Movado Group, Inc. Posts 14% Increase in Third Quarter Net Income
- 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 9.1%. * Comparable store sales increased 19.2% at the Company's Movado boutiques. * 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 boutiques. * 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: 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 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) (Unaudited) October 31, January 31, October 31, 2003 2003 2002 ASSETS 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 LIABILITIES AND SHAREHOLDERS' EQUITY 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: http://www.movadogroupinc.com / (MOV) CO: Movado Group, Inc. ST: New Jersey IN: FAS REA SU: ERN CCA AL -- NYTU067 -- 3098 12/02/2003 07:30 EST http://www.prnewswire.com