~ Provides Third Quarter Preliminary Sales, Operating Profit and EPS ~
~ Revises Fiscal Year 2015 Outlook ~
~ Company to Hold Conference Call Today at 8:30 am ET ~
PARAMUS, N.J.--(BUSINESS WIRE)--Nov. 14, 2014--
Movado Group, Inc. (NYSE:MOV) today announced preliminary third quarter
sales, operating profit and earnings per share, and provided an updated
outlook for its fiscal year ending January 31, 2015. The Company expects
to report full results for its third quarter of fiscal 2015 on November
25, 2014.
Efraim Grinberg, Chairman and Chief Executive Officer, stated, “I am
disappointed in our third quarter performance and our expectations for
this trend to continue into the fourth quarter, which combined has
caused us to reduce guidance for the full year. For fiscal 2015, our net
sales are now expected to increase by approximately 1% to 2% and
operating profit is expected to be down approximately 7% to 10% as
compared to last fiscal year. Our brand portfolio remains strong as does
our balance sheet. We have strong plans in place for the upcoming
holiday season that should continue to drive increased sell-through at
retail. As we begin planning for next year, we are confident that we
will return to sustainable profitable growth.”
Efraim Grinberg continued: “Our sell-through throughout the year for
Movado has been strong domestically and our sell-through for our
licensed brand portfolio has trended positively. We are outpacing the
growth in the overall watch category and we continue to increase our
share of market in our key global markets for our largest business.
Despite this strong performance at retail, there were factors that have
impacted our guidance for the year. The overall watch category is
experiencing slower growth and retailers are focusing on driving
improved productivity. Moreover, certain of our brands did not perform
as well as planned, including Movado in international markets.”
Preliminary Third Quarter Fiscal 2015 Results
On a preliminary basis, for the third quarter ended October 31, 2014 the
Company currently expects:
-
Net sales of $188.6 million compared to $189.7 million in the third
quarter of fiscal 2014.
-
Operating profit in the range of $33.0 million to $33.3 million
compared to $34.1 million in the third quarter of fiscal 2014.
-
Earnings per diluted share in the range of $0.86 to $0.87 compared to
$0.89 in the third quarter of fiscal 2014.
Fourth Quarter and Fiscal 2015 Outlook
For fiscal 2015, the Company now anticipates that net sales will
increase approximately 1% to 2% to a range of $585 million to $590
million, operating profit will be approximately $68 million to $70
million and earnings per diluted share will be in the range of $1.80 to
$1.85, assuming a 31% effective tax rate, excluding any unusual items.
For the fourth quarter, the Company anticipates net sales of $132
million to $137 million, operating profit of $6.5 million to $8.5
million and earnings per diluted share in the range of $0.18 to $0.23.
The operating profit is impacted due to continued investment in brand
building and growth initiatives despite lower sales growth.
The Company also anticipates recording a $3.0 million one-time pre-tax
charge related to operating savings initiatives in either the fourth
quarter of fiscal 2015 or early in fiscal 2016.
Rick Coté, Vice Chairman and Chief Operating Officer, stated, “We are
disappointed to announce that we will not achieve our full year fiscal
2015 financial targets. There are several reasons for this. First, the
retailer inventory build portion of our Movado / ESQ reallocation
strategy did not fully materialize. Second, certain of our licensed
brands substantially underperformed as compared to our expectations.
Specifically, we anticipate our Lacoste brand business will be down
versus last year as we continue working with Lacoste as they refine
their global brand positioning. Our Scuderia Ferrari brand did not meet
our expectations despite increasing sales 17% for the nine months.
Third, we saw weaker than planned performance by Movado in international
markets. Lastly, the overall watch category experienced weaker growth
than expected in both the United States and European markets. Our
profitability is also being negatively impacted by costs related to our
brand building and growth initiatives which were only slightly
curtailed.”
