sales of
       $91.0 million last year.  On a constant dollar basis, sales increased
     * Comparable store sales increased 19.2% at the Company's Movado
     * Gross margin remained strong at 60.9%.
     * Operating profit increased 11.2% to $14.8 million versus $13.3 million
       last year.
     * Net income increased 14.4% to $10.1 million compared to $8.8 million
       last year.
     * Earnings per diluted share increased 9.6% to $0.80 from $0.73 last
       year, with a 4.1% increase in diluted shares outstanding.

    Nine-Month Results
     * Net sales increased 7.7% to $237.5 million versus $220.5 million last
       year.  On a constant dollar basis, sales increased 5.9%.
     * Comparable store sales increased 23.6% at the Company's Movado
     * Gross margin remained strong at 61.1%.
     * Operating profit increased 10.1% to $25.5 million compared to
       $23.2 million.
     * Net income increased 14.9% to $16.7 million, or $1.33 per fully diluted
       share, compared to net income of $14.5 million, or $1.19 per fully
       diluted share, in the comparable period last year.

Efraim Grinberg, President and Chief Executive Officer, stated, "We are very pleased that during our seasonally strongest third quarter, we successfully executed our operating strategies resulting in solid increases in sales, profits and cash flow. Year-over-year sales increases were also posted in each of our brands -- Concord, Movado, ESQ, Coach and Tommy Hilfiger. This excellent performance was driven by the strength of our brands and our commitment to consistently bring newness to the marketplace via new product introductions that are supported by compelling advertising campaigns.

"In addition, our Movado boutiques recorded significant year-over-year sales increases in the third quarter, with boutique comparable store sales rising 19%. This strong performance resulted from the introduction of new products and an improved product assortment in our boutiques, which served to generate interest and drive merchandise sell through. We are particularly pleased with the introduction of our proprietary Movado diamond featuring 114 facets."

Rick CotE, Executive Vice President and Chief Operating Officer, commented, "Our ability to deliver a 14% increase in net income even as we appropriately invested in our brands, infrastructure, and inventory, demonstrates our efficient operating structure and strong balance sheet. We continue to be disciplined in our strategies and remain focused on working capital management as demonstrated by record cash flow from operations of $8.1 million generated in the year-to-date period."

Mr. Grinberg concluded, "Looking ahead, we are well-positioned for the holiday season. We look forward to our advertising campaigns, including our national television spots featuring our new museum automatic, successfully highlighting the excitement we have brought to the marketplace and driving consumer purchases during the important gift-giving season."

Based on the third quarter results, management has increased its financial projections and now expects full year earnings per share to range between $1.78 to $1.81.

The Company's management will host a conference call today, December 2, 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       Nine Months Ended
                                         October 31,           October 31,
                                      2003        2002      2003         2002

    Net sales                     $100,767     $91,023  $237,482     $220,538

    Cost of sales                   39,428      35,248    92,464       85,211

    Gross profit                    61,339      55,775   145,018      135,327
    Selling, general and
     administrative expenses        46,584      42,510   119,478      112,126

    Operating profit                14,755      13,265    25,540       23,201

    Interest expense                   764       1,031     2,372        3,045

    Income before taxes             13,991      12,234    23,168       20,156

    Income tax                       3,917       3,426     6,487        5,644

    Net income                     $10,074       8,808   $16,681       14,512

    Net income per share             $0.80       $0.73     $1.33        $1.19
    Shares used in per share
     computation                    12,629      12,127    12,504       12,167

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

                                          October 31, January 31, October 31,
                                              2003        2003        2002

       Cash and cash equivalents             $60,957     $38,365     $36,930
       Trade receivables, net                120,706      94,438     124,295
       Inventories                           123,074     111,736     113,215
       Other                                  21,957      36,646      24,477
           Total current assets              326,694     281,185     298,917

       Property, plant and equipment, net     40,744      39,939      39,749
       Other assets                           27,436      24,030      24,011
                                            $394,874    $345,154    $362,677


       Loans payable to banks                $22,000          $0     $31,000
       Current portion of long-term debt       5,000           0       5,000
       Accounts payable                       22,115      22,712      25,953
       Accrued liabilities                    31,084      22,735      25,473
       Deferred and current taxes payable     17,868      16,318      15,384
           Total current liabilities          98,067      61,765     102,810

       Long-term debt                         30,000      35,000      35,000
       Deferred and non-current income taxes   2,406       4,229       2,890
       Other liabilities                      10,523       7,948       7,598
       Shareholders' equity                  253,878     236,212     214,379
                                            $394,874    $345,154    $362,677
SOURCE  Movado Group, Inc.
    -0-                             12/02/2003
    /CONTACT:  Investors Relations: Suzanne Michalek, Director of Corporate
Communications of Movado Group, Inc., +1-201-267-8000; or Melissa Myron, or
Media: Stephanie Sampiere, both of Financial Dynamics, +1-212-850-5600, for
Movado Group, Inc./
    /Web site: /

CO:  Movado Group, Inc.
ST:  New Jersey

-- NYTU067 --
3098 12/02/2003 07:30 EST