Rick Coté continued: “We nevertheless remain pleased that we continue to
gain share in our key global markets in both our largest brand, Movado,
and also several of our largest licensed brands as evidenced by our
retail sell-through. We will continue to invest in our infrastructure
and growth initiatives, such as the addition of Ricardo Quintero as
President of Movado Group, and we remain focused on our long-term
business strategies and our ability to deliver sustainable profitable
growth.”
Cautionary Statement Regarding Preliminary
Financial Information
The preliminary financial information set forth in this press release
has been prepared by, and is the responsibility of, the Company’s
management. The information and estimates have not been compiled or
examined by the Company’s independent auditors nor have the Company’s
independent auditors performed any procedures with respect to this
information or expressed any opinion or any form of assurance on such
information. In addition, the preliminary financial information is
subject to revision as the Company prepares its financial statements and
other disclosures as of and for the three months ended October 31, 2014,
including all disclosures required by GAAP. Because the Company has not
completed its normal quarterly closing and review procedures for the
three months ended October 31, 2014, and subsequent events may occur
that require material adjustments to the preliminary financial
information, the final results and other disclosures for the three
months ended October 31, 2014 may differ materially from the preliminary
financial information. The preliminary financial information should not
be viewed as a substitute for full financial statements prepared in
accordance with GAAP or as a measure of performance.
Conference Call
The Company’s management will host a conference call in conjunction with
the update release, today, November 14th, at 8:30 a.m.
Eastern Time. The conference call may be accessed by dialing (888)
587-0615. Additionally, a live webcast of the call can be accessed at www.movadogroup.com.
The webcast will be archived on the Company’s website approximately one
hour after the conclusion of the call. Additionally, a telephonic
re-play of the call will be available at 12:00 p.m. ET on November 14,
2014 until 11:59 p.m. ET on November 21, 2014 and can be accessed by
dialing (877) 870-5176 and entering replay pin number 8036579.
Movado Group, Inc. designs, sources, and distributes MOVADO®, EBEL®,
CONCORD®, ESQ® Movado, COACH®, TOMMY HILFIGER®, HUGO BOSS®, JUICY
COUTURE®, LACOSTE® and SCUDERIA FERRARI® watches worldwide, and operates
Movado 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,” “may,” “will,” “should” and variations of such words 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 general economic and business conditions which may impact
disposable income of consumers in the United States and the other
significant markets (including Europe) where the Company’s products are
sold, uncertainty regarding such economic and business conditions,
trends in consumer debt levels and bad debt write-offs, general
uncertainty related to possible terrorist attacks, natural disasters,
the stability of the European Union and defaults on or downgrades of
sovereign debt and the impact of any of those events on consumer
spending, changes in consumer preferences and popularity of particular
designs, new product development and introduction, competitive products
and pricing, seasonality, availability of alternative sources of supply
in the case of the loss of any significant supplier or any supplier’s
inability to fulfill the Company’s orders, the loss of or curtailed
sales to significant customers, the Company’s dependence on key
employees and officers, the ability to successfully integrate the
operations of acquired businesses without disruption to other business
activities, the continuation of licensing arrangements with third
parties, the ability to secure and protect trademarks, patents and other
intellectual property rights, the ability to lease new stores on
suitable terms in desired markets and to complete construction on a
timely basis, potential effects of economic and currency instability in
Europe and countries using the Euro as their functional currency, the
ability of the Company to successfully manage its expenses on a
continuing basis, the continued availability to the Company of financing
and credit on favorable terms, business disruptions, disease, general
risks associated with doing business outside the United States
including, without limitation, import duties, tariffs, quotas, political
and economic stability, and success of hedging strategies with respect
to currency exchange rate fluctuations, 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. The Company assumes no duty to update its forward
looking statements and this release shall not be construed to indicate
the assumption by the Company of any duty to update its guidance in the
future.
Source: Movado Group, Inc.
ICR, Inc.
Rachel Schacter/Allison Malkin, 203-682-8